2023 Solar Incentives Guide for Lake Arbor, MD - Tax Credits & Rebates

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

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

The phrase "solar incentives" includes a wide range of financial incentives implemented to make installing and using solar panels more affordable. This is done to encourage people to switch to renewable energy. Different types of incentives, such as cash back, discounts or credit towards your monthly utility bill, might be available to you. Some incentives may be provided via the Maryland government, by your utility company or by county or municipality, while other incentives are federal. You might qualify for any of the following types of solar incentives:

• Solar Renewable Energy Certificate (SREC): SRECs can be sold to your utility company (or other buyers) for money that is generally considered part of your taxable income. In most cases, a certain (small) threshold of energy production must be met before your solar system is eligible for SRECs or similar performance-based incentives. SRECs and similar incentives are normally handled at the state level.
• Tax Credits: Tax credits are dollar-for-dollar reductions (not deductions) in how much in taxes you owe the government.
• Net Metering: Net metering is an incentive you can get once your solar panels are up and running. If you've signed a net metering agreement with your Lake Arbor 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 make back a percentage of the value.
• Rebates: Solar rebates might be provided by your local utility company, or by your county or state. These rebates are essentially cash back that is applied after your purchase of a solar system and before tax credits are calculated.
• Tax Exemptions: Tax exemptions may come in one of two forms. First, there is sales tax exemption, applied at the time you purchase your solar panels. The second is property tax exemption. This allows you to ignore the value added by your solar system when calculating property tax for your house.

Federal Solar Incentives

When thinking about solar incentives, federal incentives may be the first thing that comes to mind. The solar incentive that you may be most familiar with is 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 covers solar systems installed after January 1, 2006 and allows you to deduct from your taxes a percentage of the total cost of solar panels, accessories, labor and equipment. This credit can apply towards a solar panel system installed on a primary or secondary residence that you own in the United States. The original claim amount was 30% of the total cost, although depending on when the project was completed, your credit may range from 26-30%. There is no maximum amount you can claim.

Wondering how the ITC applies to your specific situation? Reach out to your local Lake Arbor solar panel installer to get more information.

In August 2022, the ITC (now titled the Clean Energy Credit) was expanded and extended by the passing of the Inflation Reduction Act. Homeowners can now receive a credit equal to 30% of the total costs of solar system installation for projects started after January 1, 2022 and completed before the end of 2032. The credit percentage will then begin to decrease annually until the Clean Energy Credit ends in 2035. Starting in 2023, it will also be easier to get credits for energy storage systems with the new act.

More information about the new Inflation Reduction Act can be found here. Your local Lake Arbor solar panel installation experts can answer your questions and explain how the new Clean Energy Credit will apply to you.

State & Local Solar Incentives

Tax credits, rebates and more can be claimed at multiple levels. Along with federal solar incentives, there are often state and local ones, too. Incentives might be given by your county or municipality, or by the state of Maryland. Some incentives may be available for only a limited time, while others are ongoing.

Next Steps for Installing Solar in Lake Arbor

You can receive solar incentives from the federal government and the Maryland government, as well as from your local utility company. This increase in availability of solar initiatives in the past 15 years has helped greatly increase nationwide adoption of solar energy. Speak with your local solar panel installation expert today to find out more information and to save as much money as possible on solar panels for your Lake Arbor home.