Complete Guide to Maryland Solar Incentives & Tax Credits in 2025

Maryland offers some of the most attractive solar incentives in the United States. Between federal tax credits, state-level programs, and utility incentives, Maryland residents can significantly reduce the cost of going solar. This comprehensive guide breaks down every available incentive to help you maximize your solar investment.

Federal Solar Investment Tax Credit (ITC)

The federal solar Investment Tax Credit remains the most valuable solar incentive available to Maryland residents. In 2025, the ITC provides a 30% tax credit on the total cost of your solar energy system installation.

Key Details of the Federal ITC:

• 30% credit - Available through 2032 for residential and commercial solar installations
• No cap - There is no maximum limit on the credit amount
• One-time credit - Applied in the tax year when your system becomes operational
• Applies to all costs - Including equipment, labor, permits, and installation
• Carryover provision - Unused credits can roll over to future tax years

Example: For a $30,000 solar installation in Maryland, you would receive a federal tax credit of $9,000, bringing your net cost down to $21,000 before any additional state or local incentives.

Maryland Solar Renewable Energy Credits (SRECs)

Maryland's Solar Renewable Energy Credit (SREC) program is one of the most lucrative state-level solar incentives in the country. SRECs provide ongoing income from your solar energy production.

How Maryland SRECs Work:

• Your solar system generates one SREC for every 1,000 kilowatt-hours (1 MWh) of electricity produced
• Maryland utilities must purchase SRECs to meet renewable energy requirements
• SREC prices in Maryland typically range from $70 to $90 per credit in 2025
• A typical 10 kW residential system generates 10-12 SRECs annually
• SRECs provide income for 15 years after system installation

Income Potential: A 10 kW solar system producing 12 MWh annually could generate approximately $900-$1,080 per year in SREC income, totaling $13,500-$16,200 over 15 years.

Maryland Property Tax Exemption for Solar Energy Systems

Installing solar panels increases your property value, but Maryland law ensures you won't pay additional property taxes on that increased value.

Property Tax Exemption Benefits:

• Solar energy systems are 100% exempt from property tax assessments
• Applies to residential, commercial, and agricultural properties
• No expiration date - the exemption continues for the life of the system
• Studies show solar can increase home value by 4-6%, representing $20,000-$30,000 on a $500,000 home

Maryland Sales Tax Exemption

Maryland offers a full sales tax exemption on solar energy equipment purchases, immediately saving you 6% on equipment costs.

Savings Example: On $25,000 worth of solar equipment, the sales tax exemption saves you $1,500 upfront.

Local Utility Solar Incentive Programs

Several Maryland utilities offer additional incentives and rebates for solar installations:

BGE (Baltimore Gas and Electric)

• Simplified interconnection process for residential solar
• Net metering with full retail rate credit
• Periodic solar rebate programs (check availability)

Pepco Maryland

• Net metering for systems up to 2 MW
• Streamlined interconnection for qualifying systems
• Support for community solar subscriptions

Delmarva Power

• Net energy metering for excess generation
• Fast-track interconnection for systems under 25 kW

Maryland Community Solar Programs

If you cannot install solar panels on your property, Maryland's community solar program allows you to benefit from solar energy without rooftop installation.

Community Solar Benefits:

• No upfront costs or equipment installation required
• Subscribe to a portion of a local solar farm
• Receive credits on your utility bill for your share of production
• Typically save 5-15% on electricity costs
• Ideal for renters, HOA restrictions, or unsuitable roofs

Special Programs for Low-Income Households

Maryland recognizes that solar energy should be accessible to all residents, offering enhanced incentives for low-to-moderate income households.

Maryland Solar for Low-Income Communities:

• Additional grants available for qualifying households
• Community solar subscriptions with deeper discounts
• No-cost solar installations for eligible homeowners through select programs
• Priority access to solar workforce training programs

Solar Financing Options in Maryland

Beyond incentives, Maryland residents have several financing options to make solar more affordable:

Available Financing Methods:

• Cash purchase - Highest lifetime savings, immediate access to all incentives
• Solar loans - $0 down options, own the system and receive all incentives
• Property Assessed Clean Energy (PACE) - Financing repaid through property taxes
• Power Purchase Agreements (PPAs) - No upfront cost, pay only for electricity produced
• Solar leases - Fixed monthly payment, maintenance included

Total Savings Calculation: Maryland Solar Installation Example

Let's calculate the total benefit of going solar in Maryland with a typical 10 kW residential system:

How to Apply for Maryland Solar Incentives

Navigating solar incentives can be complex, but following this step-by-step process ensures you maximize your benefits:

Step-by-Step Application Process:

1. Get a professional solar assessment - Work with a qualified Maryland solar installer to design your system and calculate expected production
2. Obtain necessary permits - Your installer will handle local building permits and utility interconnection applications
3. Complete installation - Licensed contractors install your system following all Maryland electrical codes
4. System inspection and approval - Local inspectors and utility company verify proper installation
5. Register for SREC program - Enroll in Maryland's SREC tracking system to begin earning credits
6. File for federal tax credit - Claim your ITC when filing your federal tax return using IRS Form 5695
7. Document property tax exemption - File with your county assessment office to ensure solar equipment is exempt

Important Deadlines and Eligibility Requirements

Stay informed about timing and qualification criteria to ensure you receive all available incentives:

Federal ITC:

• System must be operational by December 31, 2032 for 30% credit
• Credit drops to 26% for systems operational in 2033
• Must have sufficient tax liability to claim the credit

Maryland SRECs:

• Must register within 90 days of system operation
• System must be certified by Maryland Public Service Commission
• Credits expire after 3 years if not sold

Why Maryland is Ideal for Solar Energy

Beyond financial incentives, Maryland's climate, policies, and geography make it an excellent location for solar energy:

• Abundant sunshine - Maryland receives an average of 4.5 peak sun hours daily
• Rising electricity costs - Solar locks in your energy costs for 25+ years
• Strong RPS mandate - Maryland requires 50% renewable energy by 2030, driving SREC demand
• Grid reliability - Solar provides backup power potential with battery systems
• Environmental leadership - Help Maryland meet aggressive carbon reduction goals

Environmental Impact of Going Solar in Maryland

The benefits of solar extend far beyond financial savings. A typical 10 kW residential solar system in Maryland:

• Offsets approximately 150,000 pounds of CO2 over 25 years
• Equivalent to planting 1,750 trees
• Reduces dependency on fossil fuel power plants
• Improves local air quality
• Contributes to Maryland's clean energy goals

Common Questions About Maryland Solar Incentives

Do I qualify for all incentives if I lease my solar system?

No. If you lease or have a PPA, the system owner (not you) receives the federal tax credit and SRECs. However, you still benefit from lower electricity costs and help the environment. For maximum financial benefit, ownership through cash purchase or loan is recommended.

Can I combine the federal ITC with Maryland incentives?

Yes! The federal ITC, Maryland SRECs, property tax exemption, and sales tax exemption can all be combined. These incentives stack, providing maximum savings for Maryland solar adopters.

What happens if my tax liability is less than my ITC amount?

Unused federal tax credits can roll over to future tax years. Consult with a tax professional to optimize your credit timing and ensure you receive the full benefit.

Take the Next Step: Get Your Free Maryland Solar Assessment

With Maryland's excellent solar incentives and Matrix Solar's expertise in local solar development, there's never been a better time to explore solar energy for your property.