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

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

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

The phrase "solar incentives" broadly refers to financial incentives that are in place to encourage people to use renewable energy by making solar panels more affordable. Incentives might 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 Maryland government or your specific utility company, county or municipality. You might qualify for any of the following types of solar incentives:

• Tax Exemptions: Your solar panel system may qualify for exemptions on both sales and property tax. Sales tax exemptions are applied at the time of purchase. Property tax exemptions let you exclude the value added by your solar panels when calculating property taxes on your house.
• Rebates: A rebate is a partial refund after the purchase of your solar panels. These may be offered by your local utility company, your county or your state. The rebates are usually applied before tax credits are calculated.
• Tax Credits: Tax credits decrease, dollar-for-dollar, the amount of income tax you owe the government. These are different from tax deductions.
• Solar Renewable Energy Certificate (SREC): In general, solar systems that produce over a threshold (normally small) amount of electricity qualify for SRECs or other performance-based incentives. SRECs and the like are typically offered by your state government. When you receive an SREC, you can sell it to your utility company or another buyer, and the money you receive is normally considered part of your taxable income.
• Net Metering: Net metering becomes relevant after your solar system is up and running. If you've signed a net metering agreement with your Largo utility company, they will subtract the value of the excess energy produced by your solar system from your monthly utility bill. In some places, this credit is dollar-for-dollar, while in other places you might be refunded a percentage of the value.

Federal Solar Incentives

When you think about solar incentives, you likely think of federal incentives first. 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 percentage of your solar system's cost.

The ITC was originally for 30% of the cost of installing a solar system, although that number has fluctuated slightly over time between 26-30%. The percentage you qualify for will depend on when your solar system was installed. The total installation cost includes the panels themselves as well as the cost of equipment, labor and accessories. There is no maximum claim amount. 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.

Speaking with your local Largo solar panel installation expert is the best way to understand how the ITC could apply to you.

The Inflation Reduction Act, passed in August 2022, made some changes to the ITC (as well as renaming it to 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. The amount will decrease slightly on a yearly basis until the current program ends. Starting in 2023, it will also be easier to claim credits for energy storage systems under the new laws.

More information about the new Inflation Reduction Act can be found here. To best understand how the new Clean Energy Credit applies to you, get in touch with your local Largo solar installation company.

State & Local Solar Incentives

Some solar incentives are often also provided at the state and local level. Like with federal incentives, these might include rebates, tax credits and more. These incentives — which might 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 Largo

The nationwide use of solar energy has gone up tremendously in the past 15 years, in part due to the increase in availability of solar incentives. You might receive these incentives from the Maryland government, the federal government or your local utility company. We suggest talking to your local Largo solar installer for more information about these incentives and to make sure that you're getting the largest number possible for your solar system.