Up to $10,000 paid directly to the system owner:

1st 2,000 watts:  $1.25/watt

2,001-8,000 watts: $0.75/watt

8,001-20,000 watts: $0.25/watt 

·   Federal Investment Tax Credit

30% of the amount paid to purchase and install a PV system completed prior to December 31, 2016 can be deducted as a credit on your income tax in the current tax year.  For 2009 or 2010, a 30% federal grant is available in lieu of the tax credit. 

·   Federal Tax Deduction for Accelerated Depreciation

50% of the taxable basis of a PV system placed in service prior to December 31, 2009 can be deducted in the first year on your income tax return. The remainder will be deducted over the next five years.  Beginning January 1, 2009, equipment placed in service may be depreciated using MACRS over a five year period.

·   Sale of Renewable Energy Credit Certificates (RECs)

Special state rules allow owners to participate in programs to sell RECs to utilities and other buyers of clean-energy certificates.

·   Electricity Savings on Your Utility Bill

Grid connected systems can be net-metered to effectively pay you for the electricity you produce but do not use

Pro-Forma For a 5 kW PV system on a commercial property located in Maryland:

                                    Installed Cost of System                                                  $ 37,500

                                    Maryland State Grant                                                        $  4,750

                                    Federal ITC/Grant                                                               $ 11,250  

                                   Depreciation Tax Savings in 1^st Year                               $  7,201  

                                   Sale of Renewable Energy Credits (RECs)                      $ 1,800  

                                   Electricity Savings in 1^st Year                                            $    675  

Total Grants, Credits and Savings in 1^st Year:                                                  $ 25,676 

Net Investment by System Owner at end of 1^st Year:                                    $ 11,824

5 kW Commercial Solar System Payback Summary

Results are not guaranteed and are for illustrative purposes only.  Maintenance costs, inverter replacement and taxes on SREC income, are not included.  Other costs or lower SREC income are possible.

The ongoing electricity savings and depreciation deductions means that a commercial solar PV system in Maryland can pay for itself within 5 years of installation.  Over the expected life of the system, a system owner can expect to save over $25,000 in electricity costs if utility rates increase by just 3.5% per year.

The actual incentives available to a particular installation depend on many factors including the ability of the taxpayer to take advantage of the deductions and credits available as well as the funding of state programs and participation by utilities.  The figures above are for illustrative purposes only and are not a guarantee that any particular installation or system owner will qualify for any or all of these incentives.

1. Federal Grant in lieu of Tax Credit available for systems starting construction in 2009 and 2010 and completed prior to 2016.

2. Electricity saving assume initial rate of $0.11 per kWh increasing 3.5% annually.

3.  SREC sale assumes annual sale at 75% of ACP.

Depreciation assumes 28% Federal tax rate, 1/2 year convention, MACRS 5 year and 50% bonus. 

To learn more about the financial potential of PV installations in Maryland, call Fred Ugast at 240-344-2657 or send an email to fred.ugast@uspvinc.com.