2023 Solar Incentives Guide for Cumberland, MD - Tax Credits & Rebates

What Solar Tax Credits, Incentives, and Rebates are Available in Cumberland?

Source: https://www.dsireusa.org/

Solar incentives are intended to make renewable energy usage more affordable via financial incentives for individuals who install solar panels on their homes. Various types of incentives, like discounts, cash back or credit towards your monthly utility bill, may be available to you. Some incentives may be provided via the Maryland government, by your utility company or by county or municipality, while other incentives are federal. You might qualify for any of the following types of solar incentives:

• Rebates: Solar rebates might be offered by your local utility company, or by your state or county. These rebates are essentially partial refunds that are applied after you pay for a solar system and before tax credits are calculated.
• Net Metering: Net metering is an incentive you can get once your solar panels are up and running. If you've signed a net metering agreement with your Cumberland utility company, the company will subtract the value of the excess energy your solar system produces from your monthly utility bill. In some areas, this credit is dollar-for-dollar, while in others you might receive a refund equivalent to a percentage of the value.
• Tax Exemptions: Sales tax exemptions are applied at the point of sale for your solar panels. Property tax exemptions allow you to exclude the value added by your solar system when you calculate how much property tax you need to pay on your house.
• Tax Credits: Unlike tax deductions, tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the federal government.
• Solar Renewable Energy Certificate (SREC): SRECs and similar performance-based incentives are normally handled by your state government. Once your solar system meets the qualification threshold (generally a small amount of energy production), you are eligible to receive SRECs that you can then sell to your utility company or other buyers. The money you make from the sale is generally considered part of your taxable income.

Federal Solar Incentives

Federal incentives are the type of incentives that you are most likely to have some familiarity with. 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 is applied to the total cost of solar panel installation, including the panels themselves as well as equipment, accessories and labor. You can claim this credit for panels installed after January 1, 2006 on a primary or secondary residence located in the United States that you own. The tax credit ranges from 26-30% of total costs depending on when your project was completed. There is no maximum claim amount.

Reaching out to your local Cumberland solar panel installation expert is the best way to learn more about how the ITC may apply to your situation.

The Inflation Reduction Act, passed in August 2022, expanded and extended the ITC (as well as renaming it to the Clean Energy Credit). Under the new program, solar installation projects started after January 1, 2022 and completed by the end of 2032 might qualify for a 30% tax credit. This percentage will then decrease slightly each year until the current Clean Energy Credit expires in 2035. Beginning in 2023, it will also be easier to obtain credits for energy storage systems under this new program.

More information about the new Inflation Reduction Act can be found here. Your local Cumberland solar panel installers are the best people to answer your questions regarding the new Clean Energy Credit and how it may apply to you.

State & Local Solar Incentives

Federal solar incentives are not your only option; tax credits, rebates and more may be offered at the state and local level. Incentives may be provided by the state of Maryland, or by your county or municipality. Certain incentives are available for only a limited time, while others are ongoing.

Next Steps for Installing Solar in Cumberland

You can apply for and receive solar incentives from the Maryland government and the federal government, as well as from your local utility company. This increase in availability of solar initiatives in the past 15 years has helped increase nationwide solar energy use enormously. We recommend talking to your local Cumberland solar installation expert to learn more about these incentives and to make sure that you're getting the most money possible for your solar system.