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

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

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

Solar incentives are designed to encourage people to switch to renewable energy by providing financial incentives meant to lower the burden of solar panel installation and use. Various types of incentives, such as cash back, discounts or credit towards your monthly utility bill, may be available to you. Certain incentives may be provided via the Maryland government, by your utility company or by county or municipality, while others are federal. Some solar incentives you might qualify for are:

• Net Metering: Don't forget to talk to your Melwood utility company about signing a net metering contract. This allows you to receive credit towards your utility bill every month for the value of excess energy your solar panels generate. You might receive either a dollar-for-dollar credit or a percentage of the value.
• Solar Renewable Energy Certificate (SREC): SRECs and other performance-based incentives are typically handled at the state level. Once your solar panel system meets a certain threshold (usually a small amount of energy production), you can receive SRECs that you can then sell to your utility company or other buyers. The money you make is generally considered part of your taxable income.
• Rebates: Your solar installer might help you claim a rebate, or partial refund after purchase, for your solar panels. States or counties will also sometimes offer limited-time rebates. Any rebates you receive will usually come off your total price before tax credits are calculated.
• Tax Credits: Tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the government. (A tax credit is different from a tax deduction.)
• Tax Exemptions: Sales tax exemptions are effective at the point of sale for your solar panels. Property tax exemptions allow you to ignore the value added by your solar system when you calculate how much property tax you need to pay on your home.

Federal Solar Incentives

When people think of solar incentives, federal incentives might be the first thing that comes to mind. You've likely 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 your solar system.

The ITC originally covered 30% of the total cost of solar system installation, 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 cost of installation includes the panels themselves as well as the cost of equipment, accessories and labor. 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.

Your local Melwood solar panel installation expert can provide more information about the ITC and how it applies to your situation.

The ITC has been renewed and expanded following 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. The amount of the credit will then decrease slightly each year until the current Clean Energy Credit expires in 2035. The 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. To understand how the new Clean Energy Credit might apply to you, talk to your local Melwood solar installers.

State & Local Solar Incentives

Tax credits, rebates and more can be provided at multiple levels. In addition to federal solar incentives, there are often state and local ones, too. These incentives might be handled by your county or municipality, or by the Maryland government. Certain incentives are ongoing, while others are available for a limited time.

Next Steps for Installing Solar in Melwood

Nationwide solar energy use has significantly increased in the past 15 years, in part due to the increase in availability of solar incentives. You may get these incentives from your local utility company, the Maryland government or the federal government. When you're prepared to switch over to solar energy, talking to your local Melwood solar panel installation expert is a great first step.