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

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

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

Solar incentives are meant to encourage homeowners to switch to renewable energy by offering financial incentives that lower the burden of solar panel installation and use. The incentives might include cash back, upfront discounts or monthly credits towards your utility bill. Some incentives are given by the federal government, some by the Maryland government and some by your specific utility company, county or municipality. Types of solar incentives might include:

• Rebates: Solar companies may help you claim a rebate, or partial refund of your purchase, for your solar system. Counties or states will also offer limited-time rebates at various times. The value of a rebate will usually be deducted from your total price before any tax credits are calculated.
• Tax Exemptions: Your solar panels 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 added by your solar panels when calculating property taxes on your home.
• Tax Credits: Tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the federal government. (This is different from a tax deduction.)
• Net Metering: Net metering factors in after your solar system is up and running. If you have a net metering agreement in place with your Summerfield utility company, the company will subtract the value of the excess energy produced by your solar system from your monthly utility bill. In some locations, this credit is dollar-for-dollar, while in other areas you might receive a refund equivalent to a percentage of the value.
• Solar Renewable Energy Certificate (SREC): Generally, solar systems that produce more than a predetermined (generally small) amount of electricity will qualify for SRECs or similar performance-based incentives. SRECs and the like are typically provided at the state level. SRECs can be sold to your utility company or another buyer, and generally the money you make is normally considered part of your taxable income.

Federal Solar Incentives

When thinking about solar incentives, federal incentives may be the first thing that comes to mind. The Federal Solar Investment Tax Credit, or ITC, is the best-known federal solar incentive. The ITC offers a tax credit for a set percentage of the cost of your solar system.

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

To better understand how the ITC might apply to you, contact your local Summerfield solar panel installation expert and request more information.

The Inflation Reduction Act, passed in August 2022, expanded and extended the ITC (as well as retitling it the Clean Energy Credit). Homeowners can now receive a credit equal to 30% of the total solar system installation costs for projects that began after January 1, 2022 and will be finished by the end of 2032. The credit percentage will then begin to decrease annually until the Clean Energy Credit expires in 2035. Starting in 2023, the expansion will also make credits for energy storage systems even easier to claim.

More information about the new Inflation Reduction Act can be found here. Your local Summerfield solar panel installation expert is the best person to answer 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 offered at the local or state level. Similar to federal incentives, these could include rebates, tax credits and more. These incentives — which might be provided by the state of Maryland, or by your county or municipality — might be offered on an ongoing basis, or for only a limited time.

Next Steps for Installing Solar in Summerfield

There are a variety of solar incentives: those offered by local utility companies, those offered by the federal government and those offered by the Maryland government, to name a few. The use of solar energy has increased enormously in the last 15 years, partially due to these incentives. We recommend talking to your local Summerfield solar installation company for more information about these incentives and to be sure that you're getting all of the money you can for your solar panels.