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

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

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

The phrase "solar incentives" refers broadly to financial incentives put in place by solar companies and the government to encourage increased use of renewable energy by making installing and using solar panels more affordable. The incentives can include cash back, upfront discounts or monthly credits towards your utility bill. Some incentives are given by the federal government, some by the state of Maryland and some by your specific utility company, county or municipality. Categories of solar incentives include:

• Solar Renewable Energy Certificate (SREC): SRECs are credits that can be sold to your utility company (or other buyers) for cash that is generally considered part of your taxable income. In most cases, there is a small threshold of energy production to meet before your solar system qualifies for SRECs or other performance-based incentives. These kinds of incentives are normally handled by your state government.
• Tax Exemptions: These may come in the form of property tax exemptions, which let you ignore the value added by your solar panels when paying taxes on your house. You could also look for exemptions on sales tax at the time of purchase.
• Net Metering: Don't forget to talk with your Urbana utility company about signing a net metering agreement. This will allow you to receive credit towards your utility bill every month for the value of excess energy your solar panels generate. You could receive either a dollar-for-dollar credit or a percentage of the value.
• Tax Credits: These credits are dollar-for-dollar reductions (not deductions) in how much income tax you owe the federal government.
• Rebates: Solar rebates might be offered by your state or county, or by your local utility company. These rebates work as partial refunds that are applied after your purchase of solar panels and before tax credits are calculated.

Federal Solar Incentives

Federal incentives are the type of incentives that you are most likely to have heard of. It's likely that you've heard of the Federal Solar Investment Tax Credit, or ITC. The ITC is a tax credit that reduces your taxes by a certain percentage of the money you spend on solar panels for your home.

The ITC originally covered 30% of the total cost of installing a solar system, although it has fluctuated slightly over the years between 26-30%. The installation date of your solar system will determine what percentage you qualify for. The total cost of installation includes the panels themselves as well as the cost of labor, accessories and equipment. There is no maximum claim amount. 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.

To best understand how the ITC might apply to your situation, call your local Urbana solar panel installer and ask for more information.

In August 2022, the ITC (now referred to as the Clean Energy Credit) was expanded and extended by the passing of the Inflation Reduction Act. For solar systems installed between January 1, 2022 and December 31, 2032, homeowners can receive a credit equal to 30% of the total cost. This percentage will decrease annually after 2032 until the Clean Energy Credit expires in 2035. Beginning in 2023, it will also be easier to qualify for credits for energy storage systems under this new program.

Click here to learn more about the new Inflation Reduction Act. Your local Urbana solar panel company is the best resource for answering your questions regarding the new Clean Energy Credit and how it applies to you.

State & Local Solar Incentives

There are more than just federal solar incentives; tax credits, rebates and more may be offered at the local or state level. Incentives may be provided by the state of Maryland, or by your county or municipality. Some incentives may be available for only a limited time, while others are ongoing.

Next Steps for Installing Solar in Urbana

The nationwide use of solar energy has gone up tremendously in the past 15 years, in part thanks to the growth in the number of solar incentives. You can obtain these incentives from the federal government, the Maryland government or your local utility company. If you're ready to make the change to solar energy, reaching out to your local Urbana solar panel installation expert is an excellent place to start.