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Clear info on home solar power rebates, tax credits, and other benefits

2017 Policy Grade

A

Avg. Yearly Savings

$131

Congratulations! You've found the ultimate guide to going solar in Maryland

2017 Policy Grade

A

Avg. Savings/year

$131

At Solar Power Rocks, our dream is to turn your thoughts of solar power for your home into reality

Note: The numbers above are just estimates for a 5kW solar system, and your home is unique. The best way to know exactly how much money solar power can save you is to connect with one of our partners nearby. A friendly solar expert we trust will give you a buzz and help you craft a personal plan to get the absolute most out of a solar power system for your home. It's 100% free (yes, that’s right, 100% free) and you aren't obligated to buy anything.

Maryland, home of the Star-Spangled Banner, the Orioles, the Appalachian Mountains, Chesapeake Bay, and the warm friendly beaches of the Eastern Shore. Whether you want to go hiking, head for the ballpark, take in some of our nation’s great historical sites, or relax on the beach, you’ll want to do that in a clean safe environment. To keep the Maryland environment looking good, renewable energy like solar power is the word. Here’s what the Maryland legislature has been working on to make that an affordable reality.

Maryland got an early start using renewables. A 2001 law mandated six percent of government building electricity come from renewable sources. That was one of the first government mandated renewable targets across the country. In 2010, all state buildings reduced their energy usage by 15% from a decade prior. Much of this momentum can be attributed to Maryland legislature establishing a strong renewable portfolio standard (RPS). What does that mean for homeowners considering solar power here? Read on.

Questions? Our network of solar experts are on call to assist you. Simply sign up for personalized assistance on our special solar deals page. You can get discounted on-grid pricing as low as $4,000/kW! This is paired with the strong Maryland solar incentives you see below.

Your guide to going solar in Maryland

We've designed this page to be a complete guide to the complicated and sometimes confusing process of installing solar panels on a home in Maryland. Since there's a lot of important information to consider, we've separated the page into sections to help you find what you are looking for. If you find this page useful, please share it with someone who might also find it interesting!

The Solar Strategy section is all about the various financial options you have in Maryland. We've created a tool that asks you a few questions about what you hope to get out of a solar purchase and recommends whether you should pursue a solar lease, loan, or outright purchase. Then, we give you a detailed picture of how each could work for you.

The Policy Information section contains all of our latest research on the rules set by the state legislature and public utilities commission that determines how easy it is to go solar in Maryland. These policies and rules govern everything from renewable energy mandates to whether you get paid retail or wholesale rates for the extra energy your system produces, and can have a huge effect on the viability of solar.

Finally, the Solar Incentives section lists all of the available financial benefits available to homeowners who go solar. This section includes information about money-back rebates and grants, tax credits, and tax exemptions. If you're looking for what Maryland is doing to make solar more affordable for its citizens, you'll find it here.

We hope you find our work useful. If so, please help us keep our research and advocacy as strong as possible by sharing it with someone who might also find it interesting, contributing any amount you can, and by getting yourself personalized savings estimates from our trusted partner network.

Click any of the boxes below to go to that section of the page, or scroll down to read the page in order.

Your Solar Strategy in Maryland

Figuring out the best way to go solar in Maryland can be a little daunting. From loans and leases to power-purchase agreements, there are a lot of options out there. To help you pick the one that might be best, we've created the handy decision tool below.

We'll ask you a few simple questions about you and your home. Once you're done, we'll recommend a good option. Further down this page, we provide cost estimates and example return-on-investment calculations for all the various options:

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Compare the Return of Different Solar Investments in Maryland

The chart above shows the 25-year returns for an investment in solar whether you choose to purchase a system with cash or pay over time with a loan or lease. As you can see, the purchase option leads to the highest dollar-amount returns over time, and the savings are HUGE in MD.

But paying up-front requires a big cash investment. That's why the solar loan option is better. If you take a loan or HELOC, you pay the system cost down monthly, but you still get a huge tax credit, meaning you'll come out way ahead in the first year. Your payments over 15 years will be only a little more than your savings, and you'll still come out tens of thousands ahead in the end.

The option with the smallest savings is for a solar Power-Purchase Agreement (PPA), which means you put $0 down on a rooftop solar system and pay monthly for the electricity, while you accumulate electricity bill savings over time. PPAs are an excellent option if you don't have any equity or cash to put down, and they still save you thousands in MD.

Read more below about each of three very good options for solar in The Old Line State!

Net Present Value of Solar in Maryland

“Net Present What?!” Don’t panic, this isn’t an economics test. NPV is just a tool used to compare investments. Basically, it asks, “if you had X dollars to invest, which investment would get you the best return?” It relies on the idea that getting a return on your investment sooner is better than later, because you can reinvest your early profits and keep the gain train going.

We compare an investment in solar to a “what-if” investment in a Standard & Poor’s (S&P) 500 stock index fund, which has seen growth of about 7% per year over the past 25 years. We use the cost of solar in Maryland and ask “how much better or worse (in 2017 dollars) is an investment in solar than stocks?” Here's what we found for the three different ways of going solar in Maryland:

Look at all that green! When they tell you solar is a good deal in Maryland, this is what they're talking about. A solar investment in Maryland should provide a better return than the stock market whether you choose a PPA, a loan, or pay up front. Here's some more about how we got these numbers:

Solar PPA NPV: $2,090

Saving money without having to put anything down is always going to have a positive NPV. In Maryland, you’ll save $4,393 over 20 years by paying for electricity under a solar PPA, which is the basically having an extra $2,090 to invest now. Read more about PPAs in Maryland below.

Solar Loan NPV: $5,233

As we’re fond of saying, taking a loan for solar is a no-brainer, because it’s like agreeing to pay over time for something that is also making you money, plus you get 30% of the loan value as a federal tax credit (cash in your pocket) after making payments for only 1 year. In the case of Maryland, that tax credit windfall is just one part of the story. On top of it, you'll get a $1,000 state tax credit and you'll also be able to sell your SRECs for big bucks. All that helps push the NPV of a solar loan to over $5,000 better than a similar investment in the stock market. That's a great return for any investment, and it's insane for something that requires no money down. Read more about solar loans below

Solar Purchase NPV: $2,170

The two biggest reasons a solar purchase in Maryland has a positive NPV are the 30% federal tax credit and SREC sales. On top of that, the money you save on electricity is also available for future investment. But you can see above what happens to NPV if you choose a solar loan instead. Unless you need to put cash into an asset, a loan is a much smarter way to pay for solar panels. Read more about solar purchases below.

blue  Solar Power-Purchase Agreements in Maryland

Maryland residents have long enjoyed the ability to get solar from a third-party company and pay monthly, and a PPA is still a great way to go, especially if you haven't got piles of cash or equity in your home. The state legislature and public utilities commissions are really into solar, so there isn't much reason to worry that utility companies will start trying to impose monthly fees on solar homeowners like they have in other states.

For now, leasing a 5-kW solar system can save you about $11 per month, which might not sound like a lot, but add that up over 20 years and consider how much electric companies raise rates on that electrciity you won't be paying for, and you have a end up with a small mountain of cash with very little risk or work. You can put $0 down and start saving right away, while the installaion company takes care of all the maintenance and repairs.

Here's more about how a solar PPA works:

Example savings in Maryland

Annual Electric Bill Before Solar

$1,722

Annual Electric Bill After Solar

$848

Est. Annual Solar Payments

$743

Average Annual Savings

$131

Power-Purchase Agreements (PPAs) are the most popular form of what's called "third-party solar." A PPA just means your solar company owns the panels on your roof, and you pay for the electricity they produce. The numbers above show the savings with a solar PPA for an average home in Maryland. The typical electric bill before solar power is super expensive, but with a PPA, your monthly expenses will be lower. You'll be saving money and saving the planet all at the same time!

Here's an estimate of the monthly savings for a solar PPA in Maryland:

Monthly solar PPA savings in Maryland

With a PPA, your solar company essentially becomes a second utility provider, only the solar electricity is sold to you at a lower rate than the fossil fuel electricity you've been buying from the electric company! Note: your PPA won't eliminate your power bill from your regular electric provider, because you'll still need energy from the grid when the sun isn't shining. But it will save you money!

The less-popular cousin of the third-party solar family is the solar lease. It's basically like renting your panels for a set monthly payment, and getting all the energy they produce—however much it is. Don't get spooked by that language, though. A typical solar lease comes with energy production guarantees that will make sure you're getting what you paid for. In fact, if you're not offered a production guarantee with a solar lease, walk away.

Here's the best part of third-party solar: whether you end up with a lease or a PPA, the installation company owns the panels and will do all the maintenance for you. Usually that means just a good cleaning every year, but if any part of that system fails, you're off the hook! That can be a great benefit to homeowners who are risk averse.

Keep in mind, the numbers above are based on an average home in Maryland. If you're ready for a custom quote for a solar lease or PPA, our network of experts are on call to assist you. Simply sign up for personalized assistance on our special solar deals page.

Home Solar Power: PPA vs. Purchasing

To PPA, or not to PPA? Willsolar Shakespanels would be proud we're discussing this. Here's the basic deal. If you choose to lease your panels, you benefit from no out of pocket costs and an immediately reduced total electricity payment. Because of this, many regard this option as a no-brainer, since there isn't any downside to think of. The only hiccup you'll start to experience is when you consider the long term financial benefit of owning the solar panel system yourself.

In many situations, if you can afford the outlay or can easily secure financing, the cost of the install becomes an investment with a return outpacing even the strongest performing mutual funds. In addition, there's significantly less principal risk, since the energy credits you will be producing are tied to the sun coming up in the morning instead of our financial markets!

Additionally, if you go the PPA route, you must forfeit all the credits and performance payments you would receive by owning the system yourself to the solar PPA company (after all, that's how they can afford to give you such a no-brainer proposition in the first place).

orange square  Solar Loans in Maryland

Don't have $16,000 sitting around to pay for solar? No sweat! As long as you have equity in your home, you can still own solar panels and reap all the benefits. Heck, even if you do have the cash, getting a loan to pay for solar is by far the best option when it comes to percentage return on investment.

That’s because, in Maryland, using a loan to pay for solar is like investing in a business that's sure to succeed, and also earns you a tax break. Your tax savings will be huge in the first year—more than enough to offset the small difference between the loan payments and electric bill savings. All this means you'll never have to spend a cent on solar, and you'll still come out way ahead over 25 years.

A solar purchase like this will make sense for you if the following is true about you and your current situation:

  • You can qualify for a solar loan or home-equity line of credit (HELOC) for $15,650, with a fixed rate of 4% or lower and a 15-year repayment period.
  • You love making money without much risk

Here’s how the numbers pencil out for a Maryland solar purchase with a loan:

  • Installing a typical 5-kW solar system should start at about $16,650. That's how big your loan will need to be to cover it.
  • Maryland offers a rebate of $1,000 off the cost of your system, making it $15,650.
  • The electricity you'll save in the first year of operation would have cost $874, but your annual loan payments will be $1,478, meaning you would spend $604 on solar this year, but...
  • You'll also see a huge tax break. The Feds give you 30% of the cost of your system (after rebate) back as a tax credit, which in this case is $4,695.
  • The final bit of savings comes from Maryland's SREC program (discussed below). SRECs will mean an additional $125 in income from solar this year. Altogether, you'll come out $5,216 ahead after year 1. The cost of your loan will only barely ever wipe away that windfall, and then only many years into the future.
  • The benefits of taking the loan are so great that after the loan is paid off, your profits stack up just like if you bought the system outright. You'll end up with $14,932 in profits over our 25-year example—all without putting a single penny into it. That's HUGE.
  • On top of the green that will stay in your pocket, your system will mean green for the environment, too. 104 trees-worth, every year!
Keep in mind, the numbers above are based on an average home in Maryland. If you're ready for a custom quote for a solar loan, our network of experts are on call to assist you. Simply sign up for personalized assistance on our special solar deals page.

green square  Buying Solar in Maryland

An outright purchase used to be the only way to get solar, and it's still the option that provides the "biggest" financial returns. The reason we put "biggest" in quotes here is because it's technically true. You'll see a net return of almost $25,000 over 25 years if you pay up front. But it requires a significant up-front investment.

If you have equity in your home or can qualify for a solar loan with an interest rate of 4% or less, that's the option to go with. It's like being able to start a business that is sure to succeed, just by having a roof. Read about loans below.

If you've got cash and you prefer to pay up front, you'll put down $15,650 up front. By the end of year 1, incentives and energy savings will erase a bunch of it. Over 25 years, your system will have produced about $25,000 in income. The reason this works is that electricity in Maryland is EXPENSIVE. Solar offsets enough of it to save you about $874 in year 1, and it just goes up from there. As the electric company raises rates, you save more and more, and more...

Finally, there's the state's SREC market, which can make solar homeowners hundreds of bonus dollars over their systems' lifetimes. An SREC is a certificate of renewable energy generation, and you get one each time your solar panels have generated a megawatt-hour (MWh). A 5-kW system in Maryland will produce about 6 MWh of electricity per year, and the utility companies will pay you about $22 per SREC. That translates into about $125 this year and big bucks over time. Read more about Maryland's SREC market below.

Here’s how the numbers pencil out when you pay up front for a 5-kW rooftop solar system in Maryland:

  • Installing a typical 5kW solar system should start at about $15,650 after the state's generous rebate. That's cheaper than solar has ever been, but it still might seem like a big investment. Don’t worry, because after tax breaks and energy savings, your first-year costs will be considerably less than that.
  • The Feds calculate their incentive based on actual out of pocket costs, so take 30% of $16,650, for a tax credit of $4,695. Your total investment is now down to just $10,955.
  • After the tax credit we subtract your first year’s energy savings, which we estimate to be $874. That reduces your cost after the first year to only $10,081.
  • That isn't the end of the savings train! Maryland's SREC Market will save you $125 this year, bringing the final year 1 cost to just $9,956. That's 40% off the starting price!
  • Your system will pay for itself in just 10 years, and over its 25-year life, you'll see a total net profit of $20,451. The internal rate of return for this investment is a stupendous 10.3%!
  • And don't forget... your home's value just increased by close to $23,000, too (your expected annual electricity savings over 20 years)!
  • In addition to all that cash (and home value), you’ve created some green for the earth as well by not using electricity from fossil fuels. It's like planting 104 trees a year, every year your solar power system is humming.
Keep in mind, the numbers above are based on an average home in Maryland. If you're ready for a custom quote for a solar panel system, our network of experts are on call to assist you. Simply sign up for personalized assistance on our special solar deals page.

Maryland Solar Policy Information

Ever wonder why solar seems to be everywhere in some states, but not in others? We did too.

State legislatures and public utilities commissions can enact rules to make solar power accessible for everyone. Favorable rules explain why some of the cloudiest states—New York, New Jersey, and Connecticut, are doing so well with solar, and yet some of those with the most natural solar resources—like Alabama, Mississippi, and Florida—are doing so poorly.

Below is important information about the public policy, rules, and economic reasons that affect your ability to go solar here in Maryland:

RPS

20% by 2022

Grade: B

Maryland's Renewable Portfolio Standard grade

A Renewables Portfolio Standard (RPS) requires utilities in the state to eventually source at least a certain percentage of their electricity from clean, renewable sources like solar panels. Maryland has a pretty ambitious RPS, mandating that 20% of all energy must come from renewable sources by 2022. Maryland’s target of 20% is a relatively strong RPS overall, especially when compared to states that have yet to jump on the RPS bandwagon.

Maryland’s RPS is critical to strong renewable energy policy. Utility companies aren't really all that gung-ho about you producing your own power. After all, it costs them money when you use less of their electricity. They also don’t naturally want to give you big payments for energy you're feeding back into the grid. The main reason the utilities are aiding your transition to lower electric bills and offering you incentives to put solar on your roof is because the state forces them to. If the utilities don't hit their RPS numbers, they have to pay large fees back to the state.

What's an RPS? Your state legislature paves the way for strong solar energy incentives to flourish by setting standards for renewable energy generation within their territories. Those standards are called the state’s renewable portfolio standard (RPS). If utility companies do not meet these standards, they must pay alternative compliance fees directly to the state. Many utilities then determine the best ways to source their energy from renewable sources that are less expensive than this fee.

An RPS is a mandate that says "Hey utilities! Y'all now have to make a certain percentage of your electricity from renewable sources. If not, you'll have to pay us huge fines." The consequences are good, because utilities usually try to meet these RPS standards by creating solar power incentives for you, the homeowner. Read more about Renewable Portfolio Standards.

RPS solar carve out

2% by 2022

Grade: A

Maryland's Solar Carve-out grade

What’s more, a 2007 amendment to the RPS requires utilities to draw at least 2% of that electricity from good, clean solar power by 2022. Maryland is forecasting robust growth in the local solar market as a result of this legislation. They are projecting 1,500 MW of solar power by 2022. That’s a lot of solar power!

What's a solar set aside? A solar set aside guarantees a specific portion of the overall renewable energy mix generated comes from the sun. For those states with progressive standards, high alternative compliance payments, and clear solar carve outs, the faster those areas become ripe for solar.

Some states have higher alternative compliance fees than others, and some states have more progressive alternative energy standards and deadlines than others do.

For instance, New Jersey has an overall RPS of 22.5% by the year 2021. That requires local utilities to source 22.5% of their energy mix from renewable sources by the year 2021. Pretty good. However, New Jersey also has a specific solar set aside of 4.1% by 2028. That’s the type of firm commitment which really gets the industry rolling forward. No wonder why New Jersey is one of the hottest solar markets right now!

Maryland Electricity Prices

$0.14/kwh

Grade: B

Maryland's Electricity cost grade

The average cost of electricity in Maryland is 14 cents/kWh. That’s slightly above the national average of 13 cents/kWh. At Solar Power Rocks, we think the national average is too cheap, so we think energy in Maryland is currently too cheap as well. We know you hate high electric bills, but hear us out.

Most of our electricity still comes from burning millions of tons of fossil fuels. The cost of those fossil fuels in dollars and cents may be low for now, but the environmental costs are astronomical. Switching to solar power now saves you money down the road and helps save the planet. You can thank us later.

Why are electricity prices so important? Because that is what solar power is directly competing against. The cost to produce power with solar is relatively constant (of course how much sun hits your area has an effect), so if you are paying $0.40 per watt for power, then you make FOUR TIMES AS MUCH as the guy or girl paying $0.10 per watt electricity.

The caveat here is that if the $0.10 per watt person has a HUGE rebate, they may be better off than the $0.40 per watt person. Because of that, states without any renewable standards tend to be heavily reliant on cheap coal for electricity, and also have very low electricity prices. When electricity prices are artificially low, that hinders the ability of solar energy to achieve meaningful payback in the state.

Maryland Net Metering

A

Grade: A

Maryland's Net Metering grade

Net-metering requires your utility to monitor how much energy your solar power system produces and how much energy you actually consume to make sure you get credit for the surplus.

Maryland’s net-metering rules let you connect your solar panel system to the grid, and if you generate more kWh than you use, your electric company is required to credit you the going rate toward future bills.

If at the end of a 12-month billing cycle you have generated more electricity than used, you'll get a check at market rates for the difference. However, you still retain the associated SRECs your system produces over that time period.

What is net metering? Net metering is the billing arrangement where you can sell excess electricity back to your utility for equal the amount you are charged to consume it. The more customer friendly net metering policies, the higher the grade.

The grade here specifically reflects individual solar system capacity, caps on program capacity limits, restrictions on “rollover” of kWh from one month to the next (yep just like cell phone minutes), metering issues (like charges for new meters), Renewable Energy Credit (REC) ownership, eligible customers and technology (the more renewables the better), being able to aggregate meters across the property for net metering, and safe harbor provisions to protect customers from solar tariff changes.

Maryland Interconnection Rules

B

Maryland's Interconnection Standards grade

Maryland has enacted strong interconnection standards which outline how you can connect to the grid. Check out Maryland’s Interconnection Rules.

Interconnection rules are a little technical, but they basically allow you to “plug in” to the electric grid with solar panels on your roof. The more complex, out of date, or nonsensical the state rules are for plugging into the grid, the lower the grade.

Specifically, the grade reflects what technologies are eligible, individual system capacity, removing interconnection process complexity for smaller systems, interconnection timelines and charges, engineering charges, prohibiting the requirement of unnecessary external disconnects, certification, spot interconnection vs. wide area interconnection, technical screens, friendliness of legalese, insurance requirements, dispute resolution, and rule coverage.

Solar Incentives in Maryland

Maryland Solar Power Rebates

$1,000 for systems up to 20kW

Grade: C

Maryland's Solar Rebates grade

Maryland has altered their state solar power rebate from previous years. Now, every homeowner installing solar panels on their roof gets a flat $1,000 rebate through the Clean Energy Grant Program. That solar panel rebate is valid only for systems sized 20kW and below. If you’re planning a larger system, you do not qualify for this grant, but you are then eligible for the state production tax credit below.

How do solar rebates work? Similar to getting a rebate card from your local big box store for a dishwasher purchase, state legislatures also provide rebates for solar panel purchases to spur on investment and create new jobs. If you purchase the solar panel system yourself, you qualify for this free cash, which many times is a lump payment back to you. Some solar installers like to take this amount directly off the total installed price, and they'll handle the paperwork for you to make things a lot less complex.

The availability of state and utility rebates were sourced from the Database of State Incentives for Renewables and Energy Efficiency. The better the rebates, the higher the grade.

Maryland Solar Power Tax Credits

$0.0085/kWh for very large systems

Grade: D

Maryland's Solar Tax Credits grade

For homeowners with deeper pockets and lots of land, you can qualify for the state’s Clean Energy Production Tax Credit. To qualify, your solar system needs to be pretty big -- we're talking 28-kW of panels, which is more than 5 times bigger than the average system. So if you have the roof space on your mansion, you can get at least a $1,000 state tax credit.

How do you get there? Maryland will credit you $0.0085 (that’s a fraction of a cent) for each kWh you feed back into the grid toward your annual state tax. So your system would need to kick out at least 23,530 kWh to hit that magical $1,000 level. Only systems sized 20kW and up can do that. If you are in the position to install a system that large, you can take your production tax credit annually for 5 years. Not too shabby, Daddy Warbucks.

For those of us with less-than Titanic-sized incomes, everyone can benefit from the 30% Federal Solar Tax Credit. There's no cap on the federal tax credit and fortunately for Maryland, having a smaller state rebate to deduct means a larger tax credit coming your way.

About state solar tax credits: State tax credits are not technically free money. However, they are 'credits' and not 'deductions' which means that if you have the tax appetite to take advantage of them, then they can be a 1-to-1 dollar amount off your taxes instead of a fraction of the cost of the system. So that means they can be an important factor to consider. In certain circumstances, state tax credits can provide a very powerful incentive for people to go solar.

(Keep in mind, we are not tax professionals and give no tax advice so please consult a professional before acting on anything we say related to taxes)

The availability of personal tax credits for solar energy were sourced from the Database of State Incentives for Renewables and Energy Efficiency. The higher the tax credit amount, the higher the grade.

Solar Power Performance Payments

Varies based on market conditions

Grade: B

Maryland's Solar Performance Payments grade

Another great financial incentive in Maryland is the SREC market. As we discussed above, an SREC is basically just proof of clean energy generation, and solar owners get an SREC every time their system generates 1 megawatt-hour (MWh, or 1,000 kWh) of electricity. Our standard 5-kW system will generate about 6 SRECs per year.

Utility companies buy SRECs from generators (aka homeowners with solar) because they need to show the state that a certain percentage of their energy supply comes from renewable sources. If the utility doesn’t meet that percentage, they have to pay Solar Alternative Compliance Payments (SACP), which are high fees that start at $400 per MWh. That is what gives SRECs their value.

Because of those high fees, prices for SRECs had remained pretty stable over the past few years, averaging $167.50, which meant those 6 SRECs from our example system represented about $1,000 a year for 5-kW system owners. Unfortunately, the high SREC prices have led to an oversupply on the Maryland market, and price have dropped precipitously. Recent prices are at $22 per SREC, and it's hard to know if that'll ever go up again. It could go way up, if the state adopts a new RPS law, as Governor Hogan has called for. Stay tuned.

For reference, Maryland has built in a step-down reduction in the cost of SACPs, which will ultimately end at just $50 by 2023. Here’s a look at the scheduled reductions:

Year SACP
2015 $350
2016 $350
2017 $200
2018 $200
2019 $150
2020 $150
2021 $100
2022 $100
2023 $50
Ongoing $50

In Maryland, SRECs are bundled and sold through brokers, so there’s a bit of paperwork to fill out, and a bit of a fee to sell your SRECs through the broker. The good news that your installer knows the ins and outs of the system, and they’ll help you get the SREC transfers set up so you can just kick back and enjoy the savings. What are you waiting for? Find a great installer in Maryland today!

Explanation of performance payments: Performance payments represent a big chunk of the financial rationale for going solar, and in many instances they make your decision a wise one. For certain states, if you’ve got solar panels on your roof, not only will you be cutting your electric bill down to size, but you'll be getting paid additional cash from your utility company. Pretty awesome, huh? Not only are you generating electricity for yourself, freezing your own popsicles with sun, and feeling like you’re doing something smart for your children or any of the other 4 reasons people go solar, but you are getting PAID!

Utility companies are paying people with solar panels on their roofs because their states say they have to, otherwise they will pay a fee. Therefore, the payment amount to homeowners is typically a little bit less than the amount they would be billed for by the state. For states with these alternative compliance fees, Solar Renewable Energy Credit (SREC) exchanges have popped up. In the above chart, we outlined an estimate of yearly payments a homeowner might expect from the utility company for the SREC credits from their solar energy system.

Expected SREC payments were calculated by using the latest trade values in the SRECtrade database. The availability of feed-in tariffs were sourced from the Database of State Incentives for Renewables and Energy Efficiency. The higher the expected monthly payments, the higher the grade.

If you don’t know what an SREC is, or how they work, check out this great SREC video

Property Tax Exemption

100%

Grade: A

Maryland's Solar Property Tax Exemptions grade

Maryland lawmakers enacted a property tax exemption for your solar panels. That means that making your house more valuable by installing a solar system won’t cost you a penny when tax time rolls around. You can expect an increase in your home value by a factor of 20 times your annual electricity savings. For a 5kW solar system installed in Maryland, that’s about $17,000.

About solar property tax exemptions: Property tax exemption status is a pretty big factor when putting together your investment considerations. Many argue that solar power adds approximately 20 times your annual electricity bill savings (if you are owning the system and not leasing. Leasing still has a positive impact on the ability to sell your home though, in our opinion).

For many average-sized solar power systems on a house, that can mean $20,000 to your home value. (Edit April, 2014: Some companies, like Solar Mosaic, are starting to offer traditional style equity-based home loans for such a thing). An additional $20,000 in property tax basis in many states amounts to a big chunk of change owed back to the state. However, many states have complete exemptions from added taxes when you install solar on your home!

The availability of a property tax exemption for solar energy was also sourced from the Database of State Incentives for Renewables and Energy Efficiency. The stronger the tax exemption, the higher the grade.

Sales Tax Exemption

100%

Grade: A

Maryland's Solar Sales Tax Exemption grade

What’s more, the purchase of your solar panel system is also sales tax exempt thanks to a sales tax exemption enacted in 2011. Thanks, Maryland!

What's the deal with solar power sales tax exemptions? When states give you a sales tax break on solar, we notice. You should too. State sales tax exemption status for the purchase of solar energy systems were sourced from the Database of State Incentives for Renewables and Energy Efficiency. Sales tax exemptions, if present, were all 100%. A handful of states are completely exempt from sales tax regardless, and therefore received ‘A’ grades by default (OR, DE, MT, AK, and NH).

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The consensus on Maryland solar power rebates and incentives

Maryland has been making some good progress on building up the solar energy market in the state. The legislature has set the bar high with a strong RPS (including a solar carve out) and some important solar power rebates and incentives are now flowing into homeowner’s pockets as a result. Solar is now a no-brainer idea in Maryland: good for your kids, environment, local economy, and most importantly – your finances. Don’t miss the boat!

Again, if you are confused about how these numbers work and would like some personalized assistance or a quote of your own, simply connect with our network of solar experts. They’ll help sort out all the pricing, get you access to special deals, and they’re super friendly to boot!

Click here to get hooked up with a local solar installer for your Maryland home or business

61 thoughts on “Maryland Solar Power for your house – rebates, tax credits, savings

  1. Anonymous says:

    Hiya, I am really glad I’ve found this information. Nowadays bloggers publish just about gossip and net stuff and this is actually irritating. A good site with interesting content, that is what I need. Thanks for making this site, and I will be visiting again. Do you do newsletters by email?

  2. Anonymous says:

    MD is not the environmental paradise you imply. Ocean City is the beaches and it is an abomination. Deep Creek Lake in the Appalachins allows development to the top of mountains and folks light up the mountains like Xmas trees at nite.The Balto-Wash Corridor looks like North Jersey now.Yea there are some good State Parks but open wilderness areas? Where? State pliticians are too influenced by developer money at election time. Not enough Federal protection or local and State backbone.

    1. wt. md says:

      I don’t agree with all of the references you have made, yet i will agree with a few. There are many open wilderness areas, especially in Western Maryland. I guess the next time you are driving your car to deep creek lake to climb that mountain, stop and take a walk about Allegany county. you will find some of the areas that you claim are meerly fiction.

  3. Kailash says:

    I am highly disappointed that Montgomery County, MD, has suspended its tax rebate program as of November 2011. I signed installation of solar system contract in June 2011, but now I am not sure whether I will get my rebate. My installer (Solar Solution LLC), did not mention that the tax rebates were back-logged as much as 5 years. The tax credit was an incentive for me to sign the contract. It will discourage other folks from installing alternate energy system. Not a good step as we want to be more energy efficient.

  4. Frank says:

    Seems as though MD killed some incentives by reducing the PV grant from $500 / kW up to $10K to a single $1K amount. Kills the deal for me in Anne Arundel.

  5. Jim says:

    Does anyone have any experience with a company in Gaithersburg, MD called Solar Energy World? Thanks. jmsbog@aol.com

  6. chris kerr says:

    please update your price of $10/watt as an example….closer to 5-6/watt…this price will scare people away from solar

    1. Dave Llorens says:

      Hi Chris, it’s $5 a watt on that page.

  7. Barb says:

    Signing our solar contract this week-we already have geothermal. I was disappointed that the MD grants for geothermal were gone by the time we applied. I’m hoping this won’t be an issue with solar….

  8. Susan says:

    Montgomery County has this on their web site as of August 9, 2011:
    Please note that demand for energy-efficiency and renewable energy property tax credits has outstripped the annual budget of $100,000 for energy-efficiency credits and $400,000 for renewable energy credits. The current wait time for payment of credits is at least 5 years. Applicants will be paid in the order that applications were received as long as funding is available. Please contact the Department of Finance for more information.

  9. Sam says:

    Has anyone used an installer in Howard County Maryland in 2011. I have seen the older posts and looking to see some recommendations as well as any new rebate programs. Is the $5K program for the county still alive. Any help would be great!!!

  10. Johann says:

    Any information available for St. Marys county?

  11. Janene says:

    I live in Carroll County and would like to know what is available for Carroll County residents. How does the Federal, State and Local tax incentives work and same with grant or rebate money. Will I have to pay income taxes on any of this and are my property taxes waived for going green

  12. Pat says:

    I was thinking about going this route, My house is all electric, there is no gas line even run to the house. all electric base board heat and dual central air systems. up grading to heat pumps will run about 10 grand, having a gas line run from street to house (7,000)and replacing water heater(1500),and stove(2000).
    Figure leaving eveything as is and adding solar and maybe getting a checking in the spring and fall would be a nice alternative

  13. lynn says:

    Gro solar put in our system in 2008 and did a wonderful, professional job. We couldn’t be happier. I was told back then that the $10,000 grant from MD we received was NOT tasable as personal income for the state.Does anyone know if this is for sure? Thank you

  14. Sandy says:

    I have not seen one single house in Cecil County Maryland with solar panels…any rebates in my county? My house is all electric and I am paying a fortune to Delmarva…help…

  15. Ariel Bayker says:

    ORIGINAL COST = $14,000

    FEDERAL SUBSIDY

    ($4,200.00)

    STATE SUBSIDY

    ($2,000.00)

    COUNTY SUBSIDY

    ($5,000.00)

    SREC

    ($800.00)

    COST after SUBSIDES

    $1,500!!!

  16. Mark says:

    I am looking for a solar installer. Do these guys have to have a MHIC# with the state?

  17. Tami says:

    My county does not have any property tax rebates, so the Maryland solar rebate money is very important to me. Does Maryland currently have money for the rebates (for 2010 solar installations?)

    My husband heard they ran out of money.

    Also, if any one knows about selling RECs and can explain the effects of the 2008 amendments to the law, I would very much appreciate it.

  18. KFer says:

    We’ve used solar e world. Generally positive, but takes a long time for them to complete the job. There were a lot of delays with Pepco as well, so I’m not sure who’s to blame. The sales guy was a little pushy and not so great to deal with.

  19. Theresa says:

    does anyone know anything about solar e world in Jessup MD or have you used them before… ?

    thanks Theresa

  20. matt says:

    looking for information on installers..would like to get some estimates and plan this out for 2010

    1. Dave Llorens says:

      Great. Fill this out you can get a few free quotes
      https://solarpowerrocks.com/free-solar-estimates/

  21. Neil says:

    Can anyone to direct me to a website listing current tax incentives available in the state of Maryland.

    1. We will be doing an update on Maryland shortly. But you can always see the raw updates at http://www.dsireusa.org/solar. Click on MD. They do a great job keeping up, but sometimes their explanations can be too complicated for some. We try to keep it simple but accurate….when we have time.

      Hope that helps, Neil!

  22. Neil says:

    We are designing a house to be built in Harford County, Maryland. Does anyone have any recommendations of companies they have had a positive experience with that they feel confident recommending? Also, what tax incentives are currently available in MD? Is there a website to visit to view current incentives?

  23. Matt says:

    Maryland solar incentives are no longer on hold. Visit the Maryland Energy Administration website.

  24. Ronner Bufford says:

    I’m a homeowner in PG County and now looking into the solar energy medium to see if it’s possible to receive the true benefits of solar energy in the Washington D.C. region. I’ve been told that the sun power is not that strong when it comes to using it for energy in this area of the country, could this be true? This is when compared with other states like Arizona and also the cost you incur for the performance you receive.

    Thanks for all information that’s received

    RB

    1. Ronner,

      This is true, compared to Arizona, and other Western and Southern States, Maryland does not get as much insolation (technial term for sunlight) on the panels. But that really doesn’t matter because, if Maryland solar rebates continue (they’re temporarily on hold right now, I believe) you’re going to see a good return on your investment when combined with other federal incentives. How much sunlight you get does affect your system size and payback period. The same exact house with the same exact energy needs in Arizona and Baltimore are going have different solar systems. Your system may need more panels to offset the same amount of energy, but you’ll also receive proportionally more tax incentives and rebates.

      My point is to just get two or three quotes and see the real numbers for you and your house and your energy needs. It’s free, so will only cost you a bit of time. Then you can make an accurate decision about whether solar is right for you. …or not. Either way, why guess?

      Hope that helps.

  25. Frank says:

    Ginnie
    thanks for the info
    how do we contact you?
    Fank
    paco57@hotmail.com

  26. Ginnie says:

    We live in Howard Co and just had our solar evaluation today. We were shocked at how quick the payback will be. Definitely under 5 years. After that we’ll “get back” close to $20,000 a year between the savings in electricity and the REC credits. And the company we’re using (GroSolar) also does the 1 yr 0% financing. The fed, state and county incentives are incredible. It’s a no-brainer. Feel free to contact me if you want more details.

  27. Heather says:

    I am in the process of working with Seven Seas Energy here in Annapolis and so far everything seems to be going well. I was told we are not as good as Howard county but I am hoping to have the system pay for itself within 5 years.

    By the way- what are your thoughts on selling the RECS off? Are they counter to my good intentions?

  28. Teris says:

    I install systems in Maryland however to not be spammy- I’ll leave my name out. I just wanted to write that some systems we are putting in place could have a payback in as little as 4.5 years. It depends on a number of factors but a good solar professional should be able to help you with this.

    Howard county is great. We are pricing out a small residential system and due to a number of these circumstances it is only like $1,000 out of pocket for a 4kw system. Take note however this is only AFTER all the incentives as well as REC sales.

  29. Murray says:

    With clarification Montgomery and Prince Georges Counties are on the same level with Howard County. Their Property Tax Credit laws were written in a very strange manner but recent clarification has made it clear that they will issue the same $5000 credit. We have processed a number of our clients for this credit in the past month in both counties.

    Obviously nothing wrong with Howard county as their statute was straight forward easy to read. Kudos to them.

  30. Mike says:

    I live in Howard County. We are considering an addition in the next year, and I am just starting to investigate the possibility of going solar. Anyone have any suggestions on where to start, as far as collecting information goes?

    A couple folks mentioend that Howard County is the place to be as far as incentives/rebates go. Is that correct?

  31. Brad says:

    Standard Solar in Gaithesburg did my system. They did all the paperwork for the Grants and even were able to finance the system for 1 year same as cash. That way we were able to get all the grants due to us before we even had to come out of pocket. Anyone serious about Solar Should call them.

  32. Marty Gabler says:

    Just finished a 4 KW system in Chase, Md to complement a solar water heating syatem installed last year. Work done by Power Up of Chase, MD. The lowest installed cost by far. Check out the latest State and Federal incentives and don’t forget solar renewable energy credits which you can sell to offset installed costs.

  33. Maxine says:

    Used Standard Solar in Montgomery County. Love the system. Installed in Jan. You almost forget it’s there, however, I’m addicted to seeing how much we’ve generated each day. 4kw system. 14% ROI, payback was 6.8yrs (although I think both will improve as Pepco raises rates in June again). First bill after install for 100% elec single family house – $7!!! Still new, but love it so far. Question, how do you get a breakdown of each item on Pepco bill? We dropped 500kwh from 2008 to 2009 (Jan-Apr) and paid only a few dollars less in 2009 (solar installed in Jan but Pepco took two months to install net meter, so most of this is not solar related), rate supposedly stayed the same. What are these other charges that must’ve increased from Pepco? MD PSC site not helpful. Pepco site also not helpful.

  34. Andres says:

    Howard County is the bright spot for solar in Maryland, no doubt. The property Tax credit is very significant and we install many units there because of this….

  35. Dan Hahn says:

    Wow,

    Everybody seems very interested to speak with Kathy and Jim! I’ll see if I can’t track them down and get a post up shortly.

    Cheers,
    – Dan

  36. kevin says:

    Did anyone hear back from Kathy and Jim regarding contractor? I am in the market as it were for installing a new system at my residence in Howard County.

  37. Varney Smith says:

    Kathy & Jim, I live in Howard County and would very much like to discuss solar with you. Items such as who installed your system, cost, ect.

    Thank you,

  38. Lisa says:

    Kathy and Jim,

    I live in Frederick County, fairly close to Howard County. Would love to know who you used as your contractor?

  39. Ryan says:

    Kathy and Jim,

    We live in Howard County as well. Who did you guys contact to do solar panels? $6k out of pocket seems like a bargain!

  40. Wendy says:

    Wow, Kathy and Jim,
    Seems like the incentives have really changed in Maryland. We are in Maryland and considering solar, among other things. Have to do something – our BGE bill was over $800 last month! Who did you work with?

  41. Kathy and Jim says:

    And my I add, it is exciting (especially when the net meter is running backwards). We are currently installing a hot water heater system, which is much more affordable for most people

  42. Kathy and Jim says:

    We hooked up to the grid yesterday; we will pay $6650 out of pocket: here are the numbers
    PV cost : $27, 530 (3.04kw)
    Federal Tax credit: $8,250 (30%, no max after 1/12009
    MD grant $7,600 ($2,500/kW, max 10K)
    H0ward country $5,000 (50%, max 5K)

  43. Terri says:

    I live in FL, and they have a $15,000 tax incentive! I’m thinking of relocating to MD and was appalled, when I saw their little rebate! I grew up in MD and this is so typical of that state! Greedy!

  44. Randi says:

    Once again I am appalled to call myself a Marylander. We have one of the finest states in the nation with our historical entities, waters, mountains and forests. If the government does not step up and do something about it, we might as well fill it with sand and call it Iraq.

  45. S. Rowland says:

    We have been waiting for at least 20 years for a chance to get solar energy. Just like electric vehicles it is still a dream for the average person. I’m 60 now and I’ll bet it will still be out of reach when I’m gone. Couldn’t renting the systems help those who need it?

  46. G. Hilliard says:

    This is my initial inquiry into the use of solar panel as a supplemental source of energy. Can anyone out there who has been using them give me some unbiased feed back?

  47. Will says:

    Considering that the Solar Energy Grant Program is already closed due to “too many applications,” I find your assement of Maryland as being clean energy friendly questionable. Looks like a money grab to me.

  48. Jerri says:

    Jerri
    To go off the Grid requires far more than Enron financing and wind supplementation.
    In Maryland , like all States the pockets are deep and the memory is short.

  49. Carol says:

    What has happened to H.R. 5351? Is it still in the senate finance committee?

  50. jim says:

    The energy companies don’t give me free energy why should I give them free energy? If I have used less energy at the end of the year then I produced then the energy companies gets to keep the profits. How is that an incentive?

  51. Hi Jerry,

    There are…. but typically it is just home-equity lending wearing green-colored hats… However, somethings they may be able to do is understand the value a solar energy system adds to a home, allowing you to qualify for a larger LTV ratio.

    There are definitely some new creative financing ideas popping onto the scene. Most are not for small scale residential applications, but here in California we are starting to see some leased systems.

  52. Jerry says:

    I am looking for financing for a system, any lenders deal exclusively with renewables?

  53. Big D says:

    Wow, only 60K and you’ll get your money back maybe in 15 years. That is if you happen to stay in your house for that long. Also, buyers love to see all the solar equipment hanging off the house when you go to sell. Solar power is a steal.

    1. Dan Hahn says:

      Big D,

      I understand your snap sentiments here, however please consider the following:

      1. solar equipment can compliment the aesthetics of a home (flickr some solar installations. There are really pretty ones out there that don’t look like satellites have crashed into your roofline.)
      2. financing is available which inevitably will amount to a lower monthly payment than your previous energy bill.
      3. your property value increases significantly right when the system is operational.

  54. Barry Midland says:

    I am very “close”to actual energy happenings in Maryland. Incentives are very poor, although not non-existent. There’s no way I would give MD any more than a 3 sun rating. To put MD at a 4 sun rating and California ONLY at a 4 sun rating is ridiculous.

  55. Lena Gill says:

    Why does Maryland not have solar power rebates, incentives or tax credits? Get with it.

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