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

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

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

Solar incentives are designed to make renewable energy usage more affordable through financial incentives to help people install solar panels on their homes. Different kinds of incentives, including discounts, cash back or credit towards your monthly utility bill, might be available to you. Certain 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:

• Rebates: Rebates, or partial refunds after a purchase, are typically applied prior to any solar tax credits being calculated. These rebates might be provided by your local utility company, by your county or by your state.
• Net Metering: Net metering factors in once your solar panels are up and running. If you've signed a net metering agreement with your Laurel utility company, they will subtract the value of the excess energy produced by your solar system from your monthly utility bill. In some locations, this is a dollar-for-dollar credit, while in other areas you may be refunded a percentage of the value.
• Tax Exemptions: These could come in the form of property tax exemptions, which would allow you to exclude the value added by your solar panels when calculating the taxes you pay on your home. They may also include exemptions on sales tax at the time of purchase.
• Tax Credits: Unlike tax deductions, tax credits reduce, dollar-for-dollar, the amount of income tax that you owe the government.
• Solar Renewable Energy Certificate (SREC): SRECs are credits that can be sold to your utility company (or other buyers) for cash that typically becomes part of your taxable income. In most cases, a certain (small) threshold of energy production must be met before your solar system qualifies for SRECs or similar performance-based incentives. These kinds of incentives are normally handled at the state level.

Federal Solar Incentives

When thinking about solar incentives, federal incentives are likely the first thing that comes to mind. It's likely that you've heard of the Federal Solar Investment Tax Credit, or ITC. This is a tax credit that reduces your taxes by a predetermined percentage of the money you spend on solar panels for your home.

The ITC can be credited towards the value of solar panels installed on your primary or secondary residence in the United States. The solar system has to have been installed on a property you own after January 1, 2006 for you to be eligible for the credit. The ITC originally paid out 30% of all system installation costs (panels, equipment, labor and accessories), although the total amount has fluctuated slightly over the last few 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.

Wondering how the ITC applies to your specific situation? Reach out to your local Laurel solar panel installation expert to get more information.

The ITC was both renewed and expanded by the passage of the Inflation Reduction Act in August 2022. It's also now called the Clean Energy Credit. Now, solar installation projects begun after January 1, 2022 and finished by December 31, 2032 may be eligible for a 30% tax credit. This credit amount will then see a slight annual decrease until the current Clean Energy Credit expires in 2035. Beginning 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. To better understand how the new Clean Energy Credit will apply to you, get in touch with your local Laurel solar installation expert.

State & Local Solar Incentives

Some solar incentives may be provided by state and local governments. As with federal incentives, these can include tax credits, rebates and more. These solar incentives — which may be given by the state of Maryland, or by your county or municipality — could be offered for only a limited time, or on an ongoing basis.

Next Steps for Installing Solar in Laurel

The nationwide use of solar energy has significantly increased in the last 15 years, in part due to the growth in the number of solar incentives. You may get these incentives from your local utility company, the Maryland government or the federal government. Reaching out to your local Laurel solar panel installation company is an excellent first step towards getting all the incentives you qualify for when you switch to solar energy.