2025 Solar Incentives Guide for Frederick, MD - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Frederick.
You'll learn about:
- Local & State Solar Incentives
- Federal Tax Credits (Updated for 2024 and beyond)
- Ways to optimize your solar investment
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What Solar Tax Credits, Incentives, and Rebates are Available in Frederick?
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
Residential/Community Wind Grant Program
Community: $1000/kW - $4000/kW, depending on the system capacity
FirstEnergy (Potomac Edison) - Residential Energy Efficiency Rebate Program
Refrigerator/Freezer Recycling: $50
Lighting
LED Fixtures: Up to $8/unit
LED Bulbs: Up to $5/bulb
Occupancy Sensors: Up to $7/unit
HVAC & Other
Air-to-Air Heat Pump: $400 - $650
Central A/C: $300 - $500
Ductless Mini-Split Heat Pump: $250 (Tier 2); $400 (Multi Zone)
Geothermal Heat Pump: $1,500
Packaged Terminal Heat Pump: $125
Packaged Terminal Air Conditioner: $125
Furnace Fans: $100
Smart Thermostat: $100
Circulating Pump: $30
Variable-Speed Pool Pump: $400
Two Speed Pool Pump: $150
Home Performance Audit: 75% of home improvements cost, up to $7,500
Quick Home Energy Checkup: Up to $75 in Energy-Saving Products
Federal Residential Renewable Energy Tax Credit
Source: https://www.dsireusa.org/
Solar incentives encourage people to switch to renewable energy by offering incentives meant to lower the financial burden of solar panel installation and use. These incentives can include cash back, upfront discounts or monthly credits towards your utility bill. Some incentives are handled by the federal government, some by the Maryland government and some by your utility company, county or municipality. Types of solar incentives might include:
- Solar Renewable Energy Certificate (SREC): Typically, solar systems that produce more than a predetermined (usually small) amount of electricity can qualify for SRECs or similar performance-based incentives. SRECs and the like are typically offered at the state level. When you receive an SREC, you can sell it to your utility company or another buyer, and this is usually considered part of your taxable income.
- Net Metering: You can sign a net metering contract with your Frederick utility company, that may apply to all or a percentage of the excess electricity your solar panels generate. They will then subtract this value from your utility bill each month.
- Tax Credits: Different from tax deductions, tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the government.
- Rebates: Your solar installer might help you claim a rebate, or partial refund after purchase, for your solar system. Counties or states will also offer limited-time rebates at various times. The value of a rebate will usually be deducted from your total price before tax credits are calculated.
- Tax Exemptions: These might come in the form of property tax exemptions, which can let you exclude the value added by your solar panels when calculating the taxes you pay on your house. They may also include exemptions on sales tax at the time of purchase.
Federal Solar Incentives
When you think about solar incentives, you probably think of federal incentives first. One of the incentives many people are likely familiar with is the Federal Solar Investment Tax Credit (ITC). This is a tax credit for a certain percentage of the cost of your solar system.
The ITC can be applied to the total cost of solar system 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 that you own, as long as it is located in the United States. From its original value of 30% of the total cost, the credit has fluctuated slightly between 26-30%, and you may qualify for varying percentages depending on when your project was completed. There is no maximum amount you can claim.
Your local Frederick solar panel installer can provide you with more information about the ITC and how it might apply to your situation.
In August 2022, the Inflation Reduction Act made revisions to the ITC, now titled the Clean Energy Credit. The Clean Energy Credit has increased the current credit up to 30% for solar installations undertaken between January 1, 2022, and December 31, 2032. At this point, the credit percentage will decrease slightly each year until the end of the program in 2035. Beginning in 2023, it will also be easier to qualify for credits for energy storage systems under this new program.
More information about the new Inflation Reduction Act can be found here. To understand how the new Clean Energy Credit might apply to you, get in touch with your local Frederick solar installers.
State & Local Solar Incentives
Not all solar incentives are federal; tax credits, rebates and more might also be offered at the local or state level. The incentives — which might be provided by the state of Maryland, or by your county or municipality — could be offered for only a limited time, or on an ongoing basis.
Next Steps for Installing Solar in Frederick
The large number of solar incentives available has helped tremendously increase the adoption of solar energy nationwide over the past 15 years. You may receive solar incentives from the Maryland government, the federal government or your local utility company. If you're prepared to make the switch to solar energy, reaching out to your local Frederick solar panel installation expert is an excellent place to start.
EcoWatch's Frederick, MD Solar Incentives FAQs
What are the highest-rated solar panel installation companies near me?
To find the best solar panel installation companies near you, take a look at our article on the best solar companies in Frederick.
What are some of the environmental benefits of switching to solar energy?
You can lower your carbon footprint by 450 pounds of CO2 annually when you switch to solar panels. This adds up to around 9,000 pounds over 20 years. Solar is also a renewable energy source, which means that switching your home over lessens the drain on our planet's resources.
When does the federal solar tax credit end?
The federal solar tax credit, formerly known as the ITC and now titled the Clean Energy Credit, is set to end on January 1, 2035. The current 30% credit will end in 2032, replaced by a 26% credit in 2033 and a 22% credit in 2034.
Can I use a combination of multiple types of renewable energy to power my home?
You can power your home with multiple types of renewable energy, or a combination of renewable and non-renewable energy. Make sure you discuss your ideas with your local Frederick solar installation expert. They can help you as you plan for your project and educate you on the various incentives that you may or may not qualify for.
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