2025 Solar Incentives Guide for Lexington Park, MD - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Lexington Park.
You'll learn about:
- Local & State Solar Incentives
- Federal Tax Credits (Updated for 2024 and beyond)
- Ways to optimize your solar investment
Solar installers are experts in maximizing your solar tax credits and rebates.
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What Solar Tax Credits, Incentives, and Rebates are Available in Lexington Park?
Residential Clean Energy Rebate Program
SWH: $500/project (flat per installation/household incentive)
New GHC: $3,000/project
GHC Replacement: $500/project
Solar Renewable Energy Certificates (SRECs)
Sales and Use Tax Exemption for Residential Solar and Wind Electricity Sales
Property Tax Exemption for Solar and Wind Energy Systems
Clean-Burning Wood Stove Grant Program
Pellet Burning Stove: $700
Local Option - Property Tax Credit for High Performance Buildings
Local Option - Property Tax Credit for Renewables and Energy Conservation Devices
Residential/Community Wind Grant Program
Community: $1000/kW - $4000/kW, depending on the system capacity
SMECO - Residential Energy Efficiency Rebate Program
Central A/C
Clothes Dryers: $50
Clothes Washer: $75 (Tier 2) - $100 (Tier 3)
Geothermal Heat Pump
Hybrid Heat Pump Water Heater: $500
LED Lighting: Up to $7/bulb
Ductless Mini Split Air-Source Heat Pump
Pool Pump: $400
Recycled Refrigerator/Freezer: $50
Recycled Dehumidifier: $25
Recycled Room A/C: $25
Refrigerator: $100
Smart Thermostat: $100
Federal Residential Renewable Energy Tax Credit
Source: https://www.dsireusa.org/
The term "solar incentives" refers to a wide 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. Incentives can include things like discounts, cash back or credit on your utility bill each month. Some incentives are provided by the federal government, while others are offered by the Maryland government or by your utility company, county or municipality. You might qualify for any of the following types of solar incentives:
- Tax Exemptions: Your solar panels could qualify for exemptions on both sales and property tax. Sales tax exemptions are effective at the time of purchase. Property tax exemptions allow you to ignore the value added by your solar panels when calculating property taxes on your house.
- 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. The value of a rebate will usually be deducted from 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 typically becomes part of your taxable income. In most cases, you must meet a certain (small) threshold of energy production before your solar system qualifies for SRECs or other performance-based incentives. These kinds of incentives are generally handled by your state government.
- Tax Credits: Tax credits lower, dollar-for-dollar, the amount of income tax you owe the government. These differ from tax deductions.
- Net Metering: You may be able to sign a net metering agreement with your Lexington Park utility company that will apply to all or a percentage of the excess electricity your solar panels generate. They will then subtract this value from your monthly utility bill.
Federal Solar Incentives
When you hear the term "solar incentives," federal incentives might be the first thing that comes to mind. The Federal Solar Investment Tax Credit, or ITC, is likely the best-known federal solar incentive. The ITC offers a tax credit for a specific percentage of your solar system's cost.
The ITC is applied to the total cost of installing a solar system, including the panels themselves as well as accessories, labor and equipment. This credit can be claimed for panels installed after January 1, 2006, on a primary or secondary residence that you own and that is located in the United States. The tax credit ranges from 26-30% of total costs depending on when your project was completed. There is no maximum amount you can claim.
To better understand exactly how much money the ITC could save you, talk to your local Lexington Park solar panel installation expert.
In August 2022, the ITC (now referred to as the Clean Energy Credit) was expanded and extended by the passage of the Inflation Reduction Act. The Clean Energy Credit re-raises the credit up to 30% for solar systems installed between 2022 and 2032. At this point, the percentage will be reduced slightly each year until the program expires in 2035. The program expansion also makes credits for energy storage systems even easier to claim, beginning in 2023.
More information about the new Inflation Reduction Act can be found here. The easiest way to fully understand how the new Clean Energy Credit applies to you is to reach out to your local Lexington Park solar panel installers with your questions.
State & Local Solar Incentives
Some solar incentives may be provided by state and local governments. Like with federal incentives, these may include tax credits, rebates and more. Incentives might be handled by the state of Maryland, or by your county or municipality. Some incentives are available for only a limited time, while others are ongoing.
Next Steps for Installing Solar in Lexington Park
The nationwide use of solar energy has increased enormously in the past 15 years, in part due to the proliferation of solar incentives. You may get these incentives from your local utility company, the Maryland government or the federal government. We recommend talking to your local Lexington Park solar installation company to learn more about these incentives and to make sure that you're getting all the money you can for your solar panels.
EcoWatch's Lexington Park, MD Solar Incentives FAQs
How much will a solar system save me on my electric bill in Lexington Park annually?
After adding solar panels to your Lexington Park home, you can anticipate savings of about $759.37 per year, or about $14,428.06 over 20 years.
What are the top solar panel installation companies near me?
To find a top-rated solar panel installer, check out our guide to the top solar companies in Lexington Park.
When does the federal solar tax credit end?
The federal solar tax credit, previously called the ITC and now called the Clean Energy Credit, is slated to end January 1, 2035. The current 30% credit will end in 2032, replaced by a 26% credit in 2033 and a 22% credit in 2034.
I want to switch my appliances out for ones that are more energy-efficient. Are there any benefits I can claim?
With the passage of the new Inflation Reduction Act, there are a variety of new financial incentives that are available when you make eco-friendly improvements to your home. More details regarding these incentives, including information about incentives for purchasing new appliances, can be found here.
Can I use a combination of multiple types of renewable energy to power my home?
You can use multiple types of renewable energy, or a combination of renewable and non-renewable energy, to power your home. Be sure to go over your plan with your local Lexington Park solar installation expert. They can help you with the plan for your project and also help you understand the various incentives that you might or might not qualify for.
Our goal is to reach as many people as we can with sensible solutions like solar energy. Our team of full-time local researchers collects solar price and installation data for every city in America then compiles it to create these digestible city guides. If you want to read our solar expert's opinion on the top solar companies featured here, follow this link.