Maryland Solar in 2026: What You're Working With
Maryland is a genuinely good state for residential solar. It's not the outlier that Washington DC is — DC's SREC market is in a class of its own — but Maryland's incentive package is more complete than most states in the country. A direct state grant, two meaningful tax exemptions, a real SREC income stream, and reliable net metering combine to produce payback periods that can reach as low as 7–8 years for the right situation.
The critical 2026 update: the federal Investment Tax Credit (ITC) for residential solar expired on December 31, 2025. Maryland homeowners installing solar in 2026 cannot claim a 30% federal tax credit. On a $24,000 system, that's roughly $7,200 that's no longer on the table. The state and local incentives described in this guide don't fully replace the ITC — nothing state-level does — but Maryland's combination of programs is strong enough to keep the economics workable for homeowners with the right electric bill and roof.
Here's a complete breakdown of every Maryland solar incentive available in 2026, what each one is worth, and where they matter most.
Maryland Property Tax Exemption for Solar
Under Maryland Tax-Property Article § 7-240, residential solar energy equipment is exempt from property tax assessments statewide. When you install solar panels, the added value to your home is excluded from your county or municipal property tax calculation — your taxes cannot increase as a result of going solar.
This exemption is mandatory and statewide. It covers the full value of the solar installation: panels, inverters, racking, monitoring systems, and associated hardware. You do not need to file a separate application; the exemption is inherent in the law and applied at the assessment level.
What It's Worth
Solar installations consistently add 3–4% to home appraised value. For a $24,000 system, that's roughly $18,000–$24,000 in added value. Maryland's effective residential property tax rates vary by county — Baltimore City and Prince George's County run around 0.99–1.1%, while Montgomery County is closer to 0.72–0.85% and Baltimore County around 0.83–0.95%.
| Home Value Added by Solar | Tax Rate 0.80% | Tax Rate 1.0% | Annual Tax Savings |
|---|---|---|---|
| $18,000 | $144/yr | $180/yr | $144–$180/yr |
| $21,000 | $168/yr | $210/yr | $168–$210/yr |
| $24,000 | $192/yr | $240/yr | $192–$240/yr |
Over a 25-year system life, the property tax exemption saves a typical Maryland homeowner $3,600–$6,000 total — a real but not transformative benefit, compounded over decades.
Maryland Sales Tax Exemption for Solar Equipment
Maryland exempts solar energy equipment from the state's 6% sales tax under Maryland Tax-General Article § 11-230. The exemption applies to solar panels, inverters, racking, wiring, and associated installation equipment purchased for residential use.
This is an automatic exemption — your installer claims it when purchasing equipment. No paperwork for the homeowner. On a $24,000 system:
- At 6.0%: $1,440 in avoided sales tax
Maryland's 6% exemption is slightly more valuable than Virginia's 5.3% exemption and applies the same way — clean upfront savings with no action required on your part.
MEA Residential Clean Energy Grant Program
The Maryland Energy Administration (MEA) runs the Residential Clean Energy Grant Program, which provides direct cash grants to homeowners who install qualifying solar PV systems. This is the most distinctive piece of Maryland's incentive stack — a direct grant, not a tax credit, meaning you receive it whether or not you owe Maryland income tax.
How It Works
- Grant amount — $1,000 for standard residential solar PV installations. Income-qualified households may receive larger grants; the MEA periodically updates income-tier amounts based on program funding
- Eligibility — Maryland homeowners who install a grid-connected solar PV system on their primary or secondary residence
- Application — submitted to the MEA after your system is permitted, installed, and inspected. The MEA reviews and processes applications; grants are paid after approval
- Funding limits — the program is funded annually through the Maryland Strategic Energy Investment Fund. Grants are awarded until annual funds are exhausted. Apply as soon as your system is operational
Verify current grant amounts and funding availability at mea.maryland.gov before factoring this into your budget. The program has been consistently funded, but amounts can change between legislative cycles.
Calculate your Maryland solar savings
Enter your zip code, electric bill, and roof details. We'll model your payback period with Maryland's 2026 incentive stack — MEA grant, SREC income, BGE/Pepco net metering, and real utility rates.
Calculate My MD Savings →Net Metering in Maryland: BGE, Pepco, Delmarva & SMECO
Maryland's net metering law (Maryland Code, Public Utilities § 7-306) requires all investor-owned utilities to credit solar customers at the full retail electricity rate for excess power they send to the grid. This applies to BGE (Baltimore Gas & Electric), Pepco, Delmarva Power, and SMECO.
How Maryland Net Metering Works
- Full retail-rate credit — excess electricity sent to the grid is credited at the same rate you pay for electricity, not a wholesale or avoided-cost rate
- Monthly credit rollover — unused credits carry forward month to month, allowing summer overproduction to bank credits that offset winter months
- Annual true-up — at the end of the annual billing cycle, any remaining credit balance is typically paid out at the utility's avoided-cost rate (around $0.03–$0.05/kWh). The goal is to size your system to approximately match your annual consumption
- System size limits — residential systems up to 200% of average annual load are eligible; practically, most home installations are sized to 80–110% of consumption
Utility Rates by Provider
The per-kWh value of solar depends significantly on which utility serves you:
- BGE (central Maryland, Baltimore metro) — residential rates of $0.14–$0.16/kWh. BGE is the largest utility in the state and serves most of the Baltimore area and parts of central Maryland
- Pepco (Montgomery County, Prince George's County) — residential rates of $0.15–$0.17/kWh. Pepco's DC-adjacent territory tends to have slightly higher rates due to distribution costs and the area's electricity demand profile
- Delmarva Power (Eastern Shore, parts of western MD) — residential rates of $0.13–$0.15/kWh. Lower rates mean slightly longer payback periods for solar, but the Eastern Shore's higher sun hours partially compensate
- SMECO (Southern Maryland) — residential rates of $0.13–$0.15/kWh. SMECO is a cooperative serving Calvert, Charles, Prince George's, and St. Mary's Counties
Peak sun hours across Maryland range from about 4.3–4.8 per day depending on location — Eastern Shore and Southern Maryland see slightly more sun than Baltimore and the DC suburbs. Use our sizing tool to model your specific location's expected annual output.
Maryland SREC Market
Maryland's Solar Renewable Energy Credit (SREC) market is the second-best in the mid-Atlantic — significantly more valuable than Virginia's but well below DC's exceptional market. Every 1,000 kWh (1 MWh) your system generates earns one SREC, which you can sell to utilities or through an SREC broker.
Maryland SRECs currently trade at $60–$90 per credit. The market is driven by Maryland's Renewable Portfolio Standard (RPS), which sets escalating solar carve-out targets that utilities must meet by purchasing SRECs or paying an alternative compliance payment (ACP) — the penalty for falling short. As long as demand from utilities exceeds supply from solar installations, SREC values stay elevated.
What SREC Income Looks Like in Practice
A typical 8kW system in Maryland generates roughly 9,000–10,000 kWh per year — that's 9–10 SRECs annually.
| System Size | Annual SRECs Generated | At $60/SREC | At $90/SREC |
|---|---|---|---|
| 6 kW | 6–8 SRECs | $360–$480/yr | $540–$720/yr |
| 8 kW | 9–10 SRECs | $540–$600/yr | $810–$900/yr |
| 10 kW | 11–13 SRECs | $660–$780/yr | $990–$1,170/yr |
| 12 kW | 13–15 SRECs | $780–$900/yr | $1,170–$1,350/yr |
SREC values fluctuate with market conditions. Check current prices through brokers like SRECTrade, Sol Systems, or SolSystems before building SREC income into your payback model. SREC programs typically run for 15 years from installation date.
This SREC income is additive to your electricity bill savings — meaning Maryland solar economics are materially better than the electricity bill savings alone would suggest. A $60–$90/SREC market makes Maryland substantially more attractive than Virginia ($20–$50/SREC) for homeowners doing the math.
BGE, Pepco & Delmarva Utility Programs
BGE Programs
BGE offers a residential interconnection process for solar customers and participates in Maryland's net metering framework. BGE has periodically offered rebate programs for energy efficiency and smart home upgrades through its Smart Energy Savers Program — check bge.com for any current solar-adjacent incentives, as program offerings change with Maryland Public Service Commission approvals.
BGE's interconnection process for residential solar under 10 kW typically takes 3–6 weeks from application to Permission to Operate (PTO). Your installer handles the application; BGE conducts any necessary grid studies for larger systems.
Pepco Programs
Pepco serves Montgomery County and Prince George's County — the DC suburbs — where higher residential electricity rates ($0.15–$0.17/kWh) make solar particularly compelling. Pepco participates in Maryland's net metering framework and has run energy efficiency rebate programs. Check pepco.com for current program availability and any solar-specific rebates.
Delmarva Power (Eastern Shore)
Delmarva Power serves the Eastern Shore and portions of Cecil and Harford Counties. Delmarva also participates in Maryland's net metering rules. Eastern Shore homeowners benefit from among the best solar irradiance in the state — 4.5–4.8 peak sun hours per day — which partially offsets Delmarva's slightly lower retail rates.
What About the Federal Solar Tax Credit?
The federal Investment Tax Credit (ITC) — the 30% residential solar tax credit that reduced a system's effective cost by nearly a third — expired on December 31, 2025. Maryland homeowners who install solar in 2026 cannot claim any federal tax credit for their installation.
This is the biggest change in Maryland solar economics in 2026. On a $24,000 system, the ITC was worth approximately $7,200 — bringing effective cost down to about $16,800 and dramatically compressing payback periods. Without it, homeowners absorb the full installed cost.
Maryland's state-level programs don't replicate the ITC's impact, but they're more substantial than most states offer. The MEA grant ($1,000) plus sales tax exemption (~$1,440) reduces effective cost by roughly $2,440 upfront. Adding annual SREC income of $540–$900 and property tax savings of $160–$240/year creates a meaningful ongoing financial return that continues improving over time as utility rates rise.
Maryland Solar by Region
Baltimore Metro (Baltimore City, Baltimore County, Anne Arundel, Howard Counties)
Baltimore is Maryland's strongest rooftop solar market for a combination of reasons:
- BGE's rising rates — residential electricity at $0.14–$0.16/kWh and climbing makes each kWh of solar generation increasingly valuable year over year
- Larger average electric bills — Baltimore's older housing stock and less efficient homes tend toward higher energy consumption, improving solar ROI
- SREC access — Baltimore metro homeowners have easy access to the Maryland SREC market through established brokers
- 4.3–4.5 peak sun hours — solid production numbers, slightly lower than the Eastern Shore but adequate for strong annual output
Montgomery County & Prince George's County (DC Suburbs, Pepco Territory)
The DC suburbs are arguably Maryland's best solar economics on a pure numbers basis. Pepco's residential rates of $0.15–$0.17/kWh are among the highest of any Maryland utility — every kWh your panels generate is displacing some of the state's priciest electricity. Combined with access to Maryland SRECs and the MEA grant, Montgomery County and PG County homeowners often see payback periods in the 7–10 year range for well-sized systems.
If you're in the DC suburbs, it's also worth noting that DC homeowners have access to DC's exceptional SREC market ($350–$420/SREC). Maryland addresses don't qualify for DC SRECs — but if you're near the border, confirm your exact service territory with your installer.
Eastern Shore (Delmarva Power Territory)
The Eastern Shore has Maryland's best solar irradiance — 4.5–4.8 peak sun hours per day — and some of the state's most favorable conditions for high annual output. Delmarva's lower retail rates ($0.13–$0.15/kWh) extend payback periods slightly compared to BGE or Pepco territory, but the combination of higher sun and SREC income still produces competitive economics. Battery storage is worth evaluating for Eastern Shore homeowners given the region's exposure to summer storms and occasional grid outages.
Western Maryland (Allegany, Garrett, Washington Counties)
Western Maryland sees slightly less solar irradiance than the rest of the state — roughly 4.2–4.4 peak sun hours per day — and higher installation costs due to fewer competing installers in the region. Solar still works financially for high-electricity-use homes, but the economics are tighter than the Baltimore and DC-suburb markets. Factor installer density into your quote process — getting at least three bids is especially important in less competitive markets.
Maryland Solar Cost Table: What to Expect in 2026
| System Size | Gross Installed Cost | After Grant + Tax Exemptions | Annual Savings (Elec. + SREC)* | Simple Payback |
|---|---|---|---|---|
| 6 kW | $16,800–$21,000 | $14,360–$18,560 | $1,500–$2,200 | 7–13 years |
| 8 kW | $22,400–$28,000 | $19,960–$25,060 | $2,040–$2,900 | 7–13 years |
| 10 kW | $28,000–$35,000 | $25,280–$31,640 | $2,560–$3,650 | 7–12 years |
| 12 kW | $33,600–$42,000 | $30,320–$37,920 | $3,080–$4,350 | 7–12 years |
*Annual savings include electricity at BGE/Pepco blended rate ($0.15/kWh avg), 3% annual rate escalator, and SREC income at $70/SREC midpoint. After-incentive cost reflects: $1,000 MEA grant + 6% sales tax exemption (~$1,440 on $24k system). Property tax savings ($160–$240/yr) not included in annual savings figure. Payback range reflects variation by utility territory, bill size, installer pricing, and SREC market conditions. Actual results vary.
The Full Incentive Stack: Maryland Summary
| Incentive | Value | Status |
|---|---|---|
| Federal ITC (30%) | Expired Dec 31, 2025 | ❌ Not available |
| MEA Residential Clean Energy Grant | $1,000 (standard); more for income-qualified | ✅ Apply at mea.maryland.gov |
| MD Property Tax Exemption | $160–$240/yr (life of system) | ✅ Automatic statewide |
| MD Sales Tax Exemption (6%) | ~$1,440 on $24k system | ✅ Applied automatically |
| Net Metering (BGE/Pepco/Delmarva/SMECO) | Full retail rate credit | ✅ Available statewide |
| Maryland SRECs | $60–$90/SREC (~$540–$900/yr for 8kW) | ✅ Market-dependent |
| BGE/Pepco Utility Programs | Check current availability | ⚠️ Check utility websites directly |
Is Solar Worth It in Maryland in 2026?
Yes — for the right home and situation. Maryland's incentive combination makes solar a solid investment for most homeowners with a good roof and a meaningful electric bill. The absence of the federal ITC pushes payback periods out vs. 2024, but Maryland's SREC market and MEA grant meaningfully close the gap.
Solar makes strong financial sense in Maryland if:
- Your monthly electric bill is $130 or higher — the math improves dramatically as bills rise
- You're in Pepco territory (Montgomery or PG County) — higher rates produce better per-kWh savings
- Your roof has a south-, southeast-, or southwest-facing slope with minimal shading and at least 15–20 years of life remaining
- You plan to stay in the home for at least 8–10 years to capture the full payback
- You're prepared to register your SRECs and sell them through a broker — SREC income requires active management
Solar is a tougher call in Maryland if:
- Your electric bill is under $80–$90/month — the savings base is too small to drive compelling payback
- Your roof is heavily shaded or north-facing — output will be significantly reduced
- You're planning to sell within 5–6 years — difficult to break even in that timeframe without the ITC
- You're on Delmarva or SMECO with lower electricity rates — economics are still positive but payback stretches toward the 11–13 year range
Maryland electricity rates have risen approximately 20–25% over the last five years, driven by grid modernization, transmission investments, and growing demand from the DC metro area. Rate increases are expected to continue — and every year rates go up, your solar system's effective return improves on the electricity it's generating for free. The longer your time horizon, the stronger the Maryland solar case.
Not sure if your specific bill and roof work? Run your numbers in our savings calculator — enter your electric bill, zip, and roof details and get a Maryland-specific payback model in under two minutes.
Maryland vs. Neighboring States: The Solar Comparison
| Incentive | Maryland | Virginia | Washington DC |
|---|---|---|---|
| State Grant/Rebate | $1,000 MEA Grant ✓ | Limited | DCSEU programs |
| Property Tax Exemption | Yes ✓ | Yes ✓ | Yes ✓ |
| Sales Tax Exemption | Yes (6%) ✓ | Yes (5.3%) ✓ | No ✗ |
| SREC Value | $60–$90/SREC | $20–$50/SREC | $350–$420/SREC |
| Net Metering | Full retail ✓ | Full retail ✓ | Full retail ✓ |
| Typical Payback (2026, no ITC) | 7–13 years | 9–13 years | 4–6 years |
Maryland sits solidly in the middle — better than Virginia in total incentive value (the MEA grant, 6% sales tax exemption, and higher SREC prices all favor Maryland), but well short of DC's exceptional SREC market, which remains the best residential solar financial case in the country. If you live close to the DC border, it's worth confirming your exact utility service area with your installer — a handful of Maryland zip codes near the DC line are served by utilities that participate in different programs.
For more context on the DC side of the market, see our DC solar incentives guide. For Virginia homeowners, see our Virginia solar incentives guide.
FAQ
Does Maryland have a property tax exemption for solar panels?
Yes — statewide and automatic. Under Maryland Tax-Property Article § 7-240, the added value your solar installation brings to your home is excluded from property tax assessments. For a typical Maryland installation, this saves $160–$240 per year depending on your county's effective property tax rate. No application required; the exemption is applied at the assessment level.
What is the Maryland MEA Residential Clean Energy Grant?
The Maryland Energy Administration (MEA) provides a $1,000 direct grant to homeowners who install qualifying solar PV systems. Unlike a tax credit, this is a grant — you receive it regardless of your Maryland income tax liability. Income-qualified households may receive more. Apply through mea.maryland.gov after your system is installed and permitted. Annual funding is limited, so apply promptly once your system is operational.
How does the Maryland SREC market work in 2026?
Every 1 MWh your solar system generates earns one Solar Renewable Energy Credit (SREC), which utilities must purchase to meet Maryland's Renewable Portfolio Standard or pay a penalty. Maryland SRECs trade at $60–$90 per credit. An 8kW system earns 9–10 SRECs/year — roughly $540–$900 in annual income for 15 years from installation. Register your system through an SREC aggregator or broker like SRECTrade to start earning.
How does net metering work with BGE and Pepco in Maryland?
Both BGE and Pepco credit your account at the full retail electricity rate for excess solar power you send to the grid. BGE's residential rate is approximately $0.14–$0.16/kWh; Pepco's is $0.15–$0.17/kWh. Credits carry forward monthly; any remaining annual balance is paid at the utility's avoided-cost rate (~$0.03–$0.05/kWh) at your annual true-up. Size your system to match your annual consumption for optimal economics — oversizing for export is inefficient under current net metering rules.
Is the federal solar tax credit available in Maryland in 2026?
No. The federal Investment Tax Credit (ITC) expired December 31, 2025. Maryland homeowners installing solar in 2026 cannot claim a federal tax credit. Maryland's state-level incentives — the MEA grant, property tax exemption, sales tax exemption, SREC income, and net metering — are the primary financial drivers for solar in 2026.
What is the solar payback period in Maryland in 2026?
Without the ITC, expect 7–13 years for most Maryland installations depending on your utility, electric bill size, and SREC market conditions. Pepco territory (Montgomery/PG County) with higher rates tends toward the lower end. Delmarva and SMECO territory with lower rates trends toward the higher end. For a typical 8kW BGE customer: $22,400–$28,000 installed, roughly $19,960–$25,060 after the MEA grant and tax exemption, and $2,040–$2,900/year in combined electricity savings and SREC income — producing an 8–12 year simple payback. Run your specific scenario here.