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Every day, solar technology becomes a more widespread source of energy for many households throughout the United States. Despite the growth of this industry, though, many people are still skeptical of solar technology or see little value in switching to it for their own personal use. This hesitation is partially due to a lot of people not being aware of the federal and state incentives available to make the switch financially worth their while.
Solaris Solar Solutions sells and installs solar systems for residential and commercial use in Maryland, and in this post, our goal is to lay out some specific reasons why going solar is, as of right now, a financially sensible decision. It’s clean, renewable energy which the government has an interest in relying upon more into the future, which is why the following federal and Maryland solar incentives are in place to make this choice an easier one for you.
The federal residential solar tax credit allows you to claim a percentage of the installation cost of your solar system on your income taxes. This reduces the amount you pay on your taxes by that percentage of the installation cost. The main rule for this incentive is that the system needs to be installed at your primary or secondary residence between 2020-2023 and begin generating electricity during that time.
So what percentage of the cost can be claimed on your income taxes? If the system is installed and active during or before 2022, it’s a 26% tax credit, meaning that 26% of the installation cost of the solar system is subtracted from your federal income tax. If the system is eligible as of 2023, this incentive is reduced to 22%. There’s no maximum amount that can be claimed, so however much the system costs, the tax credit percentage remains the same.
Many individual states have their own incentives for going solar, and Maryland is no different. Maryland’s solar incentives work a little differently than what the federal government offers in that they don’t just reduce the cost of installation through rebates. Once the system is in place, it’s possible for you to actively make a profit off of the energy you produce, although this won’t happen quickly or substantially.
The state of Maryland will offer you a $1,000 rebate in addition to the tax credit offered by the federal government when you install a solar system. Additionally, for each megawatt-hour of energy your system produces, you’ll be given a solar renewable energy credit, or SREC. These credits have monetary value and can be sold in the SREC marketplace. Taken together, these state and federal incentives can substantially reduce or even eliminate the total cost of installation over time.
As mentioned before, the current government incentives for going solar make it possible to cover the cost of installation over time and eventually profit off of the energy you produce. Beyond that, though, a system that’s producing a sufficient amount of energy can allow you to become energy-independent, which will seriously reduce your utility bills and save you a substantial amount of money in the long run.
Aside from the financial benefits of making this decision, though, there are larger issues which drive the government to incentivize it as much as they do. As more people switch over to relying upon solar energy, the negative environmental impact of fossil fuels is reduced as they’re utilized less and less. Energy independence for individuals also helps achieve energy independence for cities, states, and the United States as a whole. In this way, choosing to go solar is not only a financially sound decision, but a positive contribution to bigger, important changes.
If it sounds like going solar is a solid financial decision for you, don’t wait; schedule a free consultation with us now to find out if your home is eligible for a solar installation. While you’re at it, take a look at some of our products and see what our systems could look like on your home!
