Maryland is an ambitious participant in the US solar energy industry, listed as 17th in the Solar National Ranking. With an installed capacity of 1,288.70 MW, Maryland generates enough solar energy to supply 4.23% of its power consumption, being able to power 147,244 homes. The installed solar capacity in Maryland is comprised of several solar farms and over 73,000 certified residential installations.
The price of solar systems in Maryland declined by 45% in the last 5 years, making it easier and cheaper for residential customers to install solar systems in their homes. Maryland plans to increase its installed solar capacity by 62.44 MW in the next 5 years. Being an ambitious player in the solar industry, Maryland plans to produce 50% of its energy from renewable sources like solar energy by 2030 and 100% of it by 2040.
What you should know about Solar Energy in Maryland
While citizens in Maryland belonging to municipal electric systems and rural cooperative systems cannot choose their electricity supplier, this is not the case for most residents. Even though local electric companies are still the ones in charge of delivering electricity to most homes, you are now able to choose which company generates the electricity you consume.
Some of the biggest electricity companies in Maryland are First Energy, Baltimore Gas and Electric Company (BGE), Delmarva Power & Light Company, Potomac Electric Power Company (Pepco), The Potomac Edison Company, and many others. Most of the companies that distribute electricity in Maryland are required by the Maryland Public Services Commission (PSC) to regulate their utility rates, charges, and rules, following the PSC mandates.
Considering these regulations, most of the companies have similar electricity rates. It is important for Maryland residents to properly choose their electricity company depending on what is best for them. While some companies have fixed electricity rates, others vary their rates on monthly basis.
Maryland residents usually pay electricity bills 20.56% more expensive than the national average. This state has an average electricity rate of 12.84 ¢ per kilowatt-hour consumed, which is 8.08% higher than the national average, positioning MD as the 15th state in the national rank.
Considering that using renewable energy reduces greenhouse gas emissions and decreases the cost of electricity bills, solar energy is on-demand in this state. Many Maryland residents are currently opting to install rooftop solar systems that provide them with enough energy to supply part or all of their household energy consumption.
Is it worth going solar in Maryland?
Due to high-cost electricity rates, elevated energy consumption, and the overall cost of monthly electrical bills in Maryland, going solar can be extremely beneficial for residents in this state. Maryland counts with a good potential to produce solar energy, being a state listed as the 17th in the Solar Power Potential Ranking according to the NDEE-Energy & Assistance Division.
With an average cost of 12.84 ¢/kWh, Maryland electricity rates are 32% higher than those in states like Washington, Idaho, Arkansas, or Louisiana, and the state electricity rates are even 8.08% more expensive than the national average. An average electricity bill in Maryland can cost around $127.92, which is 26% higher than bills in California, 35% than those in Washington, and even 69% higher than the ones in Utah.
The average Maryland home consumes up to 1,005 kilowatts-hour a month and 12,060 kilowatt-hours per year. Maryland ranks as the 40th state in the Energy Consumption Ranking, with average residential power consumption that can be 11.3% higher than the national average, which is 903 kWh/month.
An average 5 kW DC solar system installed at a home in Maryland can generate up to 7,000 kWh/year, supplying enough solar energy to cover 58% of the power needs for residents in the state. According to the National Renewable Energy Laboratory (NREL) database, an 8.7 – 9 kW DC rooftop solar system is the perfect fit to provide enough solar power for the average home power consumption in Maryland.
For rooftop solar systems of 8 – 9 kW DC, the price may vary from $22,079 to $23,913 before incentives. After the ITC incentive, the price reduces to $16,339 – $17,696, but the overall cost can be reduced even further after local incentives for residential photovoltaic (PV) systems in Maryland. The payback period for a system this size can be as fast as 6.1 to 7.5 years, after the investment return date you will still be saving money.
Considering the lifespan of a solar inverter which is the heart of your solar system, the average PV system can last around 25 years. For an energy PV system of 8 kW DC after 25 years, you would have saved on average up to $38,000, which is 232% of the cost of your solar system after incentives.
If you are considering going solar in Maryland, the time to decide is now. The most remunerative federal incentive gives you a 26% dollar-for-dollar reduction from the overall cost of your solar system, but this incentive is being reduced to 22% by 2023 and to 10% for future years. Maryland residents that go solar by 2021 or 2022, will enjoy more profitable incentives than the ones that do it 2 or 3 years later.
How much energy will your solar system generate?
When deciding to go solar in Maryland and sizing your rooftop solar system, it is important to factor in the solar radiation levels. According to NREL, Maryland receives 3.05 – 6.4 kilowatt-hours per square meter a day depending on the month and geographical location within the state, positioning Maryland as the 17th state in the Solar Power Potential Ranking.
The levels of solar radiation measured in Maryland can be translated as 3 to 4.6 full hours of solar generation at maximum efficiency by your rooftop PV system. An 8.7 kW DC solar system in Maryland, can provide an annual power generation of 11,590 kWh up to 12,594 kWh in AC energy.
On average, Maryland homes consume around 12,060 kWh per year. For this power consumption rate, a medium-size solar residential system such as the 8.7 – 9 kW DC one, can provide enough solar energy to supply the electrical needs of the home for the whole year. A rooftop PV system this size may ensure yearly savings of $1,488.15 up to $1,617.06 in electrical utility bills.
Maryland allows for a wider size in solar system installations than other states do. Maryland residents can install solar systems that generate as much as 200% of their annual electricity consumption. With Net Metering, your excess generated power will be credited at full retail price for other electrical bills throughout the year. At the end of the 12-month billing cycle closing in April, you will be compensated for the excess power generated at the average annual commodity electricity rate.
Payment options for your PV system in Maryland
When deciding to install a rooftop solar system in Maryland, you can choose from several payment options. Depending on the payment plan you choose, you might be eligible for federal and local incentives that provide you with many remunerative benefits. To help you choose which one is the best plan for you, we will break down each payment option available for Maryland residents.
- Solar purchase/cash: A simple solar purchase with cash is the most straightforward payment plan to obtain your PV generation system. For this payment option, you obtain full ownership of your solar system and are eligible for federal and local incentives.
- Solar loan: A solar loan is the best method to finance the purchase and installation of your solar system. When choosing this payment plan, you can pick a financial institution for your loan, or in some cases, the solar company will provide you with a loan themselves. If you opt for a solar loan, you should look for the choice that provides you with the most benefits.
- Solar leasing: One of the most curious options to use solar energy is opting for Solar Leasing. In this method, you pay monthly rent or lease for the installed solar panels, with the price being calculated depending on the size of the rooftop solar system. For this option, you do not have ownership of the PV system nor are eligible for local or federal incentives.
- Solar Power Purchase Agreement (Solar PPA): A Solar Power Purchase Agreement or Solar PPA, consists of installing a PV system in your home while you make direct payments for the energy you consume as if the solar company was your electric utility company. This option allows you to consume energy free from greenhouse gas emissions, at a lower ¢/kWh rate than the regular electric rate, and without paying for the installation of the rooftop solar system.
What are the solar incentives in Maryland?
Maryland is an ambitious player in the solar industry, as such, it provides residents that install solar systems with regular federal incentives and some interesting local incentives. We will break down each of these incentives to further explain to you what are the financial benefits of going solar in Maryland.
Federal Solar Investment Tax Credit (ITC)
The Federal Solar Investment Tax Credit is the federal incentive for PV systems owners. This incentive provides a 26% dollar-for-dollar reduction of the overall cost of your solar system against your federal income tax, allowing you to roll over these tax reductions for several years.
The ITC will remain at 26% up to the end of 2022. In 2023 the incentive reduction will be lowered to 22% and to 10% for future years, which is why we recommend going solar by 2021 or 2022.
Solar Energy System Property Tax Exemption
Upgrading a home regularly increases the overall value of the property, which in consequence increases the federal and local taxes of a property. With the Solar Energy System Property Tax Exemption in Maryland, homeowners installing solar systems will be exempt from the increase in their home federal taxes and local property taxes.
Solar Panel System Sales Tax Exemption
When purchasing most products, Maryland residents pay the regular 6% in sales taxes that are common throughout the US. After applying for the Solar Panel System Sales Tax Exemption, MD residents are allowed to reduce the overall cost of their whole rooftop solar system by 6%.
This incentive can be seen as a 6% discount for rooftop solar systems in Maryland. Adding this discount to the ITC would mean an overall discount of 32% for residential solar systems. To be eligible for this incentive in MD, the PV system must be installed in a residential property that is eligible for net metering.
Solar Renewable Energy Credits (SRECs)
The Maryland Solar Renewable Energy Credits (SRECs) is a program that encourages residents to install PV systems at their homes and at the same time helps the state achieve its ambitious solar goals. The program allows for rooftop solar system owners to earn 1 credit called SREC by every megawatt-hour (MWh) produced by their PV system. The credit can be later sold at the SREC trade market at a set price, by April 2021 the SREC bid price is at $77.50.
Residential Clean Energy Rebate Program (R-CERP)
The Residential Clean Energy Rebate Program (R-CERP) is an excellent opportunity to reduce the payback period of purchased solar systems of 1 – 20 kW DC in Maryland. The R-CERP allows residents acquiring new rooftop solar systems to be eligible for a $1000 solar rebate. Other installations like Geothermal and Solar Water Heating systems, are also eligible for the R-CERP rebate.
MD Net Metering program
The Maryland Net Metering Program works slightly differently than in other states by the end of the billing cycle. This is a billing mechanism crediting homeowners with installed rooftop solar systems for the excess energy they produce. With the MD Net Metering Program, you reduce the excess generated kWh from the consumption for future electrical utility bills within the same 12-month billing cycle, closing each April.
Net-metered generators that have excess credits in generated power at the end of each 12-month billing cycle will be compensated for the excess credit at the average annual commodity electricity rate. This means that for every kWh generated surpassing 100% of your consumption, you will be compensated for the credits at a rate lower than the full retail price.
Best Solar Companies in Maryland: Our top choices
When going solar, it is important to choose a solar company that provides you with benefits, discounts, and a proper installation with quality products. To assist you in picking your solar company, we compiled a list of our top choices. We considered the following criteria while choosing each company:
- The reputation of the company – considering reviews and level of client satisfaction.
- Quantity of solar projects and overall quality of the installations.
- Products provided by the company.
- Manufacturer partnerships and installer certifications.
- Warranty offered by the company for the workmanship and products.
Lumia solar is a solar installer company based in Maryland counting with a workforce with more than 10 years of experience. The company provides custom PV system designs that perfectly adapt to every electrical need of the Maryland residents.
When going solar with Lumia Solar you might request services for PV system installations, roofing, and even solar repairs & maintenance. This company provides solar panels and energy storage solutions from brands like Enphase Energy, Canadian Solar Inc., SolarEdge Technologies, REC, Silfab Solar, and even the popular Tesla Powerwall.
Solar SME, Inc. is a solar installation company founded in 2014 with an outstanding online reputation, providing a series of services like energy auditing, roofing, electrical contracting, and supplying your every need while installing a PV system. The company offers solar panels, energy storage systems, and advisory on energy efficiency in several states including Maryland.
When choosing Solar SME, Inc. as your solar installer company, you might choose from products by brands like Enphase Energy, SolarWorld, SMA America, IronRidge, Panasonic, LG Solar, OutBack Power, AXITEC LLC, APsystems, and Canadian Solar Inc.
Nova Solar is a solar installation company founded in 2012 with a workforce that has more than 15 years of experience. The company provides roofing, tree removing services, electrical contracting, and solar installations with quality products in the states of Virginia, Washington D.C., and Maryland with an outstanding 25-year workmanship warranty.
When choosing Nova Solar, you may acquire quality products from brands like Enphase Energy, IronRidge, LG Solar, SolarEdge Technologies, REC, OutBack Power, Silfab Solar, and Q CELLS. The company provides loan services in association with financial institutions like Dividend Solar, Sungage Financial, Sunlight Financial, and LoanPal.
GreenBrilliance LLC is a solar installation company founded in 2007 enjoying a high level of satisfaction by certified clients, ensuring a 10 years warranty for workmanship. The company provides custom solutions offering services of energy auditing, electrical contracting, roofing, repair & maintenance of PV systems, and solar installations.
The company provides solar panels and energy storage systems for clients alongside an advisory service that helps to increase energy efficiency. When choosing to install your PV system with GreenBrilliance LLC you will be able to opt for quality products from outstanding brands like Enphase Energy, SMA America, IronRidge, Panasonic, SolarEdge Technologies, Sonnen, LG solar panels, and LG Chem Storage Battery
Ipsun Solar is a local solar development company founded in 2016, providing solar designing and installation services in the states of Washington D.C., Virginia, and Maryland. The company offers a general variety of services like construction, community solar installations, solar repair & maintenance, and PV system installations.
The company provides solar PV, energy storage solutions, and advisory for the improvement of energy efficiency. Ipsun Solar associates with several loan financial institutions like Admirals Bank, Ipsun Power, Dividend Solar, Spruce Finance, and many others. The company works alongside brands like Enphase Energy, SolarWorld, Unirac, Inc., SolarEdge Technologies, Suniva, Inc., Siemens (EV), and Aerocompact.
Sunrun is a solar installation company with more than 17 years of experience in the area, offering custom-sized systems with designing and installation services for residents in Maryland and many other states. Alongside the PV installation service, Sunrun provides a quality service of repair & maintenance for PV systems.
Aiming for efficiency and a higher power generation for rooftop solar systems, Sunrun only uses monocrystalline PV modules in all of their installations. To ensure the best storage solutions for customers in the market, Sunrun also works with LG Chem and Tesla Powerwall.