2024 Maryland Solar Incentives, Tax Credits, Rebates, & Exemptions

Last updated: December2024

There are a lot of great solar incentives in Maryland, including tax breaks, a rebate, and payments for ongoing incentives called Solar Renewable Energy Credits (SRECs). 

Combined with the federal solar tax credit, the average Maryland homeowner can save $10,500 on the cost of a home solar installation or an estimated $20,5000 on a home solar installation with a battery. That's over half the cost to install!

Usually, with solar incentives like these, the time to go solar is NOW, and that's generally true in Maryland. However, if you fall in the bracket of people with incomes at or below 150% of the area median income, you may want to wait until 2025 to go solar because that's when the new Maryland Solar Access Program (MSAP) will be live.

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Overview of Maryland solar incentives and rebates

Incentive	Estimated average savings	Eligibility	About
Federal solar tax credit	$6,900	All tax-paying U.S.  citizens	Tax credit equal to 30% of installation costs, applied to federal income taxes
Residential Clean Energy Grant Program	$1,000	Any Maryland homeowner who pays for the installation of at least 1 kW of solar panels
Solar Renewable Energy Certificates (SRECs)	$3,600	Any owner of a solar photovoltaic or solar water heating system	SRECs have value determined by state law and can be sold by a solar owner for profit.
Solar property tax exemption and credits	Value varies	All Maryland property owners	Maryland law provides a 100% exemption to property tax for solar energy property or residential wind equipment
Solar sales tax exemption	$1,380	All Maryland taxpayers who pay for a solar installation	By law, the cost of a solar installation is exempt from Maryland’s 6% sales tax.
Maryland Energy Storage Income Tax Credit	$5,000 off energy storage	Homeowners who pay to have lithium-based energy storage equipment installed	Incentive equal to 30% of the costs of installation, up to $5,000

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Calculate how much you can save with Maryland incentives

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Federal solar tax credit

There is no specific Maryland solar tax credit, but the federal government offers the federal solar tax credit (formerly known as the Federal Solar Investment Tax Credit or ITC). The Clean Energy credit applies to all U.S. residents who own a home on which they install solar panels. 

The credit equals 30% of the cost to install solar and can only be used by homeowners with the tax liability to claim it. 

The average solar panel system in Maryland will earn a tax credit of about $6,900. But, the value of the solar tax credit can depend largely on system size, which you can see in the following table:

System size	Estimated cost	Tax credit
6 kW	$18,000	$5,400
8 kW (Maryland average)	$23,000	$6,900
10 kW	$28,500	$8,550
15 kW	$40,500	$12,150

Taxpayers can claim the credit in the year after their solar installation is complete. The credit applies to all solar equipment or home battery storage costs but won’t include expenses like structural improvements that aren’t directly associated with generating solar energy.  

Note: Lending companies often require paying the value of the solar tax credit toward a solar loan by 18 months to keep monthly payments low.

Residential Clean Energy Grant Program

Maryland’s clean energy grant program is quite simple: anyone in the state who gets at least 1 kW of solar panels installed qualifies for a $1,000 grant from the state of Maryland. Unfortunately, this program will end after November 30th, 2024. It will be replaced in early 2025 by the state’s new Solar Access Program.

Solar Renewable Energy Certificates (SRECs)

Solar Renewable Energy Certificates (SRECs) are basically just proof that your solar panels generated a certain amount of electricity. 

You register your solar energy system with the state of Maryland, and then keep track of your system’s energy production over time using a revenue-grade meter. Each time your system has generated one megawatt-hour of energy, you earn an SREC, which can be sold to Maryland’s utility companies for money on an SREC market. 

The reason SRECs have value is because Maryland utilities are required to produce or acquire a certain percentage of the electricity they serve from solar power, under the state’s renewable portfolio standard (RPS). If they don’t meet these requirements, they are assessed a fine (called an Solar Alternative Compliance Payment, or SACP for short). 

When the utility companies buy an SREC, they can claim credit for that MWh, so the value of the SREC is closely related to the cost of the SACP.  

The SACP for 2025 is $55, but it will decrease a bit each year through 2030, where it will settle at $22.50. A solar installation owner is credited with SRECs for all the energy their system produces for the first 15 years. 

Based on the schedule of declining SACPs and annual energy production from solar panels in Maryland, we estimate a total value of around $3,600 from the SREC program for an 8-kW Maryland solar installation.

Solar property tax exemption and credits

When you get solar panels installed on your property, your home value goes up. Thankfully, Maryland saw fit to exempt that additional value from property taxes in its state laws. 

Our research shows that a solar installation can add 6.8% to the value of a home. This amount will vary based on your individual home, neighborhood, and solar installation. 

In addition to the property tax exemption, certain counties within Maryland offer one-time property tax credits. If you live in Anne Arundel County, Baltimore County, Hartford County, or Prince George’s County, contact your local tax authority for more information.

Solar sales tax exemption

Maryland has a state sales tax rate of 6% on most purchased goods. Thankfully, the state exempts solar energy equipment from this sales and use tax.

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Maryland net metering and solar buyback plans

Net metering is a utility billing practice under which solar owners earn credit for any excess electricity their solar panels generate and send to the grid. Each kWh of energy is counted as a credit on the customer’s electric bill, and the utility applies the credits toward energy the customer pulls from the grid when the sun isn't shining. 

Maryland has done a great job at protecting net metering for utility customers. Where other states have made big changes to reduce the credits solar owners can earn from excess energy generation, the Old Line state has, well, held the line.

In fact, net metering credits in Maryland can be rolled over indefinitely, which means you can overproduce solar energy in the early years of owning a system, and draw on those credits in later years.

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Solar battery incentives in Maryland

As home solar batteries become more popular, many states have begun offering solar battery incentives. Maryland is no exception, offering an Energy Storage Income Tax Credit equal to 30% of the costs of installation, up to $5,000. 

For a typical solar battery like the Tesla Powerwall 3, which costs approximately $15,600 installed from Tesla, the tax credit will likely be maxed out at $4,680.

The Energy Storage Tax Credit is subject to available funding, with a limit of $750,000 per year. Funding is available on a first-come, first-served basis and is expected to run out before the end of the year, so check the program website for the latest information.

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Maryland installation costs

The average cost of solar panels in Maryland is $23,000 before incentives for an 8-kilowatt solar installation. Once you factor in all of Maryland’s solar incentives, that cost can drop to as low as $11,800 — nearly 49% lower than the pre-incentive costs.

Average pre-incentive cost: $23,000

Residential Clean Energy Grant Program: $1,000

Cost after grant: $23,000 - $1,000 = $22,000

Federal tax credit: $22,000 x 30% = $6,600

Maryland SREC sales: $3,600

Total savings: $1,000 + $6,600 + $3,600 = $11,200

Effective system cost: $23,000 - $11,200 = $11,800

But what if you get a battery? Remember the Tesla Powerwall 3 costs about $15,600 on average and earns you a 30% tax credit ($4,680). The total solar plus storage system would cost $38,600 before incentives, which can offset the cost by a lot. Here’s how the calculations work:

Average pre-incentive cost with battery: $38,600

Residential Clean Energy Grant Program: $1,000

Cost after grant: $37,600

Federal tax credit: $37,600 x 30% = $11,280

Maryland energy storage tax credit: $4,680

Maryland SREC sales: $3,600

Effective system cost: $37,600 - $11,280 - $4,680 - $3,600 = $18,040

That’s over a 53% reduction in the cost of the system.

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Do incentives make solar worthwhile in Maryland?

The incentives that are currently available to Maryland residents absolutely make solar worthwhile. If electricity prices continue to rise at historical rates, we estimate that a Maryland solar installation will pay back its initial cost in just under 10 years. 

Looking ahead to 2025, the new Maryland Solar Access Program will accelerate that payback time, at least for people who qualify under the 150% AMI income cap. Payback time should decrease to under 8 years for installations completed in 2025.

It can take several months to go from comparing solar estimates from installation companies to getting the final permission to connect the system to the grid. The first step in your solar journey is to find the best solar companies in your area and compare multiple quotes for solar panels.

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Calculate how much you can save with Maryland incentives

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Maryland solar incentives FAQs