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

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

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

The term "solar incentives" broadly refers to financial incentives implemented by the government and by solar companies to encourage the adoption and use renewable energy by making solar panels more affordable. Various kinds of incentives, such as discounts, cash back or monthly utility bill credits, may be available to you. Some incentives may be offered by the state of Maryland, by your utility company or by county or municipality, while others are federal. Types of solar incentives might include:

• Rebates: A rebate is a partial refund after the purchase of your solar panels. Rebates could be offered by your local utility company, your county or your state. The rebates are usually applied before calculating tax credits.
• Solar Renewable Energy Certificate (SREC): SRECs and similar performance-based incentives may be available to you if your solar system produces more than a specified (generally small) amount of electricity. Performance-based incentives are usually handled by the state government. You can sell your SRECs to your utility company or other buyers, and the money you make is typically considered part of your taxable income.
• Tax Credits: Tax credits are dollar-for-dollar reductions that lower the amount of income tax you owe the government. (A tax credit is different from a tax deduction.)
• Tax Exemptions: Your solar system could qualify for both sales tax and property tax exemptions. Sales tax exemptions are effective at the time of purchase. Property tax exemptions let you ignore the value that solar panels add when you are calculating property taxes on your house.
• Net Metering: Net metering is an incentive you can get after your solar system is up and running. If you have in place a net metering agreement with your Middletown utility company, the company will subtract the value of the excess energy your solar system produces from your utility bill each month. In some locations, this credit is dollar-for-dollar, while in other places you may get refunded a percentage of the value.

Federal Solar Incentives

Federal solar incentives are likely to be the first thing that you think of when thinking about solar incentives. It's likely that you've heard of the Federal Solar Investment Tax Credit, or ITC. This is a tax credit equal to a specified percentage of the money you spend installing solar panels.

The ITC applies to solar systems installed after January 1, 2006 on a primary or secondary residence in the United States that you own. The credit initially covered 30% of the total cost — for panels, labor, accessories and equipment — although that amount may range from 26-30%, depending on the installation date of your solar system. There is no cap on the amount you can claim.

Have questions about how the ITC applies to your specific situation? Get in touch with your local Middletown solar panel installation expert to get more information.

In August 2022, the Inflation Reduction Act laid out new provisions for the ITC, now titled the Clean Energy Credit. The new Clean Energy Credit is valid until 2035. Homeowners can now apply for a 30% credit for solar systems that began installation on or after January 1, 2022 and will be done by December 31, 2032. This credit will then decrease annually until its expiration. Starting in 2023, the program expansion will also make claiming credit for energy storage systems easier than ever before.

Click here to learn more about the new Inflation Reduction Act. The best way to fully understand how the new Clean Energy Credit might apply to you is to reach out to your local Middletown solar panel company with your questions.

State & Local Solar Incentives

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

Next Steps for Installing Solar in Middletown

Nationwide solar energy use has increased enormously in the last 15 years, in part thanks to the increase in availability of solar incentives. You might receive these incentives from your local utility company, the Maryland government or the federal government. Talking to your local Middletown solar panel installation company is an excellent first step towards getting the most money possible when you switch to solar energy.