How to Save Money on Solar Panels in Maryland

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How to Save Money on Solar Panels in Maryland

Since 2015, Maryland has quadrupled its solar energy output, from 258MW to over 1000MW. This huge increase follows one of the most ambitious renewable standards in the country, with the state intending to reach 100% clean energy by 2040. With goals this large, homeowners should not wait to install solar panels in Maryland.

If you’re ready to take the first step, it’s essential to know how to lower the cost of an installation. The Old Line State offers a wide range of financial incentives and government regulations alongside an impressive federal program. Keep reading for a deep dive into Maryland’s solar benefits.

How to Save Money on Solar Panels in Maryland: Overview

Maryland is one state where the cost of solar is balanced by incredible government support. While equipment prices range around the upper echelon, the Old Line State has available financial incentives and legislative regulations to help with an installation and beyond. 

Marylanders can find assistance in a variety of forms. With the first step being the federal solar tax credit, homeowners can also find credits, rebates, and net metering opportunities. These stem from a series of mandates that require municipalities to participate in the development of renewable energy. Let’s detail each available solar benefit in Maryland.

Solar panels in Maryland
The state of Maryland intends to reach 100% clean energy by 2040.

Solar Panels in Maryland: Federal Incentive

There are many ways to find benefits for solar panels in Maryland, but the first place to start needs to be with the federal solar tax credit. This program offers 30% back on all solar purchases, including equipment, installation, and any sales tax. In the Old Line State, homeowners could save over $5,000 on a 6kW system.

There are a few prerequisites that Marylanders need to meet in order to qualify for the federal program. Above all, they have to purchase their array outright. This means leased systems won’t bring back money for homeowners. Other prerequisites include purchasing new equipment and living at the home where the system is installed.

Maryland’s Credits and Rebates

Some of the more noticeable benefits of solar panels come from financial incentives. Homeowners in Maryland have plenty of opportunities to receive money for their system, the first of which is a state funded rebate. Those that install a minimum of 1kW solar can receive $1,000. That’s as direct as it gets anywhere.

Additionally, the state has one of the best net metering policies. This regulation requires utilities to purchase excess solar energy that residential systems produce each month. In Maryland, this extra power credits toward next month’s bill and accumulates for 12 months. Any leftover credits at the end of the 12 months are paid to the customer at the standard retail rate.

On top of that, Marylanders can apply their solar panel system to produce solar renewable energy certificates (SREC). In the Old Line State, utility companies are required to purchase SRECs, at a rate of about $50 each. Each SREC represents 1MWh, with a 10kW system producing about 13 yearly. This equals $650 each year.

If you’re interested in purchasing a power storage system (such as a Tesla Powerwall), the state also provides a 30% tax credit for up to $5,000. This program is separate from the federal solar tax return, meaning you can pair them for 60% off batteries. 

Solar Panels in Maryland: Government Regulations

Taking a look at the state’s renewable portfolio standards (RPS), we understand why it offers so many incentives. These mandates lay out the state’s goals of producing renewable energy. Maryland has an aggressive objective, aiming to produce 50% of its electricity from sustainable sources. The Old Line State takes it even further, mandating that 14.5% of it must come from solar energy alone.

In accordance with Maryland’s RPS, homeowners find themselves exempt from several taxes. First, all purchases toward solar energy receive no sales tax, dropping the overall cost up-front. While this slightly lowers the amount received from the federal credit, it results in higher net savings overall. 

Additionally, Homeowners won’t incur higher property taxes with the increased value of their home. With a solar array adding tens of thousands of dollars to your property value, this exemption saves quite a bit over the course of the system’s lifetime.

Should Marylanders Lease Solar?

Some states, including Maryland, allow homeowners to lease a solar panel system when they don’t have the funds to purchase one outright. This is a considerable option in some areas where the price of solar is low. 

However, because of the higher equipment rates, homeowners in the Old Line State might not discover financial benefits enough to justify leasing. Additionally, they’ll miss out on all the benefits that the state provides, including net metering, SRECs, tax exemptions, and the federal solar credit. This option seems to make sense only for those passionate about improving their carbon footprint.

father and son playing near a sollar paneled house
Purchases toward solar energy are exempt from Maryland sales tax.

Solar Panels in Maryland: Incentive Summary

Federal Tax Incentive30% credit
Maryland Tax Credits / Rebates30% on power storage / $1000 for 1kW minimum installation
Net MeteringMonthly credits at the full retail rate, payout at the end of the 12-month period
Renewable Portfolio Standard50% renewable energy by 2030, 14.5% minimum solar
Property Tax Exemption100%
Sales Tax Exemption100%
Performance Payment ProgramSRECs, municipality based

How to Save Money on Solar Panels in Maryland: Further Reading

With great rebates, extensive net metering, and a wide variety of tax incentives, homeowners have plenty of reasons to consider solar panels in Maryland. By taking advantage of these benefits, residents of the Old Line State can save on an installation and even earn money over time. For more on how Maryland supports emerging technology, check out these articles.

How to Save Money on Solar Panels in Connecticut – If you thought Maryland offered great solar incentives, you should see Connecticut’s RPS.

Can You Recharge an EV With Solar Power? – With some of the best solar energy and power storage rates, Marylanders might consider using an array to charge an electric vehicle.

See How Much it Costs to Charge an EV in Each State – Before you buy an electric vehicle in Maryland, you might want to read this.

Largest Tech Companies in Maryland – It’s no surprise that the Old Line State is the home to many of the country’s most successful technology companies. Read on to learn more about them.

Frequently Asked Questions

Do you actually save money going solar in Maryland?

Up front, you might not think about solar energy in Maryland; the state has high rates on equipment and traditional electricity rates that could swing a decision. However, the Old Line State balances those solar panel costs with some of the best incentives in the country. Homeowners that install a system could save $20,000 or more on utilities.

How long does it take for solar panels to pay for themselves in Maryland?

In Maryland, homeowners could offset an annual electricity bill of about $1,527.36. Using that to cover the cost of the array, a 6kW system could be paid off in 10.8 years. This is slightly longer than average but not the worst.

How much do solar panels cost in Maryland?

Residents of Maryland could expect to pay an average of $2.74 per watt for solar energy. This equals around $16,440 for a 6kW system before incentives.

Can I use the federal tax incentive in Maryland?

In Maryland, homeowners can apply their new solar panel system for the federal solar tax credit. This program offers a 30% return on taxes for any purchases made toward solar energy. Some homeowners could see a return of as much as $5,000 or more.

Does Maryland have a renewable portfolio standard (RPS)?

Maryland has an interim goal of 50% renewable energy production by 2030, which gears up the state to reach 100% by 2040 with zero carbon emissions. Additionally, Maryland intends to produce no less than 14.5% of its energy from solar sources.

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