Maryland Financial Incentives

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Corporate Tax Credit

Corporate Income Tax Credit for Green Buildings
Enacted in 2001, this income tax credit applies to nonresidential and residential multifamily buildings of at least 20,000 square feet that are constructed or rehabilitated to meet criteria set forth by the U.S. Green Building Council or other similar criteria. Newly constructed buildings must be located on a qualified brownfields site, or in a priority funding area, and not in a wetlands area. Building rehabilitation projects are eligible if they do not increase the size of the building by 25%, or if they are located in a priority funding area. Credits apply to three types of alternative energy sources: photovoltaics, wind turbines and fuel cells. Tax credits for alternate energy sources can only be claimed if they serve a green whole building, a green base building, or green tenant space.

Clean Energy Production Tax Credit – Corporate
Maryland offers a production tax credit for electricity generated by wind, geothermal energy, solar energy, hydropower, small irrigation power, municipal solid waste and biomass resources. Eligible biomass resources include anaerobic digestion, landfill gas, wastewater-treatment gas, and cellulosic material derived from forest-related resources (excluding old-growth timber), from waste pallets and crates, or from agricultural sources

Local Rebate Program

Montgomery County – Clean Energy Rewards Program
The Montgomery County Clean Energy Rewards program provides incentives to Montgomery County residents, businesses, non-profits, and congregations for purchasing clean energy through certified suppliers. Residential consumers receive a credit of 1 cent for each kilowatt-hour (kWh) of eligible clean energy purchased. Non-residential customers, such as businesses and congregations, will receive 1.5 cent per kWh.

Personal Tax Credit

Personal Income Tax Credit for Green Buildings
Enacted in 2001, this income tax credit applies to non-residential and residential multifamily buildings of at least 20,000 square feet that are constructed or rehabilitated to meet criteria set forth by the U.S. Green Building Council or other similar criteria. Newly constructed buildings must be located on a qualified brownfields site, or in a priority funding area, and not in a wetlands area. Building rehabilitation projects are eligible if they do not increase the size of the building by 25%, or if they are located in a priority funding area.

Credits apply to three types of alternative energy sources: photovoltaics, wind turbines and fuel cells. Tax credits for alternate energy sources can only be claimed if they serve a green whole building, a green base building, or green tenant space.

Clean Energy Production Tax Credit – Personal
Maryland offers a production tax credit for electricity generated by wind, geothermal energy, solar energy, hydropower, small irrigation power, municipal solid waste and biomass resources. Eligible biomass resources include anaerobic digestion, landfill gas, wastewater-treatment gas, and cellulosic material derived from forest-related resources (excluding old-growth timber), from waste pallets and crates, or from agricultural sources

Property Tax Exemption

Local Option – Corporate Property Tax Credit
Title 9 of Maryland’s property tax code creates an optional property tax credit for corporations. This statute allows counties to provide a credit against the corporate property tax for buildings equipped with a solar, geothermal or qualifying energy conservation device used to heat or cool a structure. Under this provision, counties determine the amount of the credit and are given the freedom to define solar, geothermal, and energy conservation devices. Counties also determine the length of time that the credit may be available up to a maximum of three years. (It should be noted that the statute includes the city of Baltimore in this provision because Baltimore, the city, has its own jurisdiction as a county.) Maryland’s local option tax incentive is unique because it is applied in the form of a credit -- not an exemption or exclusion as in the case of all other property tax programs.

Title 8 of Maryland’s tax code includes a state-wide special assessment provision for solar heating and cooling systems. Under that provision, such systems are to be assessed at not more than the value of a conventional system for property tax purposes.

Local Option – Property Tax Exemption for High Performance Buildings
Similar to Maryland's Property Tax Credit for Renewable Energy, Title 9 of Maryland's tax code creates an optional property tax credit for high performance buildings. This statute allows counties and municipalities to provide a credit against the property tax for buildings which achieve at least a silver rating according to the U.S. Green Building Council's LEED standards, or which meet other comparable green building guidelines or standards approved by the State.

The counties or municipalities which elect to provide this property tax credit may determine the amount of the property tax credit under this section, the duration of the property tax credit, the criteria and qualifications necessary to receive the credit, and any other necessary provisions.

Special Property Assessment
Title 8 of Maryland’s property tax code allows for a state-wide special assessment provision for solar heating and cooling systems. Under this provision, such systems are to be assessed at not more than the value of a conventional system for property tax purposes if no conventional system exists in the building.

If a solar energy heating and cooling system is installed in addition to a conventional system in a building, the combined system may be assessed at not more than the value of the conventional system – essentially a full exemption for the solar energy equipment.

Sales Tax Exemption – Residential

Wood Heating Fuel Exemption
This statute exempts from the state sales tax all wood or "refuse-derived" fuel used for heating purposes. This exemption applies to residential use only.

State Rebate Program

Solar Energy Grant Program
Maryland's Solar Energy Grant Program, administered by the Maryland Energy Administration (MEA), provides financial incentives to homeowners, businesses, local governments and non-profit organizations that install solar water-heating systems or solar-electric (PV) systems. This program, which took effect in January 2005, replaced the state's expired "Clean Energy Incentives" tax credit for solar-energy equipment. The first two rounds of program funding supported 75 projects.

Net Metering Rules

Maryland – Net Metering
In 1997, Maryland enacted legislation allowing net metering for residential customers and schools with qualified solar-energy systems up to 80 kilowatts (kW) in capacity. In May 2004, the law was expanded by including wind as an eligible technology, and by extending eligibility to commercial facilities. In April 2005, the net metering again expanded – by including biomass as an eligible resource, and by increasing the maximum system capacity from 80 kW to 200 kW. Furthermore, under the April 2005 revisions, generators may petition the Maryland Public Service Commission (PSC) to allow net metering for systems with a capacity of up to 500 kW. The PSC has the authority to approve net metering for systems up to 500 kW if the commission finds that the project meets public safety and reliability requirements, and that the project is in the public interest.

Solar Access Law/Guideline

Solar Access
Maryland's construction code prohibits covenants restricting installation of solar collection panels. A restrictive covenant regarding land use, which became effective after July 1, 1980, may not impose or act to impose unreasonable limitations on the installation of solar collection panels on the roof or exterior walls of improvements. This statute does not apply to a restrictive covenant on historic property that is listed by the Maryland Inventory of Historic Properties or by the Maryland Register of Historic Properties.

Other Incentive Information

Maryland Energy Administration

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