Maryland offers generous sunshine which presents a prime opportunity for businesses to go solar. This move has been known to save business budgets in the long run and of course, great for the environment. However, going solar isn’t without its bottlenecks. For example, setting up a 25kW system would cost up to $80,000 out of pocket cost in Maryland. However, Taking advantage of the various commercial solar incentives Maryland offers is how you avoid the overbearing cost of setting up a solar system. And, we are here to tell you about some of the most important commercial solar incentives, rebates, and net metering available to you in Maryland. Com-Sol leads the way for energy sustainability and guiding your enterprise in the integration of solar panels into your energy strategies and ensuring your solar system pays for itself.

Modified Accelerated Cost-Recovery Systems (MACRS)

MARCS is a corporate depreciation incentive available for commercial customers looking to install solar within their property. This federal commercial solar incentive in Maryland offers users a tax incentive by allowing them to depreciate the cost of their solar energy systems over a shorter period of time. This means that businesses can deduct a portion of the cost of their solar system from their taxes each year, helping to reduce their tax burden and make the investment in solar more affordable. Essentially, MACRS helps businesses recoup the cost of their solar investment more quickly, making it a more attractive option for commercial users. Today, courtesy of The Tax Cuts and Jobs Act of 2017, bonus depreciation steps down by 20% each year beginning with 80% in 2023.

Business Investment Tax Credit (ITC)

The ITC is another federal commercial solar incentive Maryland businesses can take advantage of in 2024. This incentive offers a 30% tax deduction from your solar system cost. This means that if your business invests $80,000 for a 25mW solar system, it can potentially receive a tax credit of $24,000 during your next tax season. This tax deduction is set to run for equipment placed in service on or after January 1, 2023, and through December 31, 2032. The credit can be claimed when filing federal income taxes for the year the system was installed.

Renewable Electricity Production Tax Credit (PTC)

The Production Tax Credit (PTC) like the ITC offers commercial solar users a financial incentive in the form of a tax credit for electricity generated from qualified renewable energy resources. In simple terms, for every kilowatt-hour (kWh) of electricity generated by the solar energy system, the commercial user receives a tax credit. This credit helps offset the costs associated with developing and operating solar energy projects, making renewable energy more economically viable for businesses. While the program has undergone many revisions since its inception, its most recent revision is highlighted in the Inflation Act of 2022. To take advantage of the PTC, you must meet the requirements outlined by the Internal Revenue Service (IRS). Your solar panel company like Com-sol will be responsible for ensuring you meet the requirements and have the necessary documentation.

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Net Metering  in Maryland 2024

Laws in Maryland require utilities to provide Net metering and this represents a significant policy that facilitates the integration of solar energy into the state’s power grid. It is a system that benefits both solar panel owners and the broader electricity network, fostering the growth of renewable energy. As a commercial solar incentive in Maryland, Net metering is essentially a billing mechanism that credits solar energy system owners for the electricity they add to the grid. For businesses with photovoltaic (PV) systems, this means that the electricity generated by their solar panels can be used to offset their electricity consumption from the grid. 

How to enroll in net metering (billing) in Maryland

To use net metering in Maryland, you must have a system up to 5 MW (30 kW for micro-CHP);

Limited to that needed to meet 200% of annual baseline customer electricity usage and, 2 MW facilities on contiguous parcels may aggregate up to 14 MW.  While each utility has its own enrollment policy, you can check out the PSC website for state interconnection policies and requirements. You can find specific enrollment policies on each utility on their website.

Additional Local Commercial Solar Incentives Maryland: Incentives, Rebates, & Grants

Apart from the various federal incentives, there are additional local commercial solar incentives Maryland offers. These include utility rebates, sales, and property tax cuts, and more. Here are additional local incentives, rebates, and grants you can take advantage of in 2024.

Maryland Solar Renewable Energy Certificates (SRECs)

The SREC is a state financial incentive available to commercial customers nationwide. This incentive is offered by the PSC and offers solar customers a way to earn additional income from their solar energy system. Essentially, for every megawatt-hour (MWh) of electricity generated by a solar system, the owner receives one SREC. These certificates represent the environmental benefits of generating clean solar energy and can be sold on the market to utilities and other entities that need to meet renewable energy requirements. By selling SRECs, solar customers can offset the cost of their solar investment and potentially even make a profit, providing a financial incentive to invest in solar energy. As of 2024, 1 SREC is sold for $55. To apply, businesses must apply for the qualifying generating certification with the Maryland Public Service Commission.

Maryland Solar Equipment Sales, Use & Property Tax Exemption

Sales and use tax exemption is another commercial solar incentive Maryland offers commercial and industrial customers. According to state laws, Maryland offers a 100% sales and use tax exemption for renewable energy equipment as well as a property tax exemption for properties with solar panels. Equipment covered includes solar panels (photovoltaic modules), inverters, racking systems, mounting hardware, wiring, and other necessary components. Additionally, the tax exemption may extend to related equipment such as batteries for energy storage systems and monitoring devices. The exemption was further revised to include interconnection equipment used in net metering according to S.B. 621.

Maryland Commercial Clean Energy Rebate Program

The state of Maryland offers solar systems rebates up to $30,000 through the Commercial Clean Energy Rebate Program (C-CERP). This rebate runs on a first-come, first-served basis which runs till the budget is exhausted. Currently, the 2023 to 2024 session has a budget of $1 million and the application is running from August 4, 2023 – June 30, 2024, however, issuance of a rebate by MEA cannot be assured if the Program Budget has been exhausted. Check out the FY24 website for system size requirements and application process.

Howard County & Baltimore County – High Performance and Green Building Property Tax Credit

The Howard County and Baltimore County High Performance and Green Building Property Tax Credit is a local solar incentive for commercial and residential customers with properties in these counties. This incentive is designed to incentivize property owners in Howard and Baltimore County, Maryland, to invest in energy-efficient and environmentally friendly building practices. This tax credit offers eligible property owners a reduction in property taxes for buildings that meet specific green building criteria, such as achieving certain energy efficiency standards and using renewable energy sources like solar panels and other energy-efficient materials. Below are the incentive amounts to expect.

• High-Performance Buildings (except R-2, R-3 buildings): credit of 10% to 75% of taxes owed for 3 to 5 years; varies by building type and building rating
• High Performance R-2, R-3 Buildings: credit of 19% to 100% of taxes owed for 4 years; varies by building rating and declines for each year claimed (i.e., the Year 2 % is less than Year 1)
• Green Buildings (w/energy conservation devices): credit of 14% – 20% of the cost of the device for 3 years; varies by building rating