Maryland solar incentives and policies

Introduction: Why Maryland is a Premier State for Solar Energy

Maryland has firmly established itself as a national leader in renewable energy, not merely through ambitious state goals—such as generating 50% of its electricity from renewable sources by 2030—but through a meticulously crafted framework of policies and incentives designed to make solar power both accessible and financially rewarding for its homeowners.1, 2 For any Maryland resident considering a move toward energy independence, this guide serves as a comprehensive roadmap to navigating this uniquely favorable landscape.

The current moment presents a particularly opportune time for Marylanders to invest in solar. The state's consumer-friendly net metering policy, which allows homeowners to receive full credit for the excess power they generate, is mature and well-established.3 Furthermore, recent legislation like the "Brighter Tomorrow Act" has introduced new, more valuable performance-based incentives for those installing systems in the coming years, enhancing the long-term financial returns.4 When combined with average electricity rates that are often higher than the national average, the financial case for generating one's own power becomes exceptionally compelling.5, 6, 7

This guide is structured to walk homeowners through the entire process in a logical, step-by-step sequence. It begins by exploring the types of solar systems available in the state, from traditional rooftop installations to innovative community solar subscriptions. It then delves into the critical financial calculations, providing a detailed breakdown of costs, incentives, and expected return on investment. Finally, it provides actionable advice for navigating Maryland's specific legal, regulatory, and utility frameworks, ensuring homeowners are well-equipped for every stage of their solar journey.

Section 1: Understanding Your Solar System Options in Maryland

The first step in any solar journey is determining the right type of system for a specific property and financial situation. Maryland's policies support a variety of models, each with distinct advantages and considerations.

1.1 Choosing Your System Type: Where Will Your Power Come From?

Rooftop-Mounted Systems

The most common choice for residential solar is a system installed directly on the roof of a home or an associated structure like a garage or shed.8 This approach utilizes existing, otherwise unused space to generate clean power.

Before a contract is signed, any reputable installer will conduct a thorough site evaluation. This assessment is critical and will examine several factors: the age and structural integrity of the roof, its material (asphalt shingle, metal, etc.), its orientation, and the amount of shading it receives throughout the day. Ideally, a roof should be south-facing with minimal tree or building shade to maximize sun exposure.2 It is important for homeowners to understand that a solar installation may interact with an existing roof warranty. For this reason, if a roof is nearing the end of its lifespan, the most cost-effective time to install solar is often in conjunction with a planned roof replacement.9

Ground-Mounted Systems

For homeowners with sufficient sunny, open land, installing solar panels on a fixed rack system in their yard is a viable and often highly productive option. Ground-mounted systems can be positioned at the perfect angle and orientation to capture maximum sunlight, unconstrained by the existing roofline.

However, the ability to install a ground-mounted system is a hyper-local issue, dictated not by state law but by the specific zoning ordinances of each county and municipality. This creates a patchwork of regulations across Maryland, making local expertise essential. For example:

• In Baltimore City, ground-mounted systems are subject to strict height limitations—no more than 10 feet in a side or rear yard and just 30 inches in a front yard—and must be screened from public view according to the city's landscape manual.10
• Carroll County has a history of scrutinizing solar installations in its agricultural zones, at times even placing temporary moratoriums on their development. The county requires detailed plot plans showing precise measurements from the proposed structure to every property line.11, 12
• Prince George's County requires that the structural plans for the foundation of any ground-mounted system be designed and formally sealed by a professional engineer licensed in the state of Maryland.13

This variation means there is no one-size-fits-all answer for ground-mounted solar. The feasibility, cost, and complexity of such a project are determined entirely by a property's address. Therefore, it is critical for homeowners considering this option to work with an installer who has demonstrated experience navigating the specific zoning and permitting requirements of their local jurisdiction.14

Community Solar: The "No-Install" Subscription Model

For the significant portion of Marylanders who rent, live in apartments, or have homes with unsuitable roofs, community solar offers an accessible path to solar savings without any on-site installation.

The model is straightforward: instead of putting panels on a personal property, a homeowner subscribes to a "share" of a large, professionally managed solar farm located within their utility's service territory. In return for a monthly subscription fee paid to the solar farm operator, the subscriber receives a credit on their regular utility bill for the electricity their share produced.11, 15 This credit is typically valued at the utility's standard retail rate, while the subscription fee is set at a fixed discount (often 10% to 15% lower). This structure guarantees a net savings on the subscriber's total electricity costs each month.9, 16, 17

This program is more than just a convenient alternative; it is a cornerstone of Maryland's energy equity policy. Both the Maryland Office of People's Counsel (OPC) and the Public Service Commission (PSC) explicitly promote community solar as a key tool for providing solar access to renters and low-to-moderate-income (LMI) households who have been traditionally excluded from the solar market.15, 18 The state's permanent community solar program, established by House Bill 908, goes a step further by creating specific incentives for solar developers to serve LMI customers, ensuring the economic benefits of renewable energy are distributed more broadly.18, 19

The community solar program is available to customers of Maryland's four major investor-owned utilities: Baltimore Gas and Electric (BGE), Pepco, Delmarva Power, and Potomac Edison.15, 20 The Maryland Energy Administration (MEA) and the PSC maintain public resources, including lists of approved projects and subscriber organizations, to help residents find and join a local solar farm.18, 20

1.2 Beyond the Panels: Complementary Technologies for a Modern Home

A solar installation can be the core of a modern, resilient, and cost-effective home energy system. By integrating complementary technologies like battery storage and electric vehicle chargers, homeowners can unlock a new level of energy independence and savings.

Battery Storage: Your Key to Energy Independence and Resilience

A home battery system stores excess solar energy for later use. This capability provides two primary benefits:

1. Backup Power: A standard grid-tied solar system is required by safety regulations to automatically shut down during a power outage to prevent sending electricity back into the grid where line workers may be operating. A battery system, however, can safely disconnect the home from the grid during an outage and use its stored solar energy to power essential appliances like refrigerators, lights, and medical equipment, providing critical resilience.21, 22
2. Enhanced Savings: A battery allows a homeowner to store the free solar energy generated during the day and use it during the evening and overnight hours. This strategy, known as "load shifting" or "self-consumption," maximizes the use of self-generated power and minimizes the amount of electricity that must be purchased from the utility, especially during peak hours when rates may be higher.21

Recognizing the value of energy storage, both the federal government and the state of Maryland offer significant incentives. The 30% federal tax credit can be applied to a battery system that is charged by solar panels. Additionally, Maryland offers its own Energy Storage Income Tax Credit to further reduce the cost.21, 23, 24, 25

Electric Vehicle (EV) Integration: Powering Your Drive with Sunshine

For homeowners who own or are considering an electric vehicle, a solar system can function as a personal, clean, and remarkably cheap "gas station." By charging an EV with solar power generated at home, a driver can dramatically reduce or even eliminate their transportation fuel costs.26, 27

The combination of solar and EV charging is particularly powerful for customers who enroll in their utility's optional Time-of-Use (TOU) electricity rates. Utilities across Maryland, including BGE, Pepco, Delmarva Power, and SMECO, offer these plans, which make electricity significantly cheaper during "off-peak" hours (typically overnight) and more expensive during "on-peak" hours (usually late afternoon and early evening).27, 28, 29 A homeowner with this setup can transform their home from a passive energy consumer into an active energy manager. During the day, the solar panels power the home and charge the EV, avoiding the need to purchase expensive on-peak grid power. Then, if additional charging is needed, the EV can be programmed to charge overnight, taking advantage of the lowest off-peak grid prices. This strategic approach unlocks a new layer of savings that extends far beyond a simple solar installation. To further encourage this synergy, Maryland offers generous rebates for the purchase and installation of home EV charging stations, which can be "stacked" with other solar project incentives.26, 29, 30

Section 2: The Financial Equation: Maryland's Solar Costs, Incentives, and ROI

Understanding the financial aspects of a solar investment is paramount. This involves a clear-eyed assessment of the upfront costs, a thorough understanding of the available incentives, and a realistic projection of long-term savings and return on investment.

2.1 The Upfront Cost of Solar in Maryland

Before accounting for any incentives, the average gross cost of a residential solar installation in Maryland typically falls between $2.75 and $3.52 per watt.31, 32 For a typical 8-kilowatt (kW) system designed to offset a significant portion of a family's electricity usage, this translates to a gross cost in the range of $23,000 to $28,000.2, 33 After applying the 30% federal tax credit alone, this net cost often drops to between $16,000 and $20,000.33, 34

The final price tag for any given project is influenced by several key variables. These include the total system size required to meet the home's energy needs, the specific brand and efficiency rating of the chosen solar panels and inverters, the complexity of the roof (e.g., steep pitch, multiple angles), and local labor costs.31, 32, 33 The following table provides a general estimate of costs and returns for various system sizes in Maryland, offering a baseline for financial planning.

Note: Costs are estimates based on average per-watt pricing in Maryland as of 2025. Payback and savings estimates are based on average utility rates, SREC values, and solar production. Actual figures will vary based on specific project details. Data compiled from sources.2, 32, 33, 34, 35, 36

2.2 A Deep Dive into Maryland's Solar Incentives: Stacking Your Savings

Maryland's robust incentive landscape allows homeowners to "stack" federal, state, and local benefits to significantly reduce the net cost of a solar installation.

The Federal Residential Clean Energy Credit (ITC): The Foundation

The single largest financial incentive available is the federal ITC. This program provides a tax credit equal to 30% of the total system cost, which includes all equipment (panels, inverters, racking), the cost of a battery storage system, and all associated installation labor.24, 34, 37

This is a non-refundable credit, meaning it can reduce a homeowner's federal tax liability to zero, but any excess credit amount is not issued as a direct cash refund. However, the tax code allows any unused portion of the credit to be rolled over and applied to subsequent tax years, ensuring the full value can eventually be claimed.37, 38, 39

A critical nuance for financial planning is how this federal credit interacts with state-level incentives. The 30% federal credit is calculated based on the net project cost after any state grants or rebates that are considered a direct price reduction have been subtracted. For instance, if a homeowner installs a $30,000 system and receives a $1,000 state grant, the basis for the federal tax credit becomes $29,000. The federal credit would therefore be $8,700 ($29,000 x 30%), not $9,000 ($30,000 x 30%).23, 39 Accurately accounting for this sequence is essential for projecting the final out-of-pocket cost.

Maryland State-Level Programs (Administered by the Maryland Energy Administration - MEA)

• Maryland Solar Access Program (MSAP): As of 2025, this is the state's primary grant program for residential solar, replacing the older, more broadly available $1,000 Residential Clean Energy Rebate Program.38, 40 The MSAP offers a substantial grant of $750 per kilowatt (kW) of installed system capacity, up to a maximum grant of $7,500.40, 41, 42 This program represents a clear policy shift toward promoting energy equity. It is specifically targeted to low- and moderate-income households, with eligibility determined by annual gross income limits that vary by household size. For example, a four-person household with an annual income below $183,375 would qualify, while those above the threshold would not.41, 43 The program operates on a first-come, first-served basis. The homeowner or their installer must first apply to the MEA to reserve funds. Crucially, the installation must be completed by an MEA-approved contractor within 180 days of the fund reservation to receive the grant.43, 44

• Maryland Energy Storage Income Tax Credit: For homeowners adding a battery to their solar system, the state offers a separate income tax credit worth 30% of the total installed cost of the battery system, up to a maximum credit of $5,000 for residential installations.23, 24, 25 This program operates with a limited annual budget that has historically been exhausted before the end of the tax year. A redesigned program is anticipated in mid-2025, making it imperative for interested homeowners to check the MEA website for the current funding status and application deadlines.23, 38, 45

Statewide Tax Exemptions

• Sales Tax Exemption: All solar energy equipment and installation services are 100% exempt from Maryland's 6% sales tax, providing an immediate upfront saving on the total project cost.34, 46, 47
• Property Tax Exemption: While a solar system is an improvement that increases a home's value, state law ensures that this added value is 100% exempt from both state and local property tax assessments. This prevents a homeowner's property tax bill from increasing as a result of their solar investment.24, 46, 47, 48

Local Property Tax Credits

In addition to the statewide property tax exemption, several of Maryland's counties offer their own one-time property tax credits to further incentivize solar adoption. These include:

• Anne Arundel County: Up to $2,500
• Baltimore County: Up to $5,000
• Harford County: Up to $2,500
• Prince George's County: Up to $5,000

Homeowners in these counties should consult their local finance department for application details and eligibility requirements.24, 46, 49

Solar Renewable Energy Certificates (SRECs): Your Ongoing Solar Income

SRECs represent a performance-based incentive that provides an ongoing revenue stream for solar system owners. For every 1,000 kilowatt-hours (kWh)—or one megawatt-hour (MWh)—of electricity a solar system generates, it produces one SREC. Maryland's Renewable Portfolio Standard (RPS) law requires electric utilities to purchase a certain number of SRECs each year to meet their clean energy mandates. This creates a market where homeowners can sell their SRECs for cash.1, 34, 50

The Maryland SREC market has seen periods of volatility, with prices fluctuating based on the supply of and demand for credits.51, 52 To create more stability and spur new solar development, the state passed the Brighter Tomorrow Act in 2024. This landmark legislation created a new, premium class of SRECs, known as "Certified SRECs," for qualifying systems installed after July 1, 2024. These new credits have a compliance value of 1.5 times that of a standard SREC, which translates directly into a higher and more predictable market price for new solar owners.4, 53 This recent policy change makes the financial case for installing a new solar system today significantly stronger than it was for systems installed in prior years. As of mid-2025, standard SRECs were trading for approximately $50 each, while the new Certified SRECs were trading for around $73.53, 54 For a typical 10 kW system generating 12 MWh of electricity annually, this could result in over $870 in additional income each year.

2.3 Calculating Your Return on Investment (ROI) and Payback Period

The payback period is the length of time it takes for the accumulated financial benefits of a solar system—namely, savings on electricity bills and income from SRECs—to equal the net, out-of-pocket installation cost.34, 55 In Maryland, the average payback period is typically estimated to be between 8 and 15 years, with an average long-term return on investment (ROI) exceeding 8%.2, 32, 34, 35 Given that solar panels are warrantied for 25 to 30 years, this leaves well over a decade of pure profit in the form of free electricity.

A homeowner's specific payback period and ROI will depend on a combination of factors: the final net cost after all incentives are applied, the electricity rates charged by their local utility (higher rates lead to faster payback), the system's actual energy production (which is influenced by weather and equipment efficiency), and the future market price of SRECs.

Section 3: Navigating the Rules: Maryland's Legal and Regulatory Landscape

Beyond the financial calculations, going solar involves navigating a series of state and local regulations. Understanding these rules, from permitting and zoning to homeowners association (HOA) rights, is essential for a smooth process.

3.1 Permitting, Zoning, and Inspections: The Local Hurdles

At a minimum, every solar installation in Maryland requires both a building permit (for the structural attachment of the panels) and an electrical permit (for the wiring and connection to the home's electrical system) from the local county or municipal government. In nearly all cases, the solar installer manages this entire process on behalf of the homeowner.12, 56

The experience of securing these permits can vary significantly across the state, creating a "tale of two systems" for homeowners depending on where they live. Some jurisdictions have made significant investments in streamlining the process. Montgomery County, for example, has implemented an expedited "eSolar" program that utilizes the national SolarAPP+ platform. For standard residential rooftop projects, this system can lead to immediate, automated permit issuance online, dramatically reducing project timelines.56, 57 This modern, efficient approach contrasts sharply with the more traditional, manual review processes found in other counties like Carroll, Prince George's, Anne Arundel, and Baltimore. In these jurisdictions, plans must be reviewed individually by county staff, a process that can take days or weeks and often requires more detailed submissions, such as plans sealed by a professional engineer.12, 13, 58, 59, 60 This regional variation in administrative efficiency is a hidden factor that can directly impact how quickly a project moves from contract to construction.

After the physical installation is complete, a final inspection by the local permitting authority is mandatory. This inspection ensures the system was built safely and in accordance with the approved plans and all applicable codes. The installer is typically required to be present for this inspection, and the approved permit and plans must be available on-site.13, 61, 62

Homeowners in certain environmentally sensitive areas face additional layers of regulation. Properties located within Maryland's Critical Area—defined as land within 1,000 feet of tidal waters—are subject to specific, stricter rules governing where solar systems can be placed. These regulations are designed to protect sensitive habitats and limit the creation of new impervious surfaces.63, 64

3.2 Homeowners Associations (HOAs) and Your Right to Solar

One of the most common concerns for homeowners in planned communities is potential opposition from their HOA. Fortunately, Maryland has a strong solar access law, codified in Real Property Code §2-119, that provides robust protection for homeowners. This law explicitly states that an HOA cannot prohibit a resident from installing a solar energy system. Furthermore, it prevents an HOA from imposing any restrictions that would significantly increase the system's cost or significantly decrease its efficiency.14, 65, 66, 67

While the law is powerful, the interpretation of "reasonable restrictions" has created a nuanced legal gray area. The plain text of the statute appears to give homeowners a clear green light. However, the key legal terms—"significant" and "unreasonable"—are open to interpretation. A 2019 Maryland court case, Blood v. Stoneridge at Fountain Green Homeowners Ass'n, Inc., provides critical real-world clarification.68 In this case, the court sided with an HOA that prohibited solar panels on a front-facing roof for purely aesthetic reasons. The court's logic was that while this restriction limited the total number of panels the homeowner could install, it did not decrease the efficiency of the panels they were permitted to install on the back of the roof, nor did it "significantly" increase the cost per panel. This case set a crucial precedent: an HOA cannot stop a homeowner from going solar, but it can enforce reasonable, consistently applied aesthetic guidelines (e.g., regarding panel location or the visibility of electrical conduit), even if it means the homeowner cannot install the largest possible system on their roof.

Based on this legal landscape, the following actions are recommended for homeowners in an HOA:

• Proactive Communication: Do not surprise the HOA. Provide them with the installer's plans and a friendly notification of the project well in advance.69
• Review Governing Documents: Read the HOA's covenants and bylaws to understand their specific rules regarding solar or other exterior modifications.
• Know Your Rights: If the HOA imposes a restriction that seems unreasonable—for example, forcing the use of a heavily shaded part of the roof that would cripple the system's production—the homeowner has the powerful protections of §2-119 to cite in their defense.

3.3 Other Key Legal Considerations

• Solar Easements: A solar easement is a voluntary, written, and legally binding agreement between two neighbors. It can prevent one property owner from building a structure or allowing trees to grow in a way that would cast a shadow on the other's solar panels.70, 71, 72 While not required by law, a solar easement is a valuable tool for protecting a long-term solar investment, particularly if a neighboring property has small trees that could grow to become a shading problem in the future.

• Selling Your Home with Solar: When a home with a solar system is sold, Maryland law requires the seller to provide the buyer with a Residential Property Disclosure/Disclaimer Statement that discloses the presence and details of the system.73, 74 Montgomery County has an additional, specific energy cost disclosure requirement that must also be met.75 A critical distinction arises depending on how the system is financed:

  • Owned System (Cash or Loan): If the system is owned outright, it is considered a property asset. Its details (age, warranty, production history) are disclosed, and it generally increases the home's resale value.31
  • Leased or PPA System: If the system is under a third-party lease or Power Purchase Agreement (PPA), it represents a long-term financial obligation, similar to a lien on the property. The contract for the remaining term must be formally transferred to the new homebuyer, who must financially qualify for and agree to assume the ongoing payments. This can sometimes be a point of friction in a real estate transaction and must be handled with care and full transparency.21

Section 4: Your Utility and the Grid: A Maryland-Specific Look

The relationship between a solar-powered home, the local utility, and the broader electrical grid is governed by a set of state-mandated rules known as net metering. Understanding this relationship is key to maximizing the financial benefits of a solar investment.

4.1 Maryland's Net Metering Explained: Getting Credit for Your Power

Net metering is the billing mechanism that allows solar homeowners to get full value for the electricity they produce. When a solar system generates more power than the home is consuming at that moment, the excess electricity flows out to the grid. The home's utility meter, which is bidirectional, measures both the electricity pulled from the grid (consumption) and the electricity sent to the grid (export). For every kilowatt-hour (kWh) of excess power exported, the homeowner receives a credit on their utility bill.3, 76, 77

In Maryland, these monthly credits are valued at the full retail rate. This creates a simple and valuable 1-for-1 exchange: a kWh exported to the grid is worth exactly the same as a kWh imported from the grid at a later time, such as at night or on a cloudy day.3, 77

At the end of the April billing cycle each year, the utility performs an annual "true-up" of the customer's account. Historically, any credits that remained unused at the end of this 12-month period were automatically cashed out at a significantly lower "excess generation" or "commodity" rate.3, 77 However, a 2023 state law (SB 143) introduced a powerful new option for homeowners. Customers can now choose to roll over their excess credits indefinitely at their full retail value, banking them for use in future months or years.78, 79, 80 This is almost always the more financially advantageous choice. It is critical for homeowners to understand that this is an opt-in feature. The default setting may still be the less valuable annual payout. After their system is operational, homeowners must proactively contact their utility to confirm they are enrolled in the indefinite rollover option.

State law allows homeowners to size their systems to produce up to 200% of their historical annual electricity usage.77, 78 While Maryland does have a statewide cap on the total amount of net-metered solar capacity, this cap was doubled to 3,000 megawatts (MW) in 2021. As of mid-2024, this cap was less than 50% full, meaning it does not pose an immediate barrier for new residential installations.3, 78, 81, 82_