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

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

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

The term "solar incentives" generally refers to financial incentives implemented by the government and by solar companies to encourage people to use renewable energy by making installing and using solar panels more affordable. Incentives might include things like discounts, cash back or monthly utility bill credits. Some incentives are offered federally, while others are handled by the Maryland government or your utility company, county or municipality. Some solar incentives you might qualify for are:

• Rebates: A solar rebate is a partial refund credited to your account after you've paid for your solar system. These could be offered by your local utility company, your state or your county. The rebates are usually applied before calculating tax credits.
• Tax Exemptions: Sales tax exemptions are effective at the point of sale for your solar panels. Property tax exemptions let you ignore the added value of your solar system when calculating how much property tax you need to pay.
• Solar Renewable Energy Certificate (SREC): SRECs and similar performance-based incentives are normally handled by your state government. Once your solar panel system meets the threshold (normally a small amount of energy production), you are eligible to receive SRECs that can then be sold to your utility company or other buyers. The money you receive from the sale is generally considered part of your taxable income.
• Tax Credits: Different from tax deductions, tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the government.
• Net Metering: You can sign a net metering contract with your New Carrollton utility company. This agreement may apply to all or a percentage of the excess electricity your solar panels generate. They will then deduct this value from your utility bill each month.

Federal Solar Incentives

When people think of solar incentives, federal incentives may be the first thing that comes to mind. The solar incentive that you're most familiar with is probably the Federal Solar Investment Tax Credit (ITC), which gives you a credit on your taxes equal to a percentage of your solar system's cost.

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

Your local New Carrollton solar panel installer can offer more information about the ITC and how it might apply to your situation.

In August 2022, the Inflation Reduction Act expanded and extended the ITC, now dubbed the Clean Energy Credit. For solar system installations that begin after January 1, 2022 and are completed by the end of 2032, homeowners can apply for a credit for 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 obtain credits for energy storage systems under the new laws.

More information about the new Inflation Reduction Act can be found here. Your local New Carrollton solar panel company is the best resource for answering your questions about the new Clean Energy Credit and how it may apply to you.

State & Local Solar Incentives

Some solar incentives are often also provided by state and local governments. As with federal incentives, these could include tax credits, rebates and more. The incentives — which may be provided 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 New Carrollton

The expanding number of solar incentives available has helped tremendously increase the adoption of solar energy nationwide over the last 15 years. You can get solar incentives from the Maryland government, the federal government or your local utility company. Getting in touch with your local New Carrollton solar panel installer is the best first step towards getting the most money possible when you switch to solar energy.