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Dec 04 2025
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MARYLAND SOLAR INCENTIVES

What Solar and Battery Incentives Does Maryland Offer?

By Solar Incentives by State, Solar Rebates & Incentives No Comments

With a healthy offering of solar incentives, Maryland is an underrated state for saving money with home solar panels.

But with a combination of tax breaks, rebates, and solar renewable energy credits (SRECs), homeowners in Maryland can substantially reduce their energy costs and protect themselves from utility rate increases by installing a home solar system.

In this article, we’ll explore each of these incentives, how they would reduce the cost of a 5 kW system with a gross price of $25,000, and how paying for solar electricity compares to paying for grid electricity.

Compare multiple solar quotes from trusted Maryland-based installers.

What solar incentives does Maryland offer?

There are a handful of solar incentives in Maryland that can reduce the cost of buying solar panels.

  • Sales and property tax exemptions
  • The residential clean energy grant program
  • Solar renewable energy certificates (SRECs)
  • Net metering

Let’s see how they reduce the cost of a $25,000 solar system.

Solar sales and property tax exemptions in Maryland

The first incentive to kick in is a sales tax exemption on solar energy equipment. Given Maryland’s 6% sales tax rate, this amounts to $1,500 on a $25,000 system.

Maryland also has a property tax exemption that applies to the additional home value created by a solar system. So, you can expect your solar system to increase the resale value of your home, but you won’t have to pay state or local property tax on that value.

Maryland Solar Access Program (MSAP)

The Maryland Solar Access Program (MSAP) helps income-qualified homeowners reduce the cost of residential solar by offering state grants of up to $750 per kilowatt, capped at $7,500. For example, a homeowner installing a 5 kW solar system could receive approximately $3,750 in upfront incentives, significantly lowering out-of-pocket costs.

Eligibility generally requires the home to be owner-occupied, used as a primary residence, and household income to be at or below 150% of the Area Median Income. Systems must be installed by approved contractors, and funding is first-come, first-served through the Maryland Energy Administration.

Line item Cost
Gross cost $25,000
MSAP rebate -$3,750
Net cost $21,250

 

Maryland Solar Renewable Energy Certificates (SRECs)

The second biggest solar incentive in Maryland is the opportunity to earn and sell solar renewable energy certificates (SRECs). Registered solar systems earn one SREC for every 1,000 kW (1 MW) of electricity they produce. These certificates are sold to utility providers through brokers like SRECTrade and Sol Systems.

Like stocks on the New York Stock Exchange, the value of SRECs fluctuates based on the market. The certificates can be held for up to three years and, once registered, solar systems are eligible to produce SRECs as long as they produce electricity. As of December 2025, SRECs were valued at $50 each.

So, if our 5 kW system produces 6,400 kWh of electricity in a year, that would translate into 6 SRECs worth a combined total of $300.

It’s impossible to say where SREC prices will go. But, for easy math, let’s say the price averages $50 over the next seven years and our 5 kWh solar system produces 42,500 kWh of electricity.

Here’s how that impacts the net cost of our 5 kW system.

Line item Cost
Gross cost $25,000
Clean Energy Rebate -$3,750
Price paid $21,250
7 years of SRECs -$2,100
Net cost $19,150

Of course, the system will produce electricity and SRECs much longer than 7 years, but Maryland’s solar carve-out is currently scheduled through 2030, and it’s hard to say what will happen after that.

How to earn and sell SRECs in Maryland

  1. Register your system with the Maryland Public Service Commission (PSC) to become an eligible SREC generator
  2. Register your system in PJM’s Generator Attribute Tracking System (GATS) to track your generation and earn SRECs
  3. Sell your SRECs on aggregators like SRECTrade and Sol Systems

 

 

Net metering in Maryland

Net metering is a billing structure that allows solar owners to earn credit for the excess electricity that they push onto the grid. This credit can be used to offset the cost of electricity they pull from the grid when their solar panels aren’t producing.

Maryland has a strong net metering policy that requires utilities to credit solar owners for the full retail rate of electricity for solar exports. In other words, the value of electricity pushed onto the grid is equal to the value of electricity pulled off the grid. This 1-to-1 net metering structure is one of Maryland’s strongest solar incentives because it allows homeowners to completely replace their electricity bills with lower payments on their solar panels.

It’s worth noting that Maryland has a 3,000 MW capacity limit for net-metered solar systems, and 932 MW of that capacity was operational by October 2021. So, net metering won’t be available forever in Maryland, and it’s worth locking in this strong policy while it’s available.

Maryland battery storage incentives

More and more homeowners are adding battery storage to their solar systems to provide backup power during outages and further distance themselves from their utility provider. Maryland has a state incentive called the Energy Storage Grant Program. The state tax credit is worth 30% of the installed cost of the battery or $5,000, whichever is less.

This program’s funding was quickly reserved for Fiscal Year 2026 and is currently closed to new applications.

Let’s say you wanted to add 10 kWh of battery storage at an installed cost of $10,000. Here’s how the tax credits would combine to reduce the cost.

Installed cost $10,000
MD tax credit (30%) -$3,000
Net cost $7,000

 

Are solar panels worth it in Maryland?

With rebates, tax breaks, and SRECs, Maryland has more solar incentives than most states. Between these incentives and the rising cost of electricity, homeowners in the Old Line State stand to save tens of thousands of dollars by paying for solar panels instead of grid electricity.

By paying cash, a homeowner can maximize their lifetime savings potential. Taking out a 20-year solar loan reduces the overall savings, but can provide bill savings within the first few years.

 

 

Frequently asked questions

Can I get free solar panels in Maryland?

No, you cannot get free solar panels in Maryland, or any other state, for that matter. Ads for “free solar panels” are usually scams that mislead homeowners into signing long-term solar leases with escalating monthly fees.

While solar panels may not be free in Maryland, the state does have a handful of incentives that can substantially reduce the cost of solar equipment and battery storage.

Does Maryland buy back solar energy?

Maryland’s clean energy goals require utilities to buy a certain amount of solar renewable energy certificates (SRECs) per year. Solar owners in Maryland can earn SRECs with their solar production and sell them back to their utility provider. In December 2023, SRECs were valued at $57 each.

 

Dec 04 2025
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Prepaid Solar Leases & PPAs: A New Path for Going Solar in 2026

By Leasing Solar Panels: The Complete Guide, Solar Financing No Comments

A prepaid solar lease is a financing model where a homeowner pays most or all of a solar lease upfront—typically 70% of system cost—in exchange for long-term solar energy production at a fixed cost and the option to eventually own the system, while a third-party owner claims the tax credit and maintains the system during the lease term.

With the consumer-claimed solar tax credit now terminated, many homeowners are seeking ways to benefit from the business-claimed solar tax credit without locking themselves into a 25-year lease or Power Purchase Agreement (PPA).

Enter prepaid solar products—a fast-growing alternative that offers the benefits of a federal tax credit and a path to ownership without the long-term commitment. Once a niche option, prepaid solar leases and PPAs are surging in popularity after the passage of the One Big Beautiful Bill.

infographic showing the basic structure and benefits of prepaid solar leases and PPAs

How do prepaid solar leases and PPAs work?

In a prepaid solar lease or PPA, a third party owns the system, claims the tax credit, and agrees to monitor, maintain, and service the array during their hold period. The homeowner “prepays” for the value of the system, and after 6 years, has the option to take ownership.

    1. A third-party developer installs and owns the solar system.
    2. The homeowner prepays ~70% of system value upfront (or finances with a loan).
    3. The third party claims the 48E federal solar tax credit.
    4. The system operates as a lease/PPA for 6 years, with the third-party owner responsible for monitoring and maintenance.
    5. After the 6-year tax credit recapture period, the homeowner can choose to take ownership of the system.
    6. The homeowner owns the system with no payments and is responsible for monitoring and maintenance.

The pre-payment is typically at or close to 70% of the cost to install the system, so it provides a discount equivalent to the value of the tax credit, which homeowners can no longer access on their own. With payment collected upfront, the third-party investor has almost no risk in the system (other than performance risk), and they’re able to accept lower rates of return than an asset owner otherwise would for the lease or PPA paid monthly over 25 years.

In many cases, the prepayment doesn’t need to be done up front. The homeowner can take out a loan, spread the monthly payments out over time, and get Day 1 savings from their lease or PPA.

 

 

Prepaid lease and PPA products are similar in all but a few ways:

  • Lease payments are based on a consistent monthly payment to lease the equipment, while PPA payments are based on the system’s power production (which varies month-to-month)
  • The availability of leases and PPAs varies from state to state

Prepaid solar lease vs. Prepaid PPA

Feature Prepaid Solar Lease Prepaid PPA
Payment Upfront or financed with personal loan Upfront or financed with a personal loan
Billing Structure Lease of equipment Purchase of solar energy
Option to take ownership After 6 years After 6 years
Tax credit recipient Third-party owner Third-party owner

Related: What Is the Difference Between a Standard PPA and a Prepaid PPA?

Prepaid Solar Lease vs Purchase

In 2026, the key differences between prepaid solar products and purchasing solar are:

  • Access to a federal tax credit
  • Who owns the system for the first 6 years
  • Equipment selection

In a prepaid solar arrangement, the developer owns the system for at least the first 6 years while they claim and monetize the 48E federal tax credit. As such, they must adhere to Foreign Entity of Concern (FEOC) rules regarding equipment selection, and will likely have limited selection of premium, FEOC-compliant solar modules, inverters, racking, and battery storage.

In a solar purchase, the homeowner owns the system from the very beginning and equipment selection is restricted only by what’s available on the market. However, in 2026, there is no federal tax credit for homeowners to claim directly (hence the emergence of prepaid leases and PPAs!).

Prepaid Lease/PPA vs Purchase: Quick Recap

Prepaid Lease or PPA Solar Purchase
Federal tax credit in 2026? Yes No
Who owns the system initially Prepaid Provider Homeowner
Equipment selection Limited by FEOC rules No restrictions
How to pay upfront cost Cash or finance with loan Cash or finance with loan

Are Prepaid Solar Products Legal?

Yes. The U.S. tax code allows for prepaid PPAs and leases—as long as they are compliant with the statutory requirements of the underlying legislation.

However, not all prepaid solar products are created equal, and some take far more “liberal” applications on what’s eligible to be included as part of the tax credit and the underlying accounting treatment they use (i.e., allowing for the tax credit to be taken on back-end rebates or other inflated elements of the contract). While the homeowner isn’t necessarily at risk – that exists with the claimant of the tax credit – having your asset tied up in bankruptcy or litigation is messy and something no one should want to be in the middle of. For this reason, the solar.com team recommends following the old adage of “it seems too good to be true, it probably is.”

 

Considerations for Prepaid Solar Products

There are two big considerations for homeowners considering the prepaid route. The first is equipment selection. Because the third-party owner is claiming the tax credit, the system must conform to the rules and regulations for the 48E Clean Electricity Investment Credit, including restrictions on Chinese equipment known as FEOC. This means, as a homeowner, your ability to select your preferred technology may be significantly limited by the “approved vendor list” of the third-party owner.

The next consideration is whether the lender (if one is involved) knows about the prepaid structure and is comfortable with their position against the asset they’re using as collateral on the loan. We’ve seen some lenders enter into agreements with homeowners only to realize they’re not in “first position” when they file a lien, and then they demand payment in full, citing breach. This can put a homeowner in a terrible spot, and is why you should have a document, in writing, that says the lender knows who the prepaid counterparty is and that they accept this arrangement.

Pros and cons of prepaid solar leases & PPAs

Pros Cons
Lower upfront cost compared to buying a system outright Limited equipment choice due to FEOC and approved vendor restrictions
Immediate savings from discounted prepayment (typically 20-30% off system cost) Complex legal and tax structures that vary by provider
Eligible for tax credit through third-party owner, even though the homeowner can’t claim it directly Risk if the TPO provider uses aggressive tax positions that may create future complications
No long-term monthly lease or PPA payments after prepaying Availability is limited and not offered in all states
Ownership option after 6 years, providing long-term energy savings Lender conflicts may arise if financing the prepaid amount
Maintenance covered by the third-party owner during the hold period Homeowner responsible for maintenance after taking ownership of system
Easier to transfer in a home sale than a traditional lease/PPA Prepaid providers may be new or unproven, raising long-term reliability questions

 

 

Final Thoughts on Prepaid Products

Prepaid PPAs and leases are fantastic products for homeowners who want to own their array, while keeping their project eligible for the tax credit. Unlike a traditional lease or PPA, they forgo the 25 years of maintenance and guarantees – but the trade-off is greater savings and little to no restrictions on property transfer.

Unfortunately, prepaid products are currently relatively limited in the United States in where they can be sold, and the companies that offer them are relatively new. So, it’s a relative unknown if they’ll be around for the long haul.