Solar Calculator for Maryland: Costs, Incentives & ROI
Maryland has quietly built one of the Mid-Atlantic's more comprehensive solar policy environments, combining an active Solar Renewable Energy Credit market tied to a mandatory renewable portfolio standard, a full property tax exemption for residential solar installations, a sales tax exemption on solar equipment, net metering at the full retail rate, and a meaningful energy storage tax credit that rewards battery-paired systems. The Maryland Public Service Commission administers net metering rules that require investor-owned utilities — Baltimore Gas and Electric, Pepco, Delmarva Power, and Potomac Edison — to credit excess solar generation at the full retail rate for residential customers with systems up to two megawatts. Maryland's Renewable Portfolio Standard includes a solar carve-out requiring utilities to source at least 14.5 percent of retail electricity sales from solar energy, creating sustained demand for Solar Renewable Energy Credits that homeowners generate and can sell into the SREC market. Under Tax-Property Article §7-247, the full installed value of a residential solar system is excluded from property tax assessment, preventing counties from increasing a homeowner's real estate tax bill based on the added value solar provides. Maryland also exempts solar equipment purchases from the state sales and use tax. The state's electricity rates — among the higher in the Mid-Atlantic — make self-consumed solar particularly valuable, and the SREC market provides an additional revenue stream beyond bill savings. Use the calculator below to estimate your payback period and 25-year savings based on your ZIP code, utility rate, and system size.
Incentive data updated: May 2026(may be outdated)
Average Solar Cost in Maryland
Average installed solar costs in Maryland typically range from $2.75 to $3.25 per watt before incentives, based on Lawrence Berkeley National Laboratory Tracking the Sun data and EnergySage marketplace pricing for the Mid-Atlantic region. A typical six-kilowatt residential system therefore costs roughly $16,500 to $19,500 before the federal Investment Tax Credit — reflecting the Mid-Atlantic's higher labor and permitting costs, particularly in the Baltimore-Washington metro corridor where contractor density is high but permitting complexity from county to county can add administrative overhead. The thirty-percent federal ITC reduces that net cost to approximately $11,550 to $13,650. Maryland's sales tax exemption on solar equipment applies at the point of sale, eliminating the 6 percent state sales tax from the hardware and installation total. When SREC revenue is projected over the fifteen to twenty years of a typical SREC market participation, the effective system payback further improves beyond what the federal ITC and net metering alone provide. For homes in central Maryland with above-average sun exposure and a BGE or Pepco retail rate, effective payback periods in the seven-to-nine-year range are achievable when the full incentive stack is considered.
- Avg. installed cost
- $3.00/W
- Typical 6 kW system
- $16,500–$19,500
Top Solar Incentives in Maryland
Live incentive data not currently available for Maryland. See the federal incentive guidance via our Solar Tax Credit Calculator.
Electricity Rates in Maryland
Maryland residential electricity rates are moderately high by Mid-Atlantic standards, with the statewide average near 15 to 16 cents per kilowatt-hour according to EIA data — above the national average and comparable to neighboring Virginia and Pennsylvania. BGE customers in Baltimore and central Maryland typically pay a blended rate between 14 and 17 cents per kilowatt-hour when standard delivery charges are included. Pepco customers in the Washington DC suburbs — Montgomery and Prince George's counties — often fall in a similar range, while Delmarva Power customers on the Eastern Shore may see slightly lower blended rates. The relatively elevated retail rate in Maryland is the primary economic engine for solar bill savings, since each kilowatt-hour produced and consumed on-site avoids the full retail purchase price rather than being credited at a lower export rate. Maryland net metering applies the full retail rate to exported kilowatt-hours as well, meaning overproducing systems capture the same per-kilowatt-hour value whether the electricity is consumed in the home or credited to the bill. Rate trends have been upward in Maryland as utilities invest in grid reliability and clean energy transition infrastructure.
Peak Sun Hours in Maryland
Maryland averages between 4.5 and 5.0 peak sun hours per day across most of the state, placing it in a competitive range for Mid-Atlantic solar production despite its northern latitude. The coastal and eastern shoreline counties — including Worcester, Wicomico, and Somerset — benefit from slightly higher solar irradiance and clearer skies than the densely developed Baltimore-Washington urban corridor, where urban aerosol concentrations and more frequent overcast conditions reduce effective irradiance. Inland western Maryland, including Garrett and Allegany counties, sees the lowest in-state sun hours due to higher elevation and more persistent cloud cover. For the majority of Maryland homeowners in the central and suburban DC areas, 4.5 to 5.0 peak sun hours per day provides a strong production foundation — particularly when combined with south-facing roof orientation and minimal shading. NREL's PVWatts tool incorporates ZIP-code-level Typical Meteorological Year data, so the calculator above reflects localized sun exposure for your specific address.
Example ROI for a 6 kW System
- Estimated annual savings
- $1,450
- Payback period
- 8.5 years
- 25-year net savings
- $25,000
Run a personalized estimate with your ZIP code using the Solar ROI Calculator.
Major Cities in Maryland
- Baltimore21202
- Rockville20850
- Annapolis21401
- Frederick21701
- Gaithersburg20877
Common Questions About Solar in Maryland
What is the Maryland SREC market and how much can I earn from it?
Maryland's Solar Renewable Energy Credit market is created by the state's Renewable Portfolio Standard, which requires electric utilities to purchase a specified percentage of their retail sales from solar energy sources. Each megawatt-hour of solar electricity your system generates earns one SREC, which can be sold to utilities or SREC brokers through the Maryland market. SREC prices fluctuate based on supply and demand — historically Maryland SRECs have traded between $50 and $180 per credit, though prices vary with market conditions. A typical six-kilowatt Maryland system generates approximately six to eight SRECs per year. Homeowners typically work with an SREC aggregator or broker to sell their credits. SREC revenue represents an additional income stream on top of net metering bill savings and is separate from the federal Investment Tax Credit.
Does Maryland have a property tax exemption for solar panels?
Yes. Under Maryland Tax-Property Article §7-247, the full installed value of a residential solar energy system is excluded from property tax assessment. This means your county assessor cannot increase your real property tax bill based on the value that the solar installation adds to your home. A solar system that increases your home's market value by $15,000 to $20,000 will not raise your county property tax assessment by that amount — the added value is fully exempt. The exemption applies to the system hardware, installation, and any associated roof reinforcement directly required by the system. Homeowners should confirm the exemption is applied at assessment time by notifying the State Department of Assessments and Taxation if the exemption does not appear automatically.
What is the Maryland Energy Storage Tax Credit?
Maryland offers an Energy Storage Tax Credit that provides a credit against state income tax equal to 30 percent of the installed cost of an eligible battery storage system, up to a maximum of $5,000 for residential installations. The credit was established by HB 1296 and has been extended through subsequent legislation with annual program funding caps — once the annual cap is reached, applications are no longer accepted for that tax year. To claim the credit, homeowners must apply to the Maryland Energy Administration before the funding cap is exhausted. The storage credit can be combined with the federal Investment Tax Credit on a storage-plus-solar system, making the Maryland battery incentive particularly compelling for homeowners interested in backup power and enhanced solar self-consumption.
How does net metering work in Maryland?
Maryland's net metering program, governed by the Public Service Commission under COMAR 20.50.10, requires investor-owned utilities — BGE, Pepco, Delmarva Power, and Potomac Edison — to credit excess solar generation at the full retail rate on a monthly basis. Unused credits roll forward month to month and are reconciled at a twelve-month true-up. Remaining credits after the annualization period are either carried forward to the next twelve-month cycle or paid out at the utility's avoided-cost rate, which is typically lower than the retail rate. Maryland net metering currently applies to systems up to two megawatts — far above any residential system. The full-retail-rate credit is the key financial feature: a kilowatt-hour exported to the grid earns the same credit as a kilowatt-hour consumed from the grid would cost.
Are there sales tax exemptions for solar equipment in Maryland?
Yes. Maryland exempts solar energy equipment and related installation labor from the state's 6 percent sales and use tax. The exemption applies to photovoltaic panels, inverters, mounting hardware, wiring, and installation labor directly associated with the solar energy system. For a typical six-kilowatt Maryland system costing $18,000, the sales tax savings represent approximately $1,080 — a meaningful reduction in upfront cost. The exemption is applied by the solar contractor at the point of sale rather than through a subsequent rebate claim, so the homeowner's net invoice already reflects the lower taxable total. Maryland's sales tax exemption complements the federal ITC and SREC market to form one of the more complete incentive packages in the Mid-Atlantic region.