Financial Incentives Summary For Photovoltaic System Owners
Maryland Residential Installations
Click here to learn more about incentives for commercial systems
· Maryland Energy Administration Solar Energy Grant Program
Up to $10,000 paid directly to the system owner:
1st 2,000 watts: $$1.25/watt
2,001-8,000 watts: $.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 and the credit is not reduced even if the taxpayer is subject to the Alternative Minimum Tax (AMT).
· 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
· Increased Resale Value of Your Property
Studies show that PV Systems increase the value of a property as much as 20 times the annual electricity savings
Pro-Forma For a 5 kW PV system on a residential property located in Maryland:
Installed Cost of System $37,500
Maryland State Grant $ 4,750
Federal ITC $11,250*
1st Year Sale of Renewable Energy Credits (RECs) $1,800**
Electricity Savings in 1st Year $ 675
Total Grants, Credits and Savings in 1st Year: $ 18,475
Net Cost to System Owner at end of 1st Year: $ 19,025
Increased Resale Value of Property: $ 13,500
Net Investment by System Owner at end of 1st Year: $ 5,525
5 kW Solar System Payback Summary
| Year |
Cost |
Federal Tax Credit1 |
State Grant |
Electricity Savings2 |
SREC Sale3 |
Net Cost |
|
|
|
|
|
|
|
|
| 1 |
$37,500 |
|
$11,250 |
$4,750 |
$675 |
$1,800 |
$19,025 |
| 2 |
$19,025 |
|
|
|
$699 |
$1,575 |
$16,751 |
| 3 |
$16,751 |
|
|
|
$724 |
$1,575 |
$14,452 |
| 4 |
$14,452 |
|
|
|
$749 |
$1,350 |
$12,353 |
| 5 |
$12,353 |
|
|
|
$775 |
$1,350 |
$10,228 |
| 6 |
$10,228 |
|
|
|
$802 |
$1,125 |
$8,301 |
| 7 |
$8,301 |
|
|
|
$830 |
$1,125 |
$6,346 |
| 8 |
$6,346 |
|
|
|
$859 |
$1,050 |
$4,436 |
| 9 |
$4,436 |
|
|
|
$889 |
$900 |
$2,647 |
| 10 |
$2,647 |
|
|
|
$921 |
$675 |
$1,052 |
| 11 |
$1,052 |
|
|
|
$953 |
$675 |
-$576 |
| 12 |
-$576 |
|
|
|
$986 |
$450 |
-$2,012 |
| 13 |
-$2,012 |
|
|
|
$1,021 |
$450 |
-$3,483 |
| 14 |
-$3,483 |
|
|
|
$1,056 |
$225 |
-$4,764 |
| 15 |
-$4,764 |
|
|
|
$1,093 |
$263 |
-$6,120 |
| 16 |
-$6,120 |
|
|
|
$1,132 |
$0 |
-$7,251 |
| 17 |
-$7,251 |
|
|
|
$1,171 |
$0 |
-$8,422 |
| 18 |
-$8,422 |
|
|
|
$1,212 |
|
-$9,635 |
| 19 |
-$9,635 |
|
|
|
$1,255 |
|
-$10,889 |
| 20 |
-$10,889 |
|
|
|
$1,298 |
|
-$12,188 |
| 21 |
-$12,188 |
|
|
|
$1,344 |
|
-$13,532 |
| 22 |
-$13,532 |
|
|
|
$1,391 |
|
-$14,922 |
| 23 |
-$14,922 |
|
|
|
$1,440 |
|
-$16,362 |
| 24 |
-$16,362 |
|
|
|
$1,490 |
|
-$17,852 |
| 25 |
-$17,852 |
|
|
|
$1,542 |
|
-$19,394 |
| 26 |
-$19,394 |
|
|
|
$1,596 |
|
-$20,990 |
| 27 |
-$20,990 |
|
|
|
$1,652 |
|
-$22,642 |
| 28 |
-$22,642 |
|
|
|
$1,710 |
|
-$24,352 |
| 29 |
-$24,352 |
|
|
|
$1,770 |
|
-$26,122 |
| 30 |
-$26,122 |
|
|
|
$1,832 |
|
-$27,953 | |
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 residential solar PV system in Maryland can pay for itself within 11 years of installation. Over the expected life of the system, a system owner can expect to save over $30,000 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. The Federal ITC is 30% of the cost basis of the system and is not affected by the amount of the state grant, assuming the grant is treated as taxable income. The effective value of the ITC will be reduced by the taxes owed on the grant income and is not reflected in this analysis. Please consult your tax advisor for details
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.
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.
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