2023 Solar Incentives Guide for Essex, MD - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Essex.
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 Essex?
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
Baltimore County - Property Tax Credit for Solar and Geothermal Devices
Local Option - Property Tax Credit for High Performance Buildings
Baltimore County - Property Tax Credit for High Performance Buildings and Homes
Homes (LEED or NGBS): 40% - 100% of county real property taxes assessed for 3 - 5 years
Homes (Energy Improvements): varies, equal to the % of energy efficiency improvement over a baseline of existing home or the energy code for new homes
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
Federal Residential Renewable Energy Tax Credit
Source: https://www.dsireusa.org/
Solar incentives are designed to make renewable energy usage more affordable through financial incentives for those who install solar panels on their homes. Incentives can include things like discounts, cash back or credit on your utility bill each month. Some incentives are handled federally, while others are handled by the state of Maryland or by your specific utility company, county or municipality. You might qualify for any of the following types of solar incentives:
- Rebates: Rebates, or cash back after a purchase, are typically given before any solar tax credits are calculated. Rebates may be offered by your local utility company, by your state or by your county.
- Tax Exemptions: Your solar panel system may qualify for both sales tax and property tax exemptions. Sales tax exemptions are applied at the time of purchase. Property tax exemptions let you ignore the value that solar panels add when you are calculating property taxes on your home.
- Tax Credits: Unlike tax deductions, tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the government.
- Net Metering: Net metering factors in once your solar system is up and running. If you've signed a net metering agreement with your Essex utility company, the company will subtract the value of the excess energy produced by your solar system from your utility bill each month. In some places, this is a dollar-for-dollar credit, while in other areas you may be refunded a percentage of the value.
- Solar Renewable Energy Certificate (SREC): SRECs are credits that can be sold to your utility company (or other buyers) for money that normally counts as part of your taxable income. In most cases, there is a small threshold of energy production to meet before your solar system can earn SRECs or similar performance-based incentives. SRECs and similar incentives are typically handled by your state government.
Federal Solar Incentives
Federal incentives are the type of incentives that you are most likely to have some familiarity with. The Federal Solar Investment Tax Credit, or ITC, is probably the most commonly known federal solar incentive. The ITC allows you to claim a tax credit for a predetermined percentage of your solar system's cost.
The ITC applies to the total cost of installing a solar system, including the panels themselves as well as accessories, equipment and labor. This credit can be claimed for panels installed after January 1, 2006 on a primary or secondary residence that you own, as long as it is located in the United States. The tax credit ranges from 26-30% of total costs depending on when your project was completed. There is no maximum claim amount.
Talking to your local Essex solar panel installer is the best way to understand how the ITC may apply to your situation.
The ITC was renewed and increased in scope after the passage of the Inflation Reduction Act in August 2022. It's also now called the Clean Energy Credit. Under the new program, solar installation projects that are completed between 2022 and 2032 may be eligible for a 30% tax credit. This percentage will then decrease slightly each year until the end of the current Clean Energy Credit in 2035. Starting in 2023, it will also be easier to claim credits for energy storage systems under the new laws.
More information about the new Inflation Reduction Act can be found here. The best way to understand how the new Clean Energy Credit applies to you is to speak with your local Essex solar panel installation expert directly.
State & Local Solar Incentives
There are more than just federal solar incentives; rebates, tax credits and more may be offered at the state and local level. The incentives — which might be provided by the state of Maryland, or by your county or municipality — may be offered for only a limited time, or on an ongoing basis.
Next Steps for Installing Solar in Essex
The variety of available solar incentives has contributed greatly to the increase in the nationwide adoption of solar energy over the past 15 years. You may receive solar incentives from your local utility company, the Maryland government or the federal government. When you're ready to switch over to solar energy, reaching out to your local Essex solar panel installation expert is a great first step.
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EcoWatch's Essex, MD Solar Incentives FAQs
How do I know if I qualify for solar incentives?
Broadly, solar incentives apply to:
- a new solar panel system
- installed on property that you own
- within the U.S.
- within the date range specified by a particular incentive.
Specific incentives, including those run by the Maryland government or by your county/municipality, sometimes have additional qualifications. Talk to your local Essex solar installer to discover what incentives your project will qualify for.
How much can I save on my electric bill annually if I install solar panels on my Essex home?
After adding solar panels to your Essex home, you can expect to save approximately $747.69 per year, or approximately $14,206.16 over 20 years.
Who installs solar panels near me?
To find a top-rated solar panel installer, check out our guide to Essex's top solar panel companies.
What are some environmental benefits of installing solar panels on my home?
You can reduce your carbon footprint by 300 pounds of CO2 annually by switching to solar panels. This adds up to around 6,000 pounds in 20 years. In addition, solar power is a renewable energy source, meaning that switching your home over reduces the drain on our planet's resources.
Can I claim incentives both towards the up-front cost of solar panels, and later as reimbursement?
The order your incentives will be applied in might vary depending on which incentives you receive but typically yes, you can claim multiple types of incentives for your solar project. Check with your solar installer or a local tax professional to ensure you are claiming all the incentives you are eligible for and applying them in the correct order.
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.