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

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

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

The term "solar incentives" broadly refers to financial incentives that are in place to encourage people to use renewable energy by making the installation and use of solar panels more affordable. Incentives can include things like discounts, cash back or credit towards your monthly utility bill. Some incentives are offered federally, while others are provided by the Maryland government or by your specific utility company, county or municipality. Some solar incentives you might qualify for are:

• Rebates: A rebate is a partial refund credited to your account after you've paid for 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.
• Tax Exemptions: These may come in the form of property tax exemptions, which would allow you to ignore the value added by your solar panels when paying property tax on your house. You could also look for exemptions on sales tax at the time of purchase.
• Net Metering: Net metering is an incentive you can get once your solar panels are up and running. If you have in place a net metering agreement with your Perry Hall utility company, the company will subtract the value of the excess energy your solar system produces from your utility bill each month. In some places, this is a dollar-for-dollar credit, while in other places you might make back a percentage of the value.
• Solar Renewable Energy Certificate (SREC): SRECs can be sold to your utility company (or other buyers) for money that is generally considered part of your taxable income. Generally, a certain (small) threshold of energy production must be met before your solar system is eligible for SRECs or other performance-based incentives. Incentives like these are typically handled at the state level.
• Tax Credits: These credits are dollar-for-dollar reductions (not deductions) in how much income tax you owe the federal government.

Federal Solar Incentives

When thinking about solar incentives, you probably think of federal incentives first. The Federal Solar Investment Tax Credit, or ITC, is likely the most well-known federal solar incentive. The ITC allows you to claim a tax credit for a predetermined percentage of the cost of your solar system.

The ITC originally covered 30% of the cost of installing solar panels, although it has fluctuated slightly over the last few years between 26-30%. The percentage you qualify for will depend on when your solar system was installed. The total installation cost includes the panels themselves as well as the cost of accessories, labor and equipment. There is no maximum amount you can claim. 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 Perry Hall solar panel installation expert can provide more information about the ITC and how it applies to your situation.

In August 2022, the Inflation Reduction Act expanded and extended the ITC, now called the Clean Energy Credit. The Clean Energy Credit has increased the current credit up to 30% for solar installation projects started after January 1, 2022 and completed by the end of 2032. At this point, the percentage will decrease slightly each year until the end of the program in 2035. Starting in 2023, the expansion will also make it easier to get credit for energy storage systems.

Click here to learn more about the new Inflation Reduction Act. To understand how the new Clean Energy Credit applies to you, reach out to your local Perry Hall solar installation company.

State & Local Solar Incentives

Tax credits, rebates and more might be claimed at multiple levels. On top of federal solar incentives, there are often state and local ones, too. Incentives might be given 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 Perry Hall

Solar energy use nationwide has gone up tremendously in the past 15 years, in part thanks to the growth in the number of solar incentives. You might receive these incentives from the federal government, the Maryland government or your local utility company. If you're prepared to make the change to solar energy, talking to your local Perry Hall solar panel installation expert is a great first step.