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

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

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

Solar incentives are designed to make renewable energy usage more affordable via financial incentives for individuals who install solar panels on their homes. Solar incentives can include upfront discounts, cash back or credit towards your monthly utility bill. Some incentives are given by the federal government, some by the Maryland government and some by your specific utility company, county or municipality. Some solar incentives you might qualify for are:

• Tax Exemptions: Your solar panels might qualify for both sales tax and property tax exemptions. Sales tax exemptions come into effect at the time of purchase. Property tax exemptions let you ignore the value added by your solar panels when you are calculating property taxes on your house.
• Tax Credits: Tax credits are dollar-for-dollar reductions that lower the amount of income tax you owe the federal government. (A tax credit is different from a tax deduction.)
• Net Metering: Net metering becomes relevant after your solar system is up and running. If you have a net metering agreement with your Kemp Mill 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 areas, this credit is dollar-for-dollar, while in other areas you may receive a refund equivalent to a percentage of the value.
• 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 your total price before any tax credits are calculated.
• Solar Renewable Energy Certificate (SREC): SRECs can be sold to your utility company (or other buyers) for cash that is generally considered part of your taxable income. Generally, there is a small threshold of energy production to meet before your solar system qualifies for SRECs or other performance-based incentives. These kinds of incentives are typically handled by your state government.

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Federal Solar Incentives

When you hear the term "solar incentives," federal incentives might be the first thing that comes to mind. You've likely heard of the Federal Solar Investment Tax Credit, or ITC. This incentive is a tax credit that reduces your taxes by a predetermined percentage of the money you spend installing solar panels.

The ITC applies to a solar system installed on your primary or secondary residence in the United States. The solar panels must have been installed after January 1, 2006, on a property owned by you for you to claim the credit. Initially, the ITC applied to 30% of all installation costs (panels, equipment, accessories and labor), although the covered amount has fluctuated 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 amount you can claim.

Have questions about how the ITC applies to your specific situation? Get in touch with your local Kemp Mill solar panel installation expert to get more information.

The Inflation Reduction Act, passed in August 2022, added more provisions to the ITC (as well as retitling it the Clean Energy Credit). The new Clean Energy Credit now runs until 2035. American homeowners are now eligible for a 30% credit for solar systems that began installation after January 1, 2022, and are completed by the end of 2032. The total credit will then be decreased by a few percentage points every year until the date of expiration. Beginning 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 Kemp Mill solar panel company is the best resource for answering your questions regarding the new Clean Energy Credit and how it will apply to you.

State & Local Solar Incentives

There are often also state solar incentives in addition to those provided by the federal government. Rebates, tax credits and more might be available at a more local level. The incentives — which may be provided by your county or municipality, or by the state of Maryland — could be offered on an ongoing basis, or for only a limited time.

Next Steps for Installing Solar in Kemp Mill

You can receive solar incentives from the Maryland government and the federal government, as well as from your local utility company. Growing availability of solar initiatives in the past 15 years has helped increase solar adoption nationwide. If you're prepared to make the change to solar energy, calling your local Kemp Mill solar panel installation expert is a great first step.