2024 Solar Incentives Guide for Maryland City, MD - Tax Credits & Rebates

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

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

Solar incentives are intended to encourage homeowners to switch to renewable energy by offering financial incentives that lower the burden of solar panel installation and use. You may qualify for different kinds of incentives, such as discounts, cash back or monthly utility bill credits, depending on your situation. Certain incentives come from your specific utility company, county or municipality, some from the Maryland government and others from the federal government. Some broad categories of solar incentives include:

• Solar Renewable Energy Certificate (SREC): SRECs are credits that can be sold to your utility company (or other buyers) for money that is generally considered part of your taxable income. Typically, you must meet a certain (small) threshold of energy production before your solar system can earn SRECs or other performance-based incentives. These kinds of incentives are typically handled by your state government.
• Tax Exemptions: Sales tax exemptions go into effect at the point of sale for your solar system. Property tax exemptions allow you to ignore the value that your solar panels add when you calculate how much property tax you need to pay.
• Rebates: Solar companies may help you claim a rebate, or partial refund of your purchase, for your solar panels. States or counties will also offer limited-time rebates at various times. If you receive a rebate, that amount will usually be deducted from your total price before tax credits are calculated.
• Net Metering: Net metering is an incentive you can get once your solar system is up and running. If you have a net metering agreement with your Maryland City utility company, the company will subtract the value of the excess energy your solar system produces from your monthly utility bill. In some areas, this credit is dollar-for-dollar, while in others you might receive a refund equivalent to a percentage of the value.
• Tax Credits: Different from tax deductions, tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the federal government.

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Federal Solar Incentives

When thinking about solar incentives, you probably think of federal incentives first. 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 specified percentage of the money you spend on your solar system.

The ITC applies to the value of solar panels installed on your primary or secondary residence in the United States. The solar system must have been installed after January 1, 2006, on a property you own for you to be eligible for the credit. The ITC initially covered 30% of all system installation costs (panels, equipment, labor and accessories), although the 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.

To best understand how the ITC may apply to you, speak to your local Maryland City solar panel installer and request more information.

The Inflation Reduction Act, passed in August 2022, made some changes to the ITC (as well as renaming it to the Clean Energy Credit). For solar systems installed between January 1, 2022, and December 31, 2032, homeowners may be eligible for a credit equal to 30% of the total cost. This percentage will decrease annually after 2032 until the Clean Energy Credit ends in 2035. Starting in 2023, it will also be easier to get credits for energy storage systems under the new laws.

More information about the new Inflation Reduction Act can be found here. Your local Maryland City solar panel installers are the best people to answer your questions about the new Clean Energy Credit and how it may apply to you.

State & Local Solar Incentives

Tax credits, rebates and more can be provided at multiple levels. Along with federal solar incentives, there are often state and local ones as well. Certain incentives are ongoing, while others are offered for only a limited time. Your local incentives may come from your county or municipality, or from the Maryland government.

Next Steps for Installing Solar in Maryland City

There are a number of different solar incentives: those given by local utility companies, those provided by the federal government and those provided by the Maryland government, to name a few. Solar energy use has increased enormously in the last 15 years, thanks to these incentives. Reaching out to your local Maryland City solar panel installation company is the right first step towards making sure you get all the incentives you qualify for when you switch to solar energy.