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Solar Energy in Maryland

Federal Benefits

The National Corporate Energy Investment Tax Credit provides a 30% tax incentive for solar energy systems implemented after December 31, 2019.

The Revised Accelerated Cost-Recovery System (MACRS) enables businesses to recoup investments in solar technologies by considering them as five-year property and allowing depreciation deductions under the MACRS.

The Federal Domestic Renewable Energy Tax Credit permits taxpayers to receive a 30% credit on eligible expenses for a solar energy system catering to a residential property. The system must be operational by December 31, 2019. Post-2019, incentives are reduced.

Maryland Benefits

A Maryland-Qualified Renewable Energy Credit (REC) represents the environmental benefits linked to 1 megawatt-hour (1,000 kilowatt-hours) of energy produced by an approved renewable energy system. For instance, a solar array generating 4,000 kWh in a year would grant the system owner 4 Solar RECs (SRECs). RECs are distinct from the energy produced by a renewable energy facility and possess monetary value. They can be sold or exchanged to fulfill a supplier’s yearly compliance requirements under Maryland’s Renewable Portfolio Standard (RPS).

Electricity providers are required to buy and retire SRECs to comply with the law, or face a Solar Alternative Compliance Payment for any SREC purchase deficiencies. Revenue from REC sales is commonly used to reduce the expenses of implementing renewable energy technologies. Further details on the functioning of RECs within the framework of Maryland’s RPS can be found on the Public Service Commission’s FAQ Page. The Maryland Public Service Commission (PSC) handles and assesses all applications for eligible renewable energy technologies.

Reference: https://energy.maryland.gov/pages/info/renewable/solar.aspx

Applications

Enroll your solar installation with the MD PSC only after finalizing and connecting your solar energy system. Solar installers usually assist you in managing this procedure.

Guidelines and application forms for registering your solar facility with the MD PSC can be accessed here: http://www.psc.state.md.us/electricity/solar-renewable-portfolio-standard-documents-rps/.

Upon receiving state certification from the PSC, system owners are required to register their system with the PJM Interconnection’s Generator Attribute Trading System (GATS) within a 30-day period.

Details on Solar Renewable Energy Certificates (SREC)

SRECs have a validity of three years. For PV systems under 10 kW, SREC quantities are determined using PVWatts model estimates, while PV systems above 10 kW receive SRECs based on actual production.

PJM GATS provides valuable information on selling RECs, available here, which includes:

REC owners can list their credits on the GATS Bulletin Board or view the Buyer’s Bulletin Board for specific purchase inquiries.

REC owners can employ an aggregator or broker to either buy the RECs directly or assist the REC owner in locating a buyer.

Lastly, REC owners can use an auction or exchange platform to sell their RECs.

Clean Energy Grants

The MEA provides grants for clean energy systems installed at primary residences in Maryland through its Residential Clean Energy Grant Program.

The MEA also offers grants for clean energy systems installed at businesses, local governments, and non-profits via its Commercial Clean Energy Grant Program.

Clean Energy Production Tax Credit

For systems activated before December 31, 2015, MEA’s Clean Energy Production Tax Credit grants Maryland residents a state income tax credit of 0.85 cents per kWh for electricity produced by solar PV systems (over 20 kW).

These credits can be claimed over a five-year period. For more information on the program, please visit MEA’s Production Tax Credit page.

For inquiries, contact (410) 537-4000 or 1-800-72-ENERGY or via email at DLInfo_MEA@maryland.gov.