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2019 Policy Grade

A

Avg. Yearly Savings

$1,712

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

2019 Policy Grade

A

Avg. Savings/year

$1,712

Your 2019 guide to getting solar panels for your home in Maryland

This page is a complete guide to the complicated and sometimes confusing process of installing solar panels on your Maryland home. Since there's a lot 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!

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** What's new for 2019 **

Maryland solar incentives can save the average homeowner nearly $2,000 in the first year, and the Federal Government will also give you a tax credit equal to 30% of what you pay for solar. All those incentives add up to substantial savings for homeowners who want to do the right thing for the environment and their pocketbooks.

Thos savings only increase over time as your solar panels make electricity for the next 25 years or more. Every time the utility company raises rates, you'll smile knowing you've locked in free solar electricity for the long haul. If you pay more than $100 in monthly electric bills, solar will help you eliminate those bills now and in the future!

The state's solar success is driven by its Renewable Portfolio Standard (RPS), which ensures a commitment to growing the share of electricity generated from renewable sources.

And there's some good news on this front: The Clean Energy Jobs Act is the new law of the land in Maryland, and it calls for 50% of ell electricity generated here to come from renewable sources by 2030. There's even some indication that Governor Larry Hogan supports an expanded RPS calling for 100% renewable energy by 2040, which might get a hearing in the next legislative session.

With an ongoing commitment like that, you can be sure that Maryland will support your decision to go solar for the long haul!

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.

The Solar Strategy section is focused on the 3 ways of paying for solar in Maryland, so you can decide which is best for you. We've created a tool that asks you a few questions and recommends whether you should pursue a solar lease, loan, or outright purchase. Then, we provide detailed analysis of how each works.

The Policy Information section contains all our latest research on the rules set by lawmakers and the Public Utilities Commission, which determine how easy it is to go solar in Maryland. These policies and rules govern everything from renewable energy mandates to interconnection, and have a huge effect on the viability of solar.

Finally, the Solar Incentives section includes information about money-back rebates and grants, tax credits, and tax exemptions for going solar in Maryland.

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:

How should you pay for solar?

Use our decision tool to find out!

How to pay for solar panels 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!

How much can you save with solar?

Find out

Option 1: Paying cash for solar

The cash option 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 $41,000 over 25 years if you pay up front. But it requires a significant up-front investment.

in the mid 2010s, banks and other financing companies realized what a good investment home solar can be, and they started providing solar loans. If you have good credit or equity in your home, that's likely your best option. 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 $29,380 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 $41,000 in income. The reason this works is that electricity in Maryland is EXPENSIVE. Solar offsets enough of it to save you about $1,700 in year 1, and it just goes up from there. As the electric company raises rates, you save more and more, and more...

On top of the electric bill savings, your home solar installation earns you extra credit for every megawatt-hour (MWh) of electricity it generates. The credits are called SRECs, and are worth about $20 each. An average-sized system earns you about 12 SRECs per year for the first 5 years of operation. That translates into about $240 this year and a handsome bonus over time. Read more about Maryland's SREC market below.

Here’s how the numbers pencil out when you pay up front for an average-sized rooftop solar system in Maryland:

  • Installing a typical 9.8-kW solar system should start at about $29,380 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 $29,380, for a tax credit of $8,814. Your total investment is now down to just $20,566.
  • After the tax credit we subtract your first year’s energy savings, which we estimate to be $1,712. That reduces your cost after the first year to only $18,854.
  • That isn't the end of the savings train! Maryland's SREC Market will save you $245 this year, bringing the final year 1 cost to just $18,609. That's nearly 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 $22,000, too (which just coincidentally equals the cost of the system after incentives)!
  • 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 204 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.

Option 2: Using a loan to pay for solar

Don't have $30,000 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 $29,380, with a fixed rate of 5% 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 9.8-kW solar system should start at about $29,380 after Maryland's solar rebate. That's how big your loan will need to be to cover it.
  • The electricity you'll save in the first year of operation would have cost $1,712, but your annual loan payments will be $2,697, meaning you would spend $985 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 $8,814.
  • The final bit of savings comes from Maryland's SREC program (discussed below). SRECs will mean an additional $245 in income from solar this year. Altogether, you'll come out $8,074 ahead after year 1. The cost of your loan will only never wipe away that windfall, and aftert the loan's paid off, your net savings will skyrocket.
  • 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 $29,703 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. 204 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.

Option 3: Buying the electricity, not the panels with a Power Purchase Agreement (PPA)

In a Power Purchase Agreement, your solar company installs panels on your home, but you don't own them. You agree to buy the electricity from the panels at a set rate that's lower than your existing electric rate.

PPAs can be a smart choice if you have decent credit, low income, and/or are newly retired. And even though the savings are smaller than if you purchased a solar system, you can still avoid thousands in payments to the utility company. Though, if you can't commit to a 20 or 25-year contract, it can be a hassle to transfer the PPA when you sell your home.

Here’s how the numbers pencil out if you sign up for a solar PPA in Maryland:

  • The agreement: You sign a contract to purchase solar electricity at a set rate. These rates vary, but we’ll use $.12/kWh as an example.
  • How it works: The solar electricity replaces most of your utility bill, but you now get 2 bills each month; 1 from the utility company for a small amount, and 1 from the solar company. In our example, your previous utility bill would have been around $153 per month. The new bill would be for about $10 per month, and the new solar bill would be for about $123. In total, that represents an average savings of $20 per month, or $240 per year.
  • Lifetime savings: That might not seem like a lot, but it adds up. And the savings get larger over time, because the PPA cost increases by only 3% per year, whereas electricity from the utility has gone up by an average of 3.5% per year for the past few decades. Over a 20-year PPA contract, you’d save almost $9,900. That’s with no money down and no messing with tax credits!
  • Environmental savings: The CO2 savings from those panels is like planting 204 trees per year, 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 PPA, our network of experts are on call to assist you. Simply sign up for personalized assistance on our special solar deals page.

How much can you save with solar?

Find out

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 Georgia—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:

Maryland's Renewable Portfolio Standard

50% by 2030

Grade: A

Maryland's Renewable Portfolio Standard grade

A Renewables Portfolio Standard (RPS) is a law requriring utilities in the state to source a certain percentage of their electricity from clean, renewable sources like solar panels and wind turbines. if those companies don't meet the goals, they have to pay fines to the state. This gives them an incentive to find people who want to add solar panels to their homes and be a part of meeting those goals.

Maryland has a strong RPS that became law in 2019, mandating that 50% of all energy must come from renewable sources by 2030. Maryland’s target of 50% is a very strong RPS overall, especially when compared to states that have yet to jump on the RPS bandwagon.

Perhaps more impressive is the fact that the state legislature passed this bill all by themselves in 2019, with the bill becoming law automatically, 30 days after the legislative session, because Governor Larry Hogan wouldn't sign it. This marks the second time Maryland's legislature has outpaced the Governor, having overridden a veto of 25% RPS bill in 2017.

You go, Maryland lawmakers!

Learn more about Renewable Portfolio Standards

Maryland's RPS solar carve out

14.5% by 2028

Grade: A

Maryland's Solar Carve-out grade

As part of the 2019 RPS law, Maryland lawmakers extended existing goals for the amount of total energy that must come specifically from solar power. The new goals put Maryland near the top of the pack when it comes to solar-specific requirments. Only Massachusetts is calling for more solar on a percentage basis.

The solar carve-out here basically guarantees Maryland will support solar power long into the future, which is a confort to anyone who is looking to put panels on their roof. And the carve-out means something very important for solar owners from a financial perspective, because it is what determines the value of Solar Renewable Energy Credits, one of the best solar incentives available.

Learn more about Solar Carve-outs

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 13.6 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.

Find out why electricity prices matter

Maryland Net Metering

Statewide

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.

Learn more about net metering

Maryland Interconnection Rules

Statewide

Grade: 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.

Learn more about solar interconnection rules

Solar Incentives in Maryland

Next to high electricity prices and net metering, solar incentives have traditionally been the most important factor for whether home solar power makes financial sense in a state. In the past, some states with otherwise lousy policy had tremendous incentives that drove down the up-front cost of going solar so much that homeowners could save oodles of money even without net metering or a good RPS.

These days, the big incentive most people can get is the Federal Solar Tax Credit that earns you 30% of your total system costs back after just 1 year. State incentives play less of a role than in the past, but some really good ones are still out there, ready to help homeowners go solar and save money before you know it.

Let's see how Maryland measures up:

The availability of state solar incentives for residential solar systems was sourced from the Database of State Incentives for Renewables and Efficiency, utility company websites, and the state public utility commission.

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.

Learn more about solar rebates

Maryland Solar 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 nearly 3 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.

Learn more about state solar tax credits

Maryland Solar Performance Payments

~$245 per year, varies

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. The average 9.8-kW system will generate about 12 SRECs per year.

Utility companies buy SRECs from solar owners 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 high fees to the state called Solar Alternative Compliance Payments (SACPs). That is what gives SRECs their value.

Maryland's Solar Alternative Compliance Payments

Maryland's SACP as of 2019 is $100, but SRECs aren't worth quite that much. The draw of past high SREC prices led to a lot of solar installed in a short period of time, resulting in an oversupply of SRECs on the Maryland market, and prices dropped precipitously until rebounding in April, 2019.

Recent Maryland SREC prices are around $50. Stay tuned to SRECTrade for more info.

For reference, Maryland has built in a step-down reduction in the cost of SACPs, which will ultimately setltle at just $22 after 2029. But that's not a bad thing, with ongoing payments to solar owners locked in to the new RPS law.

Here is Maryland's SACP schedule starting in 2019:

Year% Solar RequirementSACP
20195.50%$100
20206.00%$100
20217.50%$80
20228.50%$60
20239.50%$45
202410.50%$40
202511.50%$35
202612.50%$30
202713.50%$25
202814.50%$25
202914.50%$23
2030 and after14.50%$22

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 solar installer in Maryland today!

Learn more about SRECs

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.

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!

Learn more about tax exemptions for solar

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

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Vicky
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Vicky

My condo complex in Montgomery County, Md. would like to chat with other condo communities that have set up solar for outdoor lighting and other projects.

Anonymous
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Anonymous

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?

Anonymous
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Anonymous

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.

wt. md
Guest
wt. md

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.

Kailash
Guest
Kailash

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.

Frank
Guest
Frank

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.

Jim
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Jim

Does anyone have any experience with a company in Gaithersburg, MD called Solar Energy World? Thanks. [email protected]

chris kerr
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chris kerr

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

Barb
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Barb

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….

Susan
Guest
Susan

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.

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