Maryland's Rebates and Incentives for Solar Energy Systems
Like many other states, Maryland has been beefing up its renewable energy requirements over recent years. Most recently, the state upped the ante to require 1,500 MW of solar energy by 2022, coinciding with an increase in its net metering cap from 200 kW to 2 MW systems. All of this puts Maryland high on the list of states making the solar move, especially considering the state's relatively small population. Here is what Maryland has in store for homeowners looking to install solar energy systems:
TAX CREDITS
Clean Energy Production Tax Credit
- This credit allows homeowners producing their own electricity from solar thermal electric and PV systems to claim $0.0085 per kilowatt-hour (kWh) against the state income tax for five years. The maximum incentive is $2.5 million but the maximum credits handed out statewide may not exceed $25 million.
- Should your tax credit exceed your tax liability for any given year, the excess credit will be carried over to succeeding years until the credit is used up or the end of the 10th successive year. Certificates must be applied for on a first-come, first-serve basis and will not be issued after December 31, 2010.
Property Tax Exemption for Solar Energy Systems
- This property tax exemption is good for 100% of the assessed value added to the home by the addition of a solar PV system or a solar hot water system. This exemption used to include solar heating and cooling systems but that was repealed early in 2008. A special assessment now addresses such systems (see below).
Special Property Assessment for Solar Heating and Cooling Systems
- After repealing the property tax exemption for solar heating and cooling systems, the Maryland state legislature enacted a special assessment. It states that the solar heating or cooling system cannot be assessed for more than the value of a conventional system.
- In essence, this tax law states loud and clear how the state of Maryland wishes to prioritize its solar industry, giving a much higher incentive to PV and hot water systems.
REBATES
Solar Energy Grant Program
- Maryland's state rebate program is fairly straightforward and right in the mix of other leading states. Rebates for residential systems are as follows and again focus on solar PV and solar hot water systems:
- Solar PV - $2,500 per kW (max. $10,000)
- Solar Hot Water - 30% of initial cost (max. $3,000)
- In other words, PV systems up to 4 kW are rewarded nicely, while the incentive rate would drop beyond that. Funding comes from general revenue and, as is fairly common, cannot keep up with demand. Funding for 2008 has expired and a waiting list has been formed for future projects. Monies set aside for FY 2008 were $675,000 with $591,000 set aside for FY 2009. Beyond that homeowners must get in line for whatever funds become available at a later date.
NET METERING
- Maryland's net metering programs sticks out in one major way; it includes all utilities in the state with no exceptions.
- The law applies to PV systems up to 2 MW in size. Net excess generation (NEG) is carried over to the customer's next month's bill and is credited to the utility at the end of the annual billing cycle. Any renewable energy credits (RECs) are retained by the system's owner.
- Net metering laws will remain in effect until the statewide capacity reaches 1,500 MW (which is a huge jump considering the previous law required only 34.7 MW!). Utilities are responsible for installing bi-directional meters for net metered systems.
Certainly Maryland is pushing ahead with its ambitious RPS, despite its very focused attention on PV and water heat. One can only assume that more generous funding will be allocated for the state rebate program in the future in order to meet the state's clean energy goals (half those of California but with only one-sixth of the population). I suppose it should be no wonder that Maryland is coming around, what with BP Solar and Sun Edison headquartered between its borders.
Note that several counties in Maryland have solar incentives also. See the DSIRE website.
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