2023 Solar Incentives Guide for Towson, MD - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Towson.
You'll learn about:
- Local & State Solar Incentives
- Federal Tax Credits (Updated for 2023 and beyond)
- Ways to optimize your solar investment
Solar installers are experts in maximizing your solar tax credits and rebates.
Get a free quote from one of our trusted Towson solar installers to see how much you can save.
Please enter a valid 5-digit zip code!
Updated May 04, 2023
Why you can trust EcoWatch
What Solar Tax Credits, Incentives, and Rebates are Available in Towson?
Residential Clean Energy Rebate Program
SWH: $500/project (flat per installation/household incentive)
New GHC: $3,000/project
GHC Replacement: $500/project
Solar Renewable Energy Certificates (SRECs)
Sales and Use Tax Exemption for Residential Solar and Wind Electricity Sales
Property Tax Exemption for Solar and Wind Energy Systems
Clean-Burning Wood Stove Grant Program
Pellet Burning Stove: $700
Baltimore County - Property Tax Credit for Solar and Geothermal Devices
Local Option - Property Tax Credit for High Performance Buildings
Baltimore County - Property Tax Credit for High Performance Buildings and Homes
Homes (LEED or NGBS): 40% - 100% of county real property taxes assessed for 3 - 5 years
Homes (Energy Improvements): varies, equal to the % of energy efficiency improvement over a baseline of existing home or the energy code for new homes
Local Option - Property Tax Credit for Renewables and Energy Conservation Devices
Baltimore Gas & Electric Company (Electric) - Residential Energy Efficiency Rebate Program
Clothes Dryer (Electric): $50
Clothes Washer: $75 - $100
Hybrid Heat Pump Water Heater: $500
Pool Pump: $150 - $400
Refrigerator: $100
Dehumidifier: $30
Refrigerator or Freezer Recycling: $50, plus $25 bonus when recycling an old, working room A/C or dehumidifier at the same time
Room A/C or Dehumidifier Recycling (*May 20, 2017 only*): $25
Smart Thermostat: $100
Heating & Cooling
Air-Source Heat Pump: $400 - $650
Central A/C: $300 - $500
Gas Furnace: $250
Furnace Blower Motor: $50 - $100
Geothermal Heat Pump: $1,500
Lighting
Instant discounts vary by participating retailer; see program website
Baltimore Gas & Electric Company (Gas) - Residential Energy Efficiency Rebate Program
Clothes Dryer (Electric): $50
Clothes Washer: $75 - $100
Hybrid Heat Pump Water Heater: $500
Pool Pump: $150 - $400
Refrigerator: $100
Dehumidifier: $30
Refrigerator or Freezer Recycling: $50, plus $25 bonus when recycling an old, working room A/C or dehumidifier at the same time
Room A/C or Dehumidifier Recycling (*May 20, 2017 only*): $25
Smart Thermostat: $100
Heating & Cooling
Air-Source Heat Pump: $400 - $650
Central A/C: $300 - $500
Gas Furnace: $250
Furnace Blower Motor: $50 - $100
Geothermal Heat Pump: $1,500
Lighting
Instant discounts vary by participating retailer; see program website
Residential/Community Wind Grant Program
Community: $1000/kW - $4000/kW, depending on the system capacity
Federal Residential Renewable Energy Tax Credit
Source: https://www.dsireusa.org/
Solar incentives are designed to encourage people to switch their home over to renewable energy by offering financial incentives that lower the burden of solar panel installation and use. You may be eligible for several types of incentives, such as discounts, cash back or credit towards your monthly utility bill, depending on your situation. Some incentives come from your specific utility company, county or municipality, some from the Maryland government and others from the federal government. Some broad categories of solar incentives include:
- Tax Exemptions: Sales tax exemptions are applied at the point of sale for your solar system. Property tax exemptions allow you to ignore the value added by your solar system when calculating the amount of property tax you need to pay on your home.
- Tax Credits: Tax credits reduce, dollar-for-dollar, the amount of income tax you owe the federal government. Tax credits differ from tax deductions.
- Rebates: Rebates, or partial refunds after a purchase, are typically applied prior to any solar tax credits being calculated. Rebates can be offered by your local utility company, by your county or by your state.
- Net Metering: You may be able to sign a net metering contract with your Towson utility company that will 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.
- Solar Renewable Energy Certificate (SREC): SRECs can be sold to your utility company (or other buyers) for cash that typically becomes part of your taxable income. Generally, you must meet a certain (small) threshold of energy production before your solar system is eligible for SRECs or other performance-based incentives. SRECs and similar incentives are normally handled by your state government.
Federal Solar Incentives
Federal solar incentives are likely the first thing that you think of when you think about solar incentives. It's likely that you've heard of the Federal Solar Investment Tax Credit, or ITC. The ITC is a tax credit equal to a specified percentage of the money you spend on solar panels for your home.
The ITC can be applied to solar systems installed after January 1, 2006 on a primary or secondary residence in the United States that you own. Initially, the credit applied to 30% of the total cost — for panels, equipment, labor and accessories — although the percentage may range from 26-30%, depending on when your solar project was undertaken. There is no cap on the claim amount.
To know exactly how much money the ITC could save you, talk to your local Towson solar panel installer.
The Inflation Reduction Act, passed in August 2022, added more provisions to the ITC (as well as renaming it to the Clean Energy Credit). Homeowners are now eligible for a credit of 30% of the total costs of solar system installation for projects started after January 1, 2022 and completed before the end of 2032. The percentage will then begin to decrease on a yearly basis until the Clean Energy Credit ends in 2035. Starting in 2023, it will also be easier to get credits for energy storage systems under this new program.
More information about the new Inflation Reduction Act can be found here. Your local Towson solar panel installation expert is the best person to answer your questions regarding the new Clean Energy Credit and how it will apply to you.
State & Local Solar Incentives
Some solar incentives may be provided at the state and local level. Similar to federal incentives, these can include rebates, tax credits and more. These solar incentives — which might be given 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 Towson
There are a variety of solar incentives: those given by the federal government, those given by the Maryland government and those given by local utility companies, to name a few. Solar energy use has grown enormously in the last 15 years, thanks to these incentives. Reaching out to your local Towson solar panel installation company is the right first step towards making sure you get all the incentives you qualify for when you switch to solar energy.
Best Social Impact
Palmetto Solar
- Expansive service area
- Makes charitable contributions
- Certified B Corp
- No leases or PPAs
- Quality of installation may vary by location
EcoWatch's Towson, MD Solar Incentives FAQs
How much can I save annually on my electric bill if I add solar panels to my Towson home?
Typically, homeowners in Towson who install solar panels save around $747.69 per year, or around $14,206.16 over 20 years after they make the switch.
What are the top solar panel installation companies near me?
To find the best solar panel installation companies near you, read our article on the top solar companies in Towson.
If I change out my appliances for ones that utilize solar energy, are there any credits I can claim?
The new Inflation Reduction Act provides multiple incentives designed to reward homeowners for making eco-friendly upgrades. Some incentives include tax credits and rebates for installing new electric appliances. You can find more details about these incentives here.
Can I claim incentives both towards the initial cost of solar panels, and later as reimbursement?
Yes, you can claim both tax credits and rebates towards the cost of your solar panels. Depending on which incentives you are claiming, they may apply in a different order. Make sure that you talk to your solar installer or a local tax professional to verify that you are claiming incentives correctly and getting the most money possible.
Can I use a combination of multiple types of renewable energy to power my home?
Yes, you can utilize multiple types of renewable energy to power your home — for example, a combination of solar and geothermal. You can also combine renewable energy generation with a non-renewable backup source of energy. Be sure to discuss your proposed plan with your local Towson solar panel installer, so that you understand what you'll need and what incentives you may or may not qualify for.
Our goal is to reach as many people as we can with sensible solutions like solar energy. Our team of full-time local researchers collects solar price and installation data for every city in America then compiles it to create these digestible city guides. If you want to read our solar expert's opinion on the top solar companies featured here, follow this link.
Solar incentive research was conducted by Melissa Smith and Karsten Neumeister. Local data analysis was conducted by James Savino. See something we missed or could do better? Email the editor.