2023 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 2023 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
Wood Heating Fuel Exemption
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
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
Solar incentives encourage homeowners to make the switch to renewable energy by offering financial incentives meant to lower the burden of solar panel installation and use. Solar incentives can include cash back, upfront discounts or credit towards your monthly utility bill. Some incentives are provided by the federal government, some by the state of Maryland and some by your specific utility company, county or municipality. Some broad categories of solar incentives include:
- Tax Credits: Tax credits are dollar-for-dollar reductions (not deductions) in how much in taxes you owe the federal government.
- Net Metering: You can sign a net metering contract with your Frederick utility company that will apply to all or a percentage of the excess electricity that is generated by your solar panels. They will then subtract this value from your monthly utility bill.
- Tax Exemptions: These may come in the form of property tax exemptions, which would allow you to ignore the value added by your solar panels when paying taxes on your home. They may also include exemptions on sales tax at the time of purchase.
- Solar Renewable Energy Certificate (SREC): SRECs can be sold to your utility company (or other buyers) for money that normally counts as part of your taxable income. Typically, there is a small threshold of energy production to meet before your solar system is eligible for SRECs or other performance-based incentives. These kinds of incentives are generally handled by your state government.
- Rebates: Solar companies may 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. If you receive a rebate, that amount will usually come off the total price before tax credits are calculated.
Federal Solar Incentives
Federal solar incentives are likely to be the first thing that comes to mind when thinking about solar incentives. You've likely heard of the Federal Solar Investment Tax Credit, or ITC. This incentive is a tax credit equal to a predetermined percentage of the money you spend on your solar system.
The ITC can be applied to the total cost of solar system installation, including the panels themselves as well as equipment, labor and accessories. 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. Originally set at 30% of total costs, the credit has fluctuated over time, and you may qualify for different amounts depending on when your project was completed. There is no maximum claim amount.
To best understand how the ITC could apply to you, contact your local Frederick solar panel installation expert and ask for more information.
The Inflation Reduction Act, passed in August 2022, expanded and extended the ITC (as well as renaming it to the Clean Energy Credit). The Clean Energy Credit bolsters the current credit, increasing it up to 30% for solar installations undertaken between January 1, 2022 and December 31, 2032. After 2032, the percentage will be reduced slightly each year until the program expires in 2035. Starting 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 best understand how the new Clean Energy Credit applies to you, talk to your local Frederick solar installers.
State & Local Solar Incentives
In addition to federal solar incentives, there are often also state ones. Rebates, tax credits and more may be available at a more local level. Some incentives are ongoing, while others might only be available for a limited time. They might be provided by your county or municipality, or by the Maryland government.
Next Steps for Installing Solar in Frederick
Solar incentives might come from the Maryland government, the federal government or your local utility company. The growing number of incentives available has facilitated the nationwide growth of solar energy use in the last 15 years. Call your local solar panel installation company today to discover more about the various programs and to save as much money as possible on a solar system for your Frederick home.
EcoWatch's Frederick, MD Solar Incentives FAQs
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