Get $1,000 back plus a 30% tax credit on a home solar installation in Maryland
Maryland has a growing number of solar homes, and great rebates are one of the reasons why.
If you live in Maryland, you get the benefit of the Residential Clean Energy Grant Program. This simple program gives you $1,000 back on the installation of a home solar array.
This program can be combined with the federal solar tax credit, which takes 30% off the price of a solar array in 2019 (the credit drops to 26% in 2020).
On top of that, you can earn renewable energy credits when you generate electricity, which can add up to thousands of dollars over the life of your system.
Summary of solar rebates available to Maryland residents:
|Federal tax credit||30% off system price through 2019|
|Maryland Residential Clean Energy Grant Program||flat $1,000 rebate for systems up to 20 kW|
|Solar Renewable Energy Credits||Earn a credit for every megawatt-hour of electricity generated (currently worth $64 per mWh)|
How does the Clean Energy Grant work?
Unlike many other solar incentive programs, the amount of cash back you get from Maryland’s Clean Energy Grant doesn’t depend on the size of the array. There are separate residential and commercial programs. For the residential program, it’s a flat $1,000 cash back for any system between 1 and 20 kilowatts in size.
The amount of money you get from most other solar incentive programs, including the federal tax credit, is either a percentage of the total system cost, or based on how many kilowatts of solar panels you install.
What equipment is eligible?
For the residential program, solar photovoltaic systems between 1 and 20 kilowatts in size are eligible.
The Clean Energy Program incentivizes more than just solar photovoltaics. Other renewable energy technologies are supported too. These include solar thermal ($500 per project), new geothermal heating and cooling systems ($3,000 per project) and geothermal heat pump replacements ($500 per project).
What are the Maryland Clean Energy Grant program requirements?
There are a few important things to be aware of with this grant program:
Only purchased systems
You aren’t eligible for this grant if you use a lease or power purchase agreement to acquire your solar panels. This is one of a few reasons why you should generally choose to purchase rather than lease solar panels.
Only primary residences are eligible
To qualify for the rebate, the home on which the solar PV system will be installed must be a primary residence in Maryland that you own. Unfortunately, this means that vacation homes are not eligible for the rebate.
You must use a NABCEP contractor
The company you hire for the installation must have staff with a North American Board of Certified Energy Practitioners (NABCEP) certification.
NABCEP is an industry organization that provides training and certifications to help ensure a high professional standard in the solar industry. Not all companies have NABCEP-certified staff: it is an optional industry credential, not a legal requirement. Choosing a solar installer with NABCEP certifications increases the likelihood of working with highly qualified professionals.
There are different credentials available from NABCEP. For the Clean Energy Grant, the requirement is for the company to have at least one employee with the NABCEP PV Installation Professional certification or, for companies with at least 50 employees, one certified PV Installation Professional for every 25 non-administrative employees.
If you choose to use The Solar Nerd to get multiple solar quotes, we’ll make sure that the companies we refer you to meet this qualification.
Special consideration for historic homes
If your home is more than 45 years old, you need to find out if installing solar panels would violate local preservation rules.
There are two databases you need to check. The first is a property search at the Department of Assessments & Taxation, and the other is the Maryland's Environmental Resources and Land Information Network. Instructions on how to conduct this search are described in this PDF document from the Maryland Energy Administration.
Limited rebate funds
There is a limited amount of funds allocated to this program every year. At the moment, the limit hasn’t been hit, so residents applying today should qualify for the rebate. The fiscal year for this program starts on July 1 of each year. You can check the budget status at maryland.gov.
How to apply for the Clean Energy Grant
Once your solar panels are installed, you have 12 months to apply for the grant. You will need the following documentation:
- Your invoice for the installation, showing that the system is paid in full.
- Photos of the installed system, with all of the solar panels visible.
- Proof of housing ownership, age and primary residence. You can get this at the Department of Assessment and Taxation website listed above.
After you get this documentation together, you can apply for your rebate online at: https://energy.maryland.gov/residential/Pages/incentives/CleanEnergyGrants.aspx
Other Maryland solar incentives
There’s a few other important solar incentives in Maryland.
Solar Renewable Energy Credits
Solar Renewable Energy Credits (SREC) are a market-based approach used by some states that have a target for renewable energy they want to meet, also known as a Renewable Portfolio Standard. A SREC is a credit representing the production of 1,000 kilowatt hours (1 megawatt hour) of renewable energy. For example, if your solar home generates 5 megawatt hours of electricity in a year, you would receive 5 SRECs. You could then sell those credits on the open market to any entity that is trying to meet a renewable energy target. For example, a utility company with a preponderance of fossil fuel generation could purchase your SRECs to help meet their clean energy target. Because it’s an open market, the price of SRECs fluctations continuously, much like the stock market does.
Maryland has a SREC market, but the price fluctuates quite a bit. A year ago, the price was near $8 per credit. Today (October 2019) the price is $64.
How much is that worth to a homeowner? It depends on the size of your system. My system in Buffalo generates about 5 credits per year, which would be worth $320 per year in Maryland. While that’s not a huge amount of money per year, that does add up to be a few thousand dollars after a decade - if the prices hold up.
To check the current price and find out how to sell your credits, go to the SRECTrade website.
Property tax exemption
Maryland House Bill 1171 created a solar exemption from local and state property taxes. This means that when you add a solar panel system to your house, the increased home equity from that system won’t cause your property taxes to rise.
While this doesn’t affect the upfront price of your solar system, it’s still a big deal. The gross price of a PV system is often in the range of $15,000 or so. Normally, a renovation like this would increase your house assessment, causing your property taxes to rise.
But with a property tax exemption, the value of the solar system doesn’t get added to your home’s assessed value, preventing your taxes from increasing. While on a yearly basis the value of this is relatively small, it really adds up over time.
You can read this article about solar property tax exemptions to learn more.
Maryland sales tax exemption
The state sales tax in Maryland is 6%, but solar energy equipment is exempt from this, giving you a nice rebate right off the top.