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
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 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/
The phrase "solar incentives" includes a wide 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 can include things like discounts, cash back or credit towards your monthly utility bill. Some incentives are offered by the federal government, while others are offered by the state of Maryland or your specific utility company, county or municipality. You might qualify for any of the following types of solar incentives:
- Tax Credits: Unlike tax deductions, tax credits reduce, dollar-for-dollar, the amount of income tax that you owe the government.
- Net Metering: You may be able to 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 deduct this value from your utility bill each month.
- Solar Renewable Energy Certificate (SREC): SRECs and similar performance-based incentives are typically handled by your state government. Once your solar panel system meets the qualification threshold (generally a small amount of energy production), you are eligible to receive SRECs that can be sold to your utility company or other buyers. The money you receive is usually considered part of your taxable income.
- Tax Exemptions: Sales tax exemptions are applied at the point of sale for your solar system. Property tax exemptions let you ignore the value that your solar panels add when you calculate the amount of property tax you need to pay on your house.
- 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.
Federal Solar Incentives
When you hear the term "solar incentives," federal incentives may be the first thing that comes to mind. The solar incentive that you're most familiar with is probably the Federal Solar Investment Tax Credit (ITC), which gives you a credit on your taxes equal to a predetermined percentage of your solar system's cost.
The ITC applies to solar panels installed on your primary or secondary residence in the United States. The solar panels have to have been installed after January 1, 2006 on a property you own for you to be eligible for the credit. The ITC initially covered 30% of all system installation costs (panels, labor, equipment and accessories), although this amount has fluctuated slightly over the years between 26-30%. The installation date of your solar system will determine what percentage you are eligible for. There is no cap on the claim amount.
Your local Frederick solar panel installation expert can provide more information about the ITC and how it may apply to your situation.
In August 2022, the ITC (now called the Clean Energy Credit) was bolstered by the passing of the Inflation Reduction Act. The new Clean Energy Credit now runs until 2035. American homeowners are now eligible for a 30% credit for solar systems installed between January 1, 2022 and December 31, 2032. The total credit will then be decreased by a few percentage points every year until it expires. Starting in 2023, it will also be easier to qualify for credits for energy storage systems under this new program.
Click here to learn more about the new Inflation Reduction Act. Your local Frederick solar panel company can answer any questions you have and explain how the new Clean Energy Credit applies to you.
State & Local Solar Incentives
Some solar incentives may be provided by state and local governments. Similar to federal incentives, these may include rebates, tax credits and more. These incentives might be distributed by the Maryland government, or by your county or municipality. Certain incentives are available for a limited time, while others are ongoing.
Next Steps for Installing Solar in Frederick
Nationwide solar energy use has increased enormously in the past 15 years, in part thanks to the proliferation of solar incentives. You can obtain these incentives from your local utility company, the federal government or the Maryland government. We recommend talking to your local Frederick solar installation expert to learn more about these incentives and to be sure that you're getting the largest number possible for your solar system.
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EcoWatch's Frederick, MD Solar Incentives FAQs
What if I add a solar system to a rental property, vacation home or commercial property? Will I still qualify for incentives?
While we recommend getting in touch with your local solar installer and/or tax professional to best understand what solar incentives apply to you, many incentives will 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 details.
My home already has solar panels. Are there any incentives that I qualify for?
If your solar system was installed after January 1, 2022, you may qualify for the recently increased 30% tax credit under the Inflation Reduction Act. If you installed your system between 2006 and 2021, you might qualify for a tax credit between 26% and 30%, depending on the exact installation date. Speaking with the company that installed your system, or any local Frederick solar installer, can help you learn what incentives you qualify for.
What are the top solar panel installation companies near me?
To learn about the top solar panel installation companies near you, take a look at our article on the best solar companies in Frederick.
What are some environmental benefits of installing solar panels on my home?
You can decrease your carbon footprint by 450 pounds of CO2 annually by switching to solar panels. This adds up to roughly 9,000 pounds in 20 years. Solar is also a renewable energy source, which means that making the switch reduces the drain on our planet's resources.
If I trade in my appliances for ones that can use solar energy, are there credits I can claim?
With the passage of the new Inflation Reduction Act, there are a variety of new financial incentives that are available when you make eco-friendly improvements to your home. More details on these incentives, including information about incentives for purchasing new appliances, can be found here.
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.