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Solar Incentives: Solar Panel Installation Cost (True Cost)

30% Federal Investment Tax Credit (ITC)

  • The ITC is a 30 percent tax credit for solar systems on residential (under Section 25D) and commercial (under Section 48) properties. The Section 48 commercial credit can be applied to both customer-sited commercial solar systems and large-scale utility solar farms. 

  • The residential and commercial solar ITC has helped the U.S. solar industry grow by more than 10,000% percent since it was implemented in 2006, with an average annual growth of 50% over the last decade alone.

  • Congress passed a multi-year extension of the ITC in 2015

Maryland Solar Grant(s)

The Maryland Residential solar grant is capped at $1,000 per project.  The grant money is typically distributed after approved paperwork in the range of 6 to 12 weeks after the project is finished.

Solar Renewable Energy Certificates (SRECs)

"SRECs are a mechanism used to track the amount of electricity that comes from solar. You generate one SREC for every megawatt-hour (MWh) of electricity your solar energy system produces. For example, the average MD homeowner buying a 9-kilowatt system typically generates about 10 MWh of solar electricity per year, equivalent to 10 SRECs.
 

Utilities purchase SRECs to comply with the solar component of the Renewable Portfolio Standard. The owners of solar panel systems – from individual homeowners to large-scale solar developers – can sell their SRECs to utilities through the state’s SREC market.
 

In Maryland, an SREC has a useful life of three years, which means that SRECs you generate in 2020 can count towards 2020, 2021, or 2022 compliance periods. Importantly, only individuals who own (rather than lease) their solar energy system are eligible to sell SRECs into the MD SREC market."

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-EnergySage

Maryland Energy Storage Tax Credit

Maryland has a great incentive of up to a $5,000 State tax credit for energy storage systems (Battery systems)

The true cost of solar

Let's take a look at the cost of an average solar system (9 kilowatts) in Maryland after taking into account tax credits, SRECS, and the solar grant.

  • 9 kw x 2.91 (price per watt) = $26,190

  • Federal Investment Tax Credit of 30% equals $7,857

  • MD solar grant of $1000 

  • ≈ 10 SRECs/year at ≈ $75 per SREC ≈$750 **

  • $7,857+$1000+$750 = $9,607

  • $26,190-$9,607=$16,907 after the first year.​​

  • Energy Production of 10,000 kwh/yr X .$15 =$1,500 energy savings per year

  • Between energy savings and Renewable Energy Credits you will save on average of $2,250 / year

  • AVG payback of 7 years.  Many of our clients report faster ROI.

  • **It should be noted that this calculation does not take into account that you will be reimbursed every year for SRECs produced. It should also be noted that the value of SRECs is dependent on the SREC market.

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