2024 Solar Incentives Guide for Frederick, MD - Tax Credits & Rebates

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

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

The term "solar incentives" covers a range of financial incentives put in place to make installing and using solar panels more affordable. This is done to encourage people to switch to renewable energy. You may qualify for various kinds of incentives, such as discounts, cash back or credit towards your monthly utility bill, depending on your situation. Certain incentives come from your specific utility company, county or municipality, some from the state of Maryland and others from the federal government. Categories of solar incentives include:

• Solar Renewable Energy Certificate (SREC): SRECs and other performance-based incentives are generally handled by your state government. Once your solar panel system meets the qualification threshold (usually a small amount of energy production), you are eligible to receive SRECs that can then be sold to your utility company or other buyers. The money you receive from the sale is generally considered part of your taxable income.
• Net Metering: Net metering becomes relevant after your solar panels are up and running. If you've signed a net metering agreement with your Frederick 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 make back a percentage of the value.
• Tax Credits: Tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the federal government. (A tax credit is different from a tax deduction.)
• Rebates: Solar rebates may be provided by your local utility company, or by your state or county. These rebates work as partial refunds that are applied after you purchase solar panels and before tax credits are calculated.
• Tax Exemptions: These could come in the form of property tax exemptions, which let you ignore the value of your solar system when calculating the taxes you pay on your house. You may also qualify for an exemption on sales tax at the time of purchase.

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Federal Solar Incentives

When thinking about solar incentives, you probably think of federal incentives first. An incentive that most people are likely to be familiar with is the Federal Solar Investment Tax Credit (ITC). This is a tax credit for a predetermined percentage of the cost of your solar system.

The ITC originally covered 30% of the cost of installing solar panels, although it has fluctuated slightly over the last few years between 26-30%. The installation date of your solar system will determine what percentage you qualify for. The total cost of installation includes the panels themselves as well as the cost of labor, accessories and equipment. There is no maximum amount you can claim. The ITC can be applied to solar panels installed after January 1, 2006, on your primary or secondary residence. The residence must be owned by you and in the United States.

Curious how the ITC might apply to your specific situation? Get in touch with your local Frederick solar panel installation expert to get more information.

The ITC has been renewed and expanded following the passage of the Inflation Reduction Act in August 2022. It's also now called the Clean Energy Credit. The Clean Energy Credit is valid until 2035. Any solar installation project that is completed between January 1, 2022, and December 31, 2032, may qualify for a 30% tax credit; this amount will be decreased slightly each year until the end of the current program. Starting in 2023, it will also be easier to qualify for credits for energy storage systems with the new act.

More information about the new Inflation Reduction Act can be found here. Your local Frederick solar panel company is the best resource for answering your questions regarding the new Clean Energy Credit and how it may apply to you.

State & Local Solar Incentives

Some solar incentives may be provided at the state and local level. Like with federal incentives, these might include rebates, tax credits and more. Certain incentives are offered for only a limited time, while others are ongoing. Local solar incentives may come from your county or municipality, or from the Maryland government.

Next Steps for Installing Solar in Frederick

Solar incentives can be offered by your local utility company, the federal government or the Maryland government. The growing number of available incentives has facilitated the nationwide growth of solar energy use in the last 15 years. Speak with your local solar panel installer today to find out more information and to save as much money as possible on solar panels for your Frederick home.