Maryland solar rebates and incentives: 2024 guide

Maryland has some of the most generous solar incentives in the country, with big rebates, clean-energy credits you can sell for cash, and tax exemptions. And with the relatively high cost of grid electricity, going solar in Maryland adds up to big savings.

If you're considering going solar in Maryland, we have good news: Some great incentives can substantially improve your return on investing in solar panels.

Residential Clean Energy Credit

The Residential Clean Energy Credit, formerly known as the federal investment tax credit (ITC), can reduce your solar panel system's cost by 30%. Your entire system, including all the equipment, labor, permitting, and sales tax, qualifies for the ITC. 

When you file your taxes, you can claim this incentive as a credit towards your federal tax bill. Just keep in mind that to qualify for the ITC, you need to purchase your system either with cash or a solar loan–if you lease your system, you won't be eligible. 

You also need a high enough tax bill, though you can roll over any remaining credit year-to-year until the end of 2034 when the ITC expires. The only time you might be eligible for a direct payment for the ITC is if you're a tax-exempt entity, like a nonprofit organization. 

Maryland Residential Clean Energy Rebate Program 

The Maryland Energy Administration offers a $1,000 rebate to Maryland homeowners who install solar panels. The installation needs to be performed by a member of NABCEP, a board that certifies solar installers. Applications must be submitted by June 30, 2024. Funding is limited and rebates are granted on a first come, first served basis until the pool is exhausted. This year’s allotment could cover 4,600 homes statewide. 

Solar Renewable Energy Certificates (SRECs)

Under this program, you are granted one Maryland SREC for each megawatt-hour (MWh) of clean electricity your panels produce, which you can then sell in the SREC market. Most solar owners use a broker to handle the confusing part—selling the SRECs to the utility companies. The broker would pay you directly for the SRECs.

In the last few years leading up to 2024, the market price of a Maryland SREC has been about $55. So a 5 kW solar array that generates about 6 MWh annually (based on typical production in the Mid-Atlantic) could earn an extra $330 each year through SRECs.

In addition to the great rebates and incentives above, some counties in Maryland also offer a solar property tax exemption. 

Solar panels tend to increase a home’s property value—but in the counties where this policy is in effect, you will not have to pay tax on the increased assessed value brought on by this big home improvement project—at least for a few years. The average property tax in Maryland is 1.05%. 

If you connect your solar panel system to the grid in Maryland, you can benefit from net metering—which is really the ultimate incentive for rooftop solar. 

Under net metering, the sun doesn’t need to shine all the time to get massive value from your solar panels. Your utility company (PEPCO, Potomac Edison, Delmarva, BGE, or one of the municipal / rural not-for-profit companies) essentially works like a bank account for all the energy your solar panels produce in a given month.

When the sun shines, your home’s electrical system first takes as much power as it needs from the solar panels. If the panels make any excess energy, it gets sent back onto the grid, and the utility credits that excess to your energy bill. 

When the sun isn’t shining and you need grid electricity to power your home, your electric company just starts drawing against your credits. You won’t pay for electricity until those credits run out.

A few nuances to keep in mind about Maryland’s version of net metering:

• Credits are calculated in kWh, not dollars. It’s possible that with solar panels in Maryland you’ll no longer need to pay cash for electricity, but you will still need to pay cash monthly for any “fixed fees” like meter connection costs. 

• You can cash out excess credits, or roll them forward indefinitely. If you want to cash out your credits, Maryland’s “true up” reconciliation date is in April, so if you have any extra energy credits on your account at that point, you can trade them in for a cash credit to your utility account—though it’s paid out at a lower rate than the retail cost of electricity. As of 2023, solar customers can also opt to carry forward their energy credits indefinitely.

In addition to solar incentives, Maryland also offers some battery incentive programs to bring down the price of energy storage. 

Homeowners who install an energy storage are eligible for a state tax credit of up to $5,000, or 30% of the cost of that system, whichever is less. The total funding for this tax credit is $450,000 for residential systems, which works out to 90 households per year. You will be able to join a waitlist if your application for the current tax year comes too late to make a claim.

And under the federal residential clean energy tax credit, solar batteries are also eligible for a 30% federal tax credit—it’s the same credit as solar panels.

So if you’re interested in a solar battery as a backup power source, there you have it. It should be said that solar batteries don’t make much financial sense for Maryland residents because the net metering policy is already so favorable to consumers—there’s no cash advantage to hoarding your own solar power, because the utility gives you full credit for its retail value—and the virtual power plant programs in Maryland are limited.