2023 Solar Incentives Guide for Columbia, MD - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Columbia.
You'll learn about:
- Local & State Solar Incentives
- Federal Tax Credits (Updated for 2023 and beyond)
- Ways to optimize your solar investment
Solar installers are experts in maximizing your solar tax credits and rebates.
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Updated March 14, 2023
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What Solar Tax Credits, Incentives, and Rebates are Available in Columbia?
Residential Clean Energy Rebate Program
SWH: $500/project (flat per installation/household incentive)
New GHC: $3,000/project
GHC Replacement: $500/project
Solar Renewable Energy Certificates (SRECs)
Sales and Use Tax Exemption for Residential Solar and Wind Electricity Sales
Property Tax Exemption for Solar and Wind Energy Systems
Clean-Burning Wood Stove Grant Program
Pellet Burning Stove: $700
Local Option - Property Tax Credit for High Performance Buildings
Local Option - Property Tax Credit for Renewables and Energy Conservation Devices
Baltimore Gas & Electric Company (Electric) - Residential Energy Efficiency Rebate Program
Clothes Dryer (Electric): $50
Clothes Washer: $75 - $100
Hybrid Heat Pump Water Heater: $500
Pool Pump: $150 - $400
Refrigerator: $100
Dehumidifier: $30
Refrigerator or Freezer Recycling: $50, plus $25 bonus when recycling an old, working room A/C or dehumidifier at the same time
Room A/C or Dehumidifier Recycling (*May 20, 2017 only*): $25
Smart Thermostat: $100
Heating & Cooling
Air-Source Heat Pump: $400 - $650
Central A/C: $300 - $500
Gas Furnace: $250
Furnace Blower Motor: $50 - $100
Geothermal Heat Pump: $1,500
Lighting
Instant discounts vary by participating retailer; see program website
Baltimore Gas & Electric Company (Gas) - Residential Energy Efficiency Rebate Program
Clothes Dryer (Electric): $50
Clothes Washer: $75 - $100
Hybrid Heat Pump Water Heater: $500
Pool Pump: $150 - $400
Refrigerator: $100
Dehumidifier: $30
Refrigerator or Freezer Recycling: $50, plus $25 bonus when recycling an old, working room A/C or dehumidifier at the same time
Room A/C or Dehumidifier Recycling (*May 20, 2017 only*): $25
Smart Thermostat: $100
Heating & Cooling
Air-Source Heat Pump: $400 - $650
Central A/C: $300 - $500
Gas Furnace: $250
Furnace Blower Motor: $50 - $100
Geothermal Heat Pump: $1,500
Lighting
Instant discounts vary by participating retailer; see program website
Residential/Community Wind Grant Program
Community: $1000/kW - $4000/kW, depending on the system capacity
Howard County - High Performance and Green Building Property Tax Credit
High Performance R-2, R-3 Buildings: credit of 19% to 100% of taxes owed for 4 years; varies by building rating and declines for each year claimed (i.e., the Year 2 % is less than Year 1)
Green Buildings (w/energy conservation devices): credit of 14% - 20% of cost of device for 3 years; varies by building rating
Federal Residential Renewable Energy Tax Credit
Source: https://www.dsireusa.org/
The phrase "solar incentives" refers to a range of financial incentives designed to make installing and using solar panels more affordable. This is done to encourage people to switch to renewable energy. Incentives might include things like discounts, cash back or credit on your utility bill each month. Some incentives are offered federally, while others are provided by the state of Maryland or by your utility company, county or municipality. You might qualify for any of the following types of solar incentives:
- Tax Credits: Tax credits lower, dollar-for-dollar, the amount of income tax you owe the government. These differ from tax deductions.
- Rebates: Solar rebates can be offered by your county or state, or by your local utility company. These rebates work as partial refunds that are applied after your purchase of a solar system and before tax credits are calculated.
- Tax Exemptions: Sales tax exemptions go into effect at the point of sale for your solar panels. Property tax exemptions allow you to ignore the value that your solar panels add when calculating how much property tax you need to pay.
- Solar Renewable Energy Certificate (SREC): SRECs are credits that can be sold to your utility company (or other buyers) for cash that is generally considered part of your taxable income. Typically, you must meet a certain (small) threshold of energy production before your solar system qualifies for SRECs or similar performance-based incentives. These kinds of incentives are generally handled at the state level.
- Net Metering: Net metering becomes relevant after your solar system is up and running. If you've signed a net metering agreement with your Columbia utility company, they will subtract the value of the excess energy your solar system produces from your utility bill each month. In some areas, this is a dollar-for-dollar credit, while in other areas you might make back a percentage of the value.
Federal Solar Incentives
When people think of solar incentives, federal incentives are likely the first thing that comes to mind. The solar incentive that you're most likely to have heard of is the Federal Solar Investment Tax Credit (ITC), which provides a credit on your taxes equal to a certain percentage of your solar system's cost.
The ITC applies to solar panels installed after January 1, 2006 on a primary or secondary residence in the United States that you own. The credit initially covered 30% of the total cost — for panels, equipment, accessories and labor — although that amount may range from 26-30%, depending on the installation date of your solar system. There is no cap on the amount you can claim.
To best understand how the ITC may apply to you, reach out to your local Columbia solar panel installer and ask for more information.
In August 2022, the Inflation Reduction Act made revisions to the ITC, now referred to as the Clean Energy Credit. Homeowners can now receive a credit of 30% of the total solar system installation costs for projects that began after January 1, 2022 and will be finished by the end of 2032. The credit percentage will then begin to decrease on a yearly basis until the Clean Energy Credit expires in 2035. The expansion also makes claiming credit for energy storage systems easier than ever before, starting in 2023.
Click here to learn more about the new Inflation Reduction Act. Your local Columbia solar panel installation experts can answer your questions and explain how the new Clean Energy Credit may apply to you.
State & Local Solar Incentives
Not all solar incentives are federal; tax credits, rebates and more may be offered at the local or state level. Certain incentives are ongoing, while others are available for a limited time. Solar incentives may be given by your county or municipality, or by the Maryland government.
Next Steps for Installing Solar in Columbia
There are many kinds of solar incentives: those provided by local utility companies, those provided by the Maryland government and those provided by the federal government, to name a few. The use of solar energy has increased enormously in the last 15 years, partially due to these incentives. Speak with your local solar panel installer today to learn more and to save as much money as possible on a solar system for your Columbia home.
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- Price-match guarantee
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- Some reported issues with customer service
- Customer service varies by local dealer
EcoWatch's Columbia, MD Solar Incentives FAQs
What if I want to add solar panels to a rental property, vacation home or commercial property? Can I still qualify for incentives?
While we recommend getting in touch with your local solar installer and/or tax professional to fully understand what solar incentives apply to you, many apply to a second home, so long as that home is in the United States and owned by you. There may be additional incentives available specifically for commercial properties, depending on the specifics.
How much will solar panels save me annually on my electric bill in Columbia?
Generally, homeowners in Columbia who install solar panels save about $748.37 per year, or about $14,219.09 over 20 years after they make the switch.
What are some of the environmental benefits of switching to solar?
You can decrease your carbon footprint by 300 pounds of CO2 a year when you switch to solar panels. This adds up to approximately 6,000 pounds in 20 years. In addition, solar power is a renewable energy source, which means that making the switch reduces the drain on our planet's resources.
When does the federal solar tax credit end?
The Clean Energy Credit (previously called the federal solar tax credit, or the ITC), currently ends on January 1, 2035. Currently set at 30%, the credit will drop to 26% in 2033 and to 22% in 2034.
Can I use multiple types of renewable energy to power my home?
You can use multiple types of renewable energy, or a combination of renewable and non-renewable energy, to power your home. Make sure you go over your ideas with your local Columbia solar installation expert. They can help you as you plan for your project and give you an understanding of various incentives that you might or might not qualify for.
Our goal is to reach as many people as we can with sensible solutions like solar energy. Our team of full-time local researchers collects solar price and installation data for every city in America then compiles it to create these digestible city guides. If you want to read our solar expert's opinion on the top solar companies featured here, follow this link.
Solar incentive research was conducted by Melissa Smith and Karsten Neumeister. Local data analysis was conducted by James Savino. See something we missed or could do better? Email the editor.