Solar/Renewable Energy Programs in Maryland 2018/2019!

Note- the 2017 Tax Cuts deleted the Clean Renewable Energy Bonds (CREBs) No new Bonds will be issued, this has affected multiple Energy programs

Commercial

Residential

Commercial - Loans

  1. USDA - Rural Energy for America Program (REAP) Loan Guarantees Grant for 25% of a proposed project's cost, and a loan guarantee may not exceed $25 million

  2. U.S. Department of Energy - Loan Guarantee Program
    Loan guarantees are provided in response to open solicitations. The application is a two part process; applicants that meet the specified requirements laid out in Part I receive an invitation to submit a Part II application. The updated supplemental guidance for Renewable Energy Projects and Energy Efficiency Projects includes an application solicitation schedule, with final Part I and Part II application due dates to November 30, 2016 (extended in a Fifth Supplement released June 2016). Up to $3 billion is available in loan guarantees for projects in renewable energy, efficient end-use, and efficient generation, transmission, and distribution technologies (plus an additional amount that may be imputed based on the credit subsidy cost of the loan guarantee authority). See the program website for more details on eligibility and the application process.

  3. FY19 Jane E. Lawton Conservation Loan Program- for Nonprofit Organizations, Local Government, Maryland Businesses - The Program provides eligible borrowers with loans that typically range from $50,000 - $500,000 to identify and install energy conservation measures and improvements in their facilities. Borrowers can then use the cost savings generated by added improvements as the primary source of revenue for repaying the loans.

    MEA must reserve $170,000 of the $850,000 available for nonprofit organizations until November 30, 2018. Applications from local governments and businesses are considered together with energy savings as the key differentiating feature. After November 30, all available funds will then be pooled and loaned to all eligible organizations on a first come, first-served basis until June 30, 2019 or until funding is exhausted, whichever comes first.

    Eligible projects must have a simple payback of 10 or fewer years. Projects with paybacks exceeding 10 years are not eligible for funding. All costs necessary for implementing an energy conservation project can be considered for funding, including the technical assessment, reasonable fees for special services, plans and specifications, and the actual costs of the energy conservation measures and improvements.

    The interest rate for all Lawton Loans made during Fiscal Year 2019 (July 1, 2018 - June 30, 2019) will be 2.0%, compounded annually.

    Applicant organizations must adhere to all Lawton Loan Program regulations, found in the Code of Maryland Regulations, Title 14, Subtitle 26, Chapter 01 (COMAR 14.26.01).

Commercial - Grants

  1. Commercial Clean Energy Grant Program - PV - Local Government
    • Maximum Grant is $6000
    • 100kw and less is $60 per KW
    • 100kw and greater is $30 per KW

Commercial - IRS Tax Incentives

  1. Modified Accelerated Cost-Recovery System (MACRS)
    The Tax Cuts and Jobs Act of 2017 increased bonus depreciation to 100% for qualified property acquired and placed in service after September 27, 2017 and before January 1, 2023. 5 year depreciation deductions for Solar & Fuel cells.

  2. Business Energy Investment Tax Credit (ITC)
    • 30% for systems placed in service by 12/31/2019
    • 26% for systems placed in service after 12/31/2019 and before 01/01/2021
    • 22% for systems placed in service after 12/31/2020 and before 01/01/2022
    • There is no maximum credit for systems placed in service after 2008.

  3. Clean Energy Production Tax Credit (Corporate) - $0.0085/kWh
    An individual or corporation that applies for and receives certification from the Maryland Energy Administration (MEA) may claim a credit equal to 0.85 cents per kilowatt-hour ($0.0085/kWh) against the state income tax, for a five-year period, for electricity generated by eligible resources. As a result of H.B. 494, effective July 1, 2010 the MEA is no longer permitted to issue initial credit certificates for amounts of less than $1,000. At the general renewable energy credit rate of $0.0085/kWh, a facility would need to produce 23,530 kWh annually to meet this minimum. The electricity generated must be sold to an unrelated person during the taxable year. The MEA indicates that a net metering or interconnection agreement is sufficient documentation for this requirement. This Credit expires 12/31/2018.

Residential - Loans


  1. FHA PowerSaver Loan Program - Energy Upgrade $7500, 2nd Mortage - $25k
    Federal Housing Administration (FHA) through its PowerSaver loan program offers three financing options for homeowners to make energy efficiency and renewable energy upgrades in their residences. For all three PowerSaver products, borrowers must select from a list of approved PowerSaver lenders. Please check the HUD website to find a list of participating FHA approved lender for the program. PowerSaver products are not currently offered in all states, so all potential applicants are encouraged to first check the program website to ensure product availability in their location.

    Eligibility - Homeowners must have following requirements to be eligible for the program:
    • Minimum credit score of 660
    • Maximum total debt to income ratio of 45% (monthly income divided by monthly debt payments)
    • Maximum combined loan-to-value: 100%
    • Property type: One-unit, owner-occupied, principal residence properties only
    • Appraisal requirement: exterior-only inspection appraisal or other FHA method of valuation
    • PowerSaver insures lien position in the first place, or second place, and also insures loans without lien, as long as the loan amount is less than $7,500.

  2. Unsecured solar loans
    2016 saw the rise of the independent solar company and a fall in the percentage of the residential solar market dominated by zero-down PPA and Solar Lease products. The reason for this is that most small independent solar companies now have access to competitive financing offered through finance platforms like Dividend Solar, Greensky, and Mosaic.

    Although we still recommend that consumers organize their own finance (secured against their home) to get a better deal on solar, the wide availability of these loans has proven popular and helped the smaller solar companies take market share from the giants like SolarCity, Vivint and Sunrun. These loans often advertise low rates but what gets hidden from consumers is that there is an origination fee of between 10-15% that is built into the solar system price when you ask for a loan through your solar company. This is why average costs of cash purchased systems are usually $0.40 per watt cheaper than for financed systems.

Residential - Grants

  1. Residential Clean Energy Grant Program- State
    • PV: $1,000/project (flat per installation/household incentive) up to 20 kW

Residential - Rebates

  1. Solar Renewable Energy Certificates (SRECs)
    Incentive amount varies based on market conditions; as of March 2015 Maryland-sourced SRECs traded at average at $160/MWh ($0.16/kWh) as provided in SREC Trade.
    Incentive amount varies based on market conditions; as of March 2015 Maryland-sourced SRECs traded at average at $160/MWh ($0.16/kWh) as provided in SREC Trade.

    Under Maryland law, an SREC represents the generation attributes of 1 megawatt-hour (MWh) of electricity generation (or equivalent) from a qualifying solar facility. Electricity suppliers must purchase and retire solar renewable energy credits (SRECs) in order to meet their compliance obligations under the law, or pay a Solar Alternative Compliance Payment (SACP) for any shortfalls in SREC purchases. The SACP operates as a theoretical ceiling on the price that a supplier would pay for SRECs to fulfill obligations under the Maryland RPS.* In Maryland the SACP is set at $400 per MWh for 2009 - 2014, but will decline in future years, ultimately reaching $50 per MWh in 2023 and thereafter. Under this system, SRECs represent a significant source of revenue for owners of qualifying solar facilities, with a value determined by demand in the trading market.

    All net-metered customers and renewable on-site generators in Maryland own all RECs or SRECs produced by their systems unless or until a customer or generator chooses to sell or otherwise transfer the RECs or SRECs to another party. A Maryland SREC has a three-year lifetime during which it is valid for compliance (i.e., the calendar year during which it was generated plus the next two calendar years). Once a facility qualifies as an eligible solar generator, it is eligible to produce SRECs for as long as it remains in service as an eligible generator. Residential solar water heating systems are not permitted to generate more than 5 SRECs annually.

    Program Description

    In order to begin producing SRECs for the Maryland RPS*, a solar generator must apply for certification as a qualifying generator from the Maryland Public Service Commission (PSC). In general, a PV facility must be connected to the distribution grid serving Maryland** in order to qualify as a source of SRECs for meeting an electricity supplier's compliance obligation under the state RPS. However, through 2011 SRECs from solar facilities not connected to the distribution grid serving Maryland were eligible to be counted under the state RPS to the extent that SREC offers from Maryland facilities were not sufficient to meet the standard. In February 2012 the PSC determined that sufficient Maryland-sourced solar resources existed during 2011 to meet the standard, rendering out-of-state resources ineligible. Solar water heating facilities must be commissioned on or after June 1, 2011; not be used for the sole purpose of heating a pool or a hot tub; and use SRCC OG-100 certified equipment. Residential solar hot water systems are limited to producing maximum of 5 SRECs in a given year. SRECs produced by solar thermal systems are calculated by the conversion rate 1 SREC = 3,412 BTU.

    After a facility is certified by the PSC, it must establish SREC account with the PJM-EIS Generation Attribute Tracking System (GATS). In general, the system owner or their representative must enter energy generation data from a revenue-quality meter into the PJM-GATS system at least once annually in order to be issued an SREC. Owners of PV systems of 10 kilowatts (kW) or smaller (referred to as Level 1 solar facilities) that are used for on-site generation may use an engineering estimate based on an energy production schedule established by the PSC in lieu of providing actual generation data. Owners of systems that are not certified as Level 1 solar facilities are also required to submit an on-site generation form to the PSC within one week of entering their generation data into the PJM-GATs system. Non-residential solar water heating systems must be equipped with a meter that meets the standards of the International Organization of Legal Metrology (IOLM). Residential solar water heating systems may be equipped with an IOLM-compliant meter, or may use an SRCC OG-300 thermal performance rating for the purposes of SREC creation.

    In a characteristic unique to Maryland, solar generators in Maryland are required to offer SRECs for sale to Maryland electricity suppliers prior to offering them for sale to any other buyer. In order to help generators comply with this requirement, the PSC operates a web site where generators can post SREC offers. Currently, SREC purchase contracts directly between a solar generator and an energy supplier must have a term of at least 15 years. However, as a result of H.B. 258, beginning October 1, 2012 the minimum term requirements will not apply to Level 1 facilities. For Level 1 solar facilities only, the purchase must take the form of a single, up-front payment arrived at by calculating the net present value of SRECs over the life of the contract using a standard SREC value of 80% of the SACP and federal secondary credit interest rate in effect as of January 1 of that year as the discount rate. If after 10 days the SREC(s) have not been sold to a Maryland electricity supplier, the facility owner is free to sell their SREC(s) to any buyer.

    The PJM-GATS Public Reports web site contains a variety useful pieces of information, including monthly weighted average SREC trading prices for Maryland and other states. Note that the SREC trading prices reported here for each state refer to facilities located in that state. In some cases, the SRECs may have been sold into the SREC market in another state rather than the state of origin.

Residential - IRS Tax Incentives

  1. Residential Energy Conservation Subsidy Exclusion (Corporate & Personal)
    • Installed PV on a Residential, Multifamily Residential is 100% Tax Deductible

  2. Residential Renewable Energy Tax Credit- for PV and Battery
    • 30% for systems placed in service by 12/31/2019
    • 26% for systems placed in service after 12/31/2019 and before 01/01/2021
    • 22% for systems placed in service after 12/31/2020 and before 01/01/2022
    • There is no maximum credit for systems placed in service after 2008.
    • Systems must be placed in service on or after January 1, 2006, and on or before December 31, 2021.
    • PV only - The home served by the system does not have to be the taxpayer's principal residence.
    • For Fuel Cell /Battery Systems, they must have a nameplate capacity of at least 0.5 kW of electricity using an electrochemical process and an electricity-only generation efficiency greater than 30%.

  3. Clean Energy Production Tax Credit (Personal) - $0.0085/kWh
    An individual or corporation that applies for and receives certification from the Maryland Energy Administration (MEA) may claim a credit equal to 0.85 cents per kilowatt-hour ($0.0085/kWh) against the state income tax, for a five-year period, for electricity generated by eligible resources. As a result of H.B. 494, effective July 1, 2010 the MEA is no longer permitted to issue initial credit certificates for amounts of less than $1,000. At the general renewable energy credit rate of $0.0085/kWh, a facility would need to produce 23,530 kWh annually to meet this minimum. The electricity generated must be sold to an unrelated person during the taxable year. The MEA indicates that a net metering or interconnection agreement is sufficient documentation for this requirement. This Credit expires 12/31/2018.

  4. Local Option - Tax Credits for Renewables and Energy Conservation Devices
    A. Anne Arundel County - Maximum Incentive: $2500
    • Anne Arundel County offers a one-time credit from county property taxes on residential dwellings that use solar energy equipment for heating and cooling, water heating, and electricity generation. Photovoltaic (PV) systems were initially not eligible for the tax credit, but were added by legislation enacted in January 2009 (County Bill 81-08). Devices must be installed on or after January 1, 2007 in order to be eligible for the tax credit. Expenditures for solar pool heating are not eligible for Anne Arundel County's solar energy tax credit.

      The one-time tax credit is calculated as the lesser of the following: 50% of the cost of materials and installation of the solar energy equipment, less the amount of federal and state grants and state solar energy tax credits; or $2, 500

    B. Harford County - Maximum Incentive: $2500
    • Harford County offers a tax credit for real property taxes imposed on residential or nonresidential buildings or other structures that use solar or geothermal devices for heating, cooling, or generating electricity for on-site consumption. The credit amount is equal to one year of total real property taxes or $2, 500, whichever is less. Total real property taxes include all real property taxes that would have been paid by the taxpayer for that year for the host building or structure, but not on the land. The original 2006 credit applied only to solar heating and cooling devices and had a limit of $1, 000. The 2007 amendments added geothermal devices as an eligible technology, electricity generation as an eligible end-use, and increased the maximum credit to $2, 500.

    C1. Baltimore County - Energy Conservation Devices Tax Credit: max $5000
    • The Energy Conservation Devices Tax Credit, as defined in Section 11-2-203.3 of the Baltimore County Code, offers assistance to single and multi-family residential property owners who utilize solar or geothermal devices that meet national safety and performance standards to heat, cool and supply electricity and to provide hot water for use in the structure.

      As a result of the annual budgetary limitation of $750,000 and the large number of applications received for this credit, a waiting list has been established wherein approved applications are placed on the list in the order received by the Office of Budget and Finance. For informational purposes and subject to change based on the number of applications received, an application approved on March 26, 2018 will be awarded to the applicant on the July 1, 2023 Property Tax Bill.

      The application for the Energy Conservation Devices Tax Credit must be submitted no later than June 1 of the year immediately preceding the first taxable year for which the credit is sought.

      A credit claimed during a tax year may not exceed the amount of the property taxes owed during that year and any excess amount may be carried forward for up to two additional tax years.

    C2. Baltimore County - High Performance Homes Tax Credit
    • The property tax credit for High Performance Homes, as defined in Section 11-2-203.2 of the Baltimore County Code, is based on the percentage of energy efficiency achieved within a residential structure. A corresponding decrease of that percentage is deducted from the Baltimore County real property tax obligation; any other charges or fees listed on your bill are not included in the calculation of the credit.

      This credit applies only to the Baltimore County Real Property Tax obligation. Any other charges listed on your bill are not included as part of the calculation.

    D1. Montgomery County - Conservation Property Tax Credit - Maximum: $5000
    • Montgomery County offers property tax credits on residential, owner-occupied structures equipped with solar, geothermal, and energy conservation devices. Solar and geothermal systems that heat or cool a structure; provide hot water for a structure; or generate electricity for on-site use in a structure are eligible for a tax credit. Energy conservation devices include a variety of common energy efficiency related improvements but do not include standard household appliances such as washing machines or clothes dryers. All systems must meet performance and safety standards set by a nationally recognized testing laboratory. The tax credit is effective for all property tax years beginning after June 30, 2008.

      The geothermal and solar property tax credit is equal to 50% of the cost of the system, up to $5, 000 for heating, cooling systems, and electricity generating systems* and $1, 500 for water heating systems. Residents may claim only one geothermal or solar energy tax credit per year. The tax credit for energy conservation devices is limited to the cost of the measure up to $250 per fiscal year. Eligible costs include parts, components and accessories necessary to operate the device as well as reasonable installation costs. Only costs incurred during the 12 months preceding a credit application are eligible for a tax credit.

      The amount of the tax credit may not exceed the taxes imposed on the property during a fiscal year. Excess credits accrued during a year may be carried forward for up to two additional years. The total value of credits granted by the county during a fiscal year may not exceed $400, 000 for solar and geothermal devices and $100, 000 for energy conservation devices. In the event that applications during a fiscal year exceed this limit, a credit may be granted the following year or years in the order applications are received. Prior to Council Bill 39-09 enacted in December 2009, the credit limits were set at $250, 000 annually for solar and geothermal devices and $250, 000 annually for energy conservation devices.

    D2. Montgomery County Energy Efficiency Tax Credit - Maximum: $250 per fiscal year
    • The tax credit for energy conservation devices is limited to the cost of the measure up to $250 per fiscal year. Eligible costs include parts, components and accessories necessary to operate the device as well as reasonable installation costs. Only costs incurred during the 12 months preceding a credit application are eligible for a tax credit. The amount of the tax credit may not exceed the taxes imposed on the property during a fiscal year. Excess credits accrued during a year may be carried forward for up to two additional years. The total value of credits for energy conservation devices that are granted by the county during a fiscal year may not exceed $100,000. In the event that applications during a fiscal year exceed this limit, a credit may be granted the following year or years in the order applications are received.

    E. Prince George's County - Maximum Incentive: $5,000
    • In 2008 Prince George's County enacted legislation offering a property tax credit on residential structures equipped with solar and geothermal systems. As originally devised, the credit could only be taken for systems used to heat and cool a structure or provide hot water for a structure. However, in April 2009 the county enacted additional legislation (Council Bill 05-2009) extending the property tax credit to solar-electric (PV) systems, effective May 22, 2009.

      The tax credit is equal to 50% of the cost of the system, up to $5, 000 for heating and cooling systems and $1, 500 for water heating systems. The 2009 legislation that expanded the tax credit to include PV is silent on monetary limits for electricity generating systems. Eligible costs include parts, components and accessories necessary to operate the device as well as reasonable installation costs. Only costs incurred during the 12 months preceding a credit application are eligible for a tax credit. All systems must meet performance and safety standards set by a nationally recognized testing laboratory.

      The amount of the tax credit may not exceed the taxes imposed on the property during a fiscal year. Excess credits accrued during a year may be carried forward for up to two additional years. The total value of credits granted by the county during a fiscal year may not exceed $250, 000. In the event that applications during a fiscal year exceed this limit, a credit may be granted the following year or years in the order applications are received. Applications for the tax credit will be handled by the Prince George's County Office of Finance.

  5. Energy Storage Tax Credit Program - Tax Year 2018
    The Maryland Energy Administration (MEA) is pleased to announce the launch of the Tax Year 2018 Energy Storage Tax Credit Program. The program is designed to encourage the deployment of energy storage systems in Maryland.
    The program is available to eligible residential and commercial taxpayers who have installed a qualifying energy storage system on their residential or commercial property in Maryland during Tax Year 2018 (January 1 - December 31, 2018). MEA may award up to $750,000 in energy storage tax credits on a first come, first served basis while funding is available.

    MEA is currently reserving $225,000 for residential taxpayers and $525,000 for commercial taxpayers. If either of the reserved funding allocations become oversubscribed, eligible applicants will be placed onto a wait list as long as funding remains in the other funding allocation. The funding area allocations by category will be removed on October 1, 2018, and tax credits will be assigned to eligible applicants on the waitlist in the order the eligible applications were received. Residential and commercial applicants placed onto the waitlist in Tax Year 2018 cannot be carried over to Tax Year 2019. Under no circumstances will more than $750,000 in energy storage tax credit certificates be awarded in a single Tax Year.

    As of October 1, 2018, $649,320.90 is currently available for residential and commercial tax credits.

  6. Property Tax Exemption for Solar and Wind Energy Systems
    In May 2007, Maryland established a property tax exemption for residential solar energy systems. Under this law solar energy devices "installed to heat or cool a dwelling, generate electricity to be used in the dwelling, or provide hot water for use in the dwelling" were exempt from state - but not local - property taxes. However, in April 2008 H.B. 377 was enacted, repealing this exemption beginning July 1, 2008. In place of the rescinded exemption, H.B. 377 inserted another provision exempting solar photovoltaic (PV) and solar hot water systems from real property taxes. The exemption now applies equally to state and local real property taxes. In addition, by removing the term "dwelling" and replacing it with "structure", the revised exemption appears to no longer be limited to residential systems.