Right off the bat, the cost of solar in Maryland is on par with other states that have the same sunlight. Based on the system you get, it can be very cheap once you use all the state and federal solar incentives.
Not only that, but you’ll be saving a pretty penny on your electricity bill. For that reason, it’s best to explore all the options and prices to better understand how much you’ll need to pay.
Cost of Solar in Maryland
On average, the installation sets you back between $12,000 – $16,300, with solar panels included. And if you calculate it as cost per watt, the price is between $2.4 and $3.3 per watt.
Note that none of these numbers factor in the incentives and rebates available.
Now, when calculating the cost of solar in Maryland, you need to know about the “solar payback period.” That’s the time it takes to cover your investment from electricity bill savings. In Maryland, it’s about 10 years.
From an investment perspective, the payback period might seem too long. However, it’s on par with other states that have the same amount of sunlight.
Additionally, you need to keep in mind that getting a solar system is a long-term investment. For example, in 20 years, you’ll save close to $19,500 on your electricity bill, which is huge. Plus, this upgrade increases the resell value of your home.
Be that as it may, the installation cost might seem too high for some households. However, the state of Maryland allows for solar leases, loans, and PPAs. These help you finance the investment but keep in mind that specific government incentives might not apply if you lease the system.
Even so, it pays to explore some incentives and rebates available in Maryland.
Incentives and Rebates
Getting tax credit and using state incentives shaves off thousands of dollars from your investment.
Investment Tax Credit
This is a federal tax credit that allows you to deduct 26% of the total price of your system from federal taxes. Say you purchase a $15,000 system; then you can file for a deduction close to $4,000.
However, the tax credit drops to 22% at the start of 2023. The federal government also announced the incentive will be removed for residential properties come 2024. However, commercial solar system owners will still be getting a 10% deduction.
Due to this, it’s best to purchase a solar system sooner rather than later. Also, while the Investment Tax Credit is in effect, you’re allowed to roll over the surplus credit into the following year.
SREC (Solar Renewable Energy Certificates)
In 2020, Maryland set a goal to generate 2.5% of its energy from solar power. As a result, the state pays residents who are willing to help.
When you join the program, you get one Maryland SREC per MWh of solar energy your household generates. Then, you can sell this at the SREC market. So, you’re selling the one MWh you produced back to the state.
Residential Clean Energy Grants
Maryland has its own solar rebate system, which is very simple but effective. All homeowners who install solar systems get a $1,000 payment as an incentive for their efforts. However, there are certain limitations you should know.
First, your system needs to be under 20kW and installed at your residence. Plus, you need to hire a NABCEP-certified installer to do the work.
The given limitations are there to ensure the installation quality and prevent abuse.
Tax Benefits
On top of the federal tax credit, you can get two tax breaks from the state.
The Property Tax Exemption for Solar and Wind Energy Systems removes additional taxation from increasing the value of your property after installing a solar system.
The Sales and Use Tax Exemption for Renewable Energy Equipment allow you to purchase a solar system free of taxes.
When applied, these will remove at least another couple of thousand dollars from your investment.
Net Metering
The great news is that Maryland allows for net metering, and you get full credit on your electricity bill. That means the utility company compensates you for all the power your system relays back to the grid.
If you install a battery or a power wall, you can program how much energy is going back and how much you keep. Without the battery, any surplus you make goes back to the grid automatically.
Either way, the system is great because it significantly reduces your bills. Potomac Electric Power Company (Pepco) is a provider that offers the best net metering program in the state.
Solar Energy Output in Maryland
One of the critical elements that determine the output is the power of your system and the installation quality. The amount of electricity you can produce is proportionate to the sunlight your panels absorb.
Simply, the more sunlight there is, the higher the output.
Typically, Maryland has 105 sunny days a year with almost five hours of sunlight each day. That puts the state in the middle of the average insolation for all US states. However, the amount of sun isn’t the only factor that dictates the effectiveness of your solar system.
It’s important to factor in the panel angle and orientation as well as shading. These are the criteria used when estimating total electricity production over a specific period.
To take full advantage of the sunny days you get, the system needs to be professionally installed. If you’re in an area with a lot of shading, including micro-inverters will boost your power output.
Of course, the more powerful your system, the more energy it’ll produce, assuming it’s well-positioned and professionally installed. Here’s a quick overview of the solar system price based on its power output:
- 3kW – $8,500
- 4kW – $11,300
- 5kW – $14,200
- 6kW – $17,000
- 7kW – $19,800
- 8kW – $22,700
- 9kW – $25,500
- 10kW – $28,400
Note that these prices are before applying the incentives and rebates. And if you get a 5kW system, which is about enough to cover the average household needs, you can save thousands.
After using the Investment Tax Credit, the system costs $10,500 instead of $14,200.
What Solar System Should Your Get?
The quick answer is – get the best one that’s within your budget and don’t be afraid to spend a bit more for better equipment and installation. All the money you invest will pay dividends in the long run and remove additional maintenance costs.
Moreover, you need a system that’s custom to your home. The great thing is that you can now customize every element to fit your needs. That applies to batteries, inverters, solar panels, racking systems, etc. And you can even match it to the aesthetics of the house.
As hinted, premium systems come at a premium price, but you also get the best warranties, including some maintenance.
With that said, going slightly above your needs and choosing top equipment is okay. But the key criteria are your household needs. Aim to balance that with the system’s efficiency to get the best bang for your buck.
Also, consider the type of solar panels – polycrystalline or monocrystalline. Polycrystalline panels are cheaper, but they aren’t as efficient as monocrystalline.
However, the lower efficiency doesn’t necessarily make them a subpar choice depending on your household needs.
Lastly, you should be careful when choosing the installation company. Getting a really low quote may sound great, but you’ll probably end up with a subpar system with a questionable warranty.
Remember, a solar system is a long-term investment. Ideally, you’ll stay with the same company for the next two decades to run regular maintenance and upkeep. Therefore, it’s best to pay a bit more to ensure you’re getting the best possible installation.
Trust Solar
What’s the cost of solar in Maryland?
The average price Maryland residents pay is $14,200, but that’s before all the rebates and credits. It’s safe to say that solar sets you back less than $10,000 when you factor in the incentives.
Basically, you get to make your home greener, more efficient, and save a lot of money for the price of a relatively decent used car. It’s hard to beat that, right?