Last Updated: May 19, 2026 | Reviewed by: Dylan DeSantis, SolarMetric
Quick Answer
Solar panels cost an average of $2.88 per watt installed in Maryland — $28,800 for a typical 10 kW system. The 30% federal residential solar tax credit was eliminated in July 2025. Maryland homeowners still have access to some of the best state-level incentives in the country: a $1,000 Clean Energy Grant, a thriving Solar Renewable Energy Certificate (SREC) market, full retail net metering, and complete sales and property tax exemptions. Payback periods run approximately 9–11 years.
⚠️ Federal Tax Credit Update (Important for 2026)
The 30% federal residential solar tax credit (Section 25D) was terminated by the One Big Beautiful Bill Act, signed into law on July 4, 2025. It no longer applies to solar systems installed on or after January 1, 2026. Homeowners who installed solar in 2025 can still claim the credit on their 2025 tax returns via IRS Form 5695.
For 2026 installations:
– Homeowner-purchased systems: No federal income tax credit available.
– Solar leases and PPAs: Installers retain the commercial ITC (Section 48E), potentially offering lower lease rates — but this is not a credit you receive directly.
– Battery storage: The federal residential battery credit was also eliminated. Maryland’s battery storage credit (see below) partially fills this gap.
Maryland Solar at a Glance
| Metric | Maryland Data |
|---|---|
| Average cost per watt | $2.88/W |
| Typical 10 kW system (installed cost) | $28,800 |
| Maryland Clean Energy Grant | $1,000 (MEA program) |
| Sales tax exemption (6%) | ~$1,728 savings upfront |
| Property tax exemption | Full exemption statewide |
| Net cost after grant + sales tax exemption | ~$26,072 |
| Average electricity rate — Maryland (2025) | $0.168/kWh |
| Average peak sun hours — Baltimore/DC suburbs | 4.5 PSH |
| Peak sun hours — Eastern Shore / Southern MD | 4.7 PSH |
| Net metering | Full retail rate (up to 2 MW) |
| SREC market | Active — ~$70–$90/SREC (2026 market rate) |
| Federal ITC for 2026 installations | Not available (Section 25D terminated) |
Cost data: EnergySage Maryland Market Report (May 2026). Rate: EIA residential average for Maryland (2025).
Cost by System Size in Maryland
| System Size | Installed Cost | After Sales Tax Exemption + $1K Grant | Annual Savings (Baltimore)† |
|---|---|---|---|
| 6 kW | $17,280 | $15,284 | $1,628 |
| 8 kW | $23,040 | $20,584 | $2,171 |
| 10 kW | $28,800 | $26,072 | $2,714 |
| 12 kW | $34,560 | $31,832 | $3,257 |
†Annual savings: system kW × 4.5 PSH × 365 days × 0.80 efficiency × $0.168/kWh (statewide average). SREC income not included in annual savings (treated separately below).
Maryland Solar Incentives in 2026
Maryland has the strongest state-level solar incentive stack in the Mid-Atlantic region. Even without the federal ITC, the combination of the MEA grant, SREC income, and tax exemptions makes Maryland one of the better solar markets in 2026.
Maryland Clean Energy Grant ($1,000)
The Maryland Energy Administration (MEA) Residential Clean Energy Grant pays $1,000 directly to homeowners who install a new solar system. The program is funded annually by the state legislature; applications are first-come, first-served and funds can run out. Apply at energy.maryland.gov immediately after your system is permitted and before installation if possible — or immediately after permission to operate is granted.
- Minimum system size: 1 kW
- Application: Online via MEA portal
- Payment: Check mailed within 60–90 days of approval
Maryland SREC Market
Maryland has a Renewable Portfolio Standard (RPS) requiring utilities to source a percentage of electricity from in-state solar. To comply, utilities purchase Solar Renewable Energy Certificates (SRECs) — and homeowners with solar earn one SREC for every 1,000 kWh their system produces.
Current SREC value (2026): Approximately $70–$90 per SREC on the open market (values fluctuate; check SRECTrade.com for current rates).
A 10 kW system in Baltimore producing ~13,140 kWh/year earns roughly 13 SRECs/year, worth approximately $910–$1,170 in annual SREC income on top of electricity bill savings. Over a 15-year SREC eligibility period, total SREC income could reach $13,000–$17,000.
SREC aggregators like Sol Systems, SRECTrade, and Flett Exchange handle the sale for a small commission (typically 5–15%). Most installers can set this up for you at the time of installation.
Maryland Sales Tax Exemption
Maryland exempts solar energy equipment from the 6% state sales tax. On a $28,800 system, that’s approximately $1,728 saved at purchase with no application required.
Maryland Property Tax Exemption
Maryland Tax-Property Article § 7-204 provides a full property tax exemption for residential solar systems statewide. The added home value from solar will not increase your property tax assessment. This exemption applies automatically and indefinitely for the life of the system.
Battery Storage Credit (Expiring)
Maryland’s residential energy storage tax credit provides 30% of battery storage system cost, up to $5,000 for individuals. This is a state income tax credit administered by MEA. The program has had funding limits in recent years; check MEA for current availability. This credit partially replaces the eliminated federal battery credit for Maryland residents.
Average Payback Period by Maryland Area
SREC income significantly shortens payback periods in Maryland — often by 2–4 years compared to states without an active SREC market.
| Area | Avg Rate | PSH | 10 kW Net Cost | Annual Savings | Annual SREC Income | Combined Annual | Payback |
|---|---|---|---|---|---|---|---|
| Baltimore Metro | $0.168/kWh | 4.5 | $26,072 | $2,714 | $1,040 | $3,754 | ~6.9 years |
| DC Suburbs (MoCo/PG) | $0.175/kWh | 4.5 | $26,072 | $2,835 | $1,040 | $3,875 | ~6.7 years |
| Annapolis / Eastern Shore | $0.168/kWh | 4.7 | $26,072 | $2,833 | $1,085 | $3,918 | ~6.7 years |
| Frederick / Western MD | $0.168/kWh | 4.5 | $26,072 | $2,714 | $1,040 | $3,754 | ~6.9 years |
SREC income: 13.14 SRECs/year × $79/SREC average (midpoint of $70–$90 range). SREC market prices fluctuate; rates shown are 2026 estimates.
Is Solar Worth It in Maryland in 2026?
Verdict: Strong Yes — Maryland has one of the best solar value propositions on the East Coast in 2026.
Maryland’s above-average electricity rates ($0.168/kWh vs. $0.139 national average), active SREC market, $1,000 grant, and comprehensive tax exemptions combine to produce payback periods in the 6–8 year range on systems that last 25+ years. Even with the federal ITC gone, Maryland remains a top-10 solar state nationally by financial return.
Solar makes the most sense in Maryland if:
– You have a south-facing roof with at least 600 sq. ft. of unshaded space
– Your monthly electricity bill exceeds $100
– You plan to stay in the home for at least 7 years
– You can access MEA grant funding before it runs out
Solar is a harder sell if:
– Your electricity bill is below $75/month
– You have significant shading from mature trees
– Your utility is PEPCO and you’re on a time-of-use rate that limits net metering value
What Affects Solar Cost in Maryland
Installer competition: Maryland’s dense population and strong incentives attract numerous installers. The Baltimore/DC corridor has among the most competitive installer markets in the Mid-Atlantic — use that leverage to negotiate.
Roof age: Maryland homes frequently have older roofs. If your roof is more than 15 years old, most installers will require an inspection and may recommend replacement before installation. Budget $8,000–$15,000 for a roof replacement if needed; this cost does not qualify for any remaining incentives.
Shading: Tree shading is common in suburban Maryland. Microinverters (Enphase IQ8 series) or DC optimizers (SolarEdge) mitigate shading losses but add $500–$2,000 to system cost.
Battery storage: Adding battery storage (e.g., Tesla Powerwall 3: ~$10,500 installed) is more attractive in Maryland than most states due to the state battery tax credit (30%, up to $5,000).
Top Solar Companies in Maryland
| Installer | Service Area | Key Strength |
|---|---|---|
| Sunrun | Baltimore, DC suburbs, Annapolis | Lease/PPA options, large installer |
| Palmetto Solar | Statewide | App monitoring, strong customer support |
| Solar Energy World | Statewide (Mid-Atlantic specialist) | Maryland-focused regional company |
| Ipsun Solar | DC suburbs / Montgomery Co. | Local company, high customer ratings |
| Lumina Solar | Baltimore, DC suburbs | Local MD/VA/DC specialist |
| SunPower dealers | Statewide | Premium panels, 25-yr warranty |
Compare Maryland Solar Installers → Get Free Quotes
Maryland Solar FAQ
How much does solar save on electricity bills in Maryland?
A 10 kW system in the Baltimore metro area saves approximately $2,700 per year in electricity costs. Add SREC income of $900–$1,200/year and total annual financial benefit is typically $3,600–$3,900 — one of the highest combined returns in the Mid-Atlantic.
What is an SREC and how do I sell mine in Maryland?
An SREC (Solar Renewable Energy Certificate) is a tradable certificate representing 1,000 kWh of solar-generated electricity. Maryland utilities purchase SRECs to meet state renewable energy mandates. You earn roughly 13 SRECs/year on a 10 kW system. Sell them through aggregators like SRECTrade, Sol Systems, or Flett Exchange — your installer can help set this up at installation.
Is there a federal solar tax credit in 2026?
No. The federal residential solar tax credit (Section 25D) was eliminated by the One Big Beautiful Bill Act (signed July 4, 2025) and does not apply to 2026 installations. Maryland’s Clean Energy Grant, SREC market, and sales/property tax exemptions are still fully available.
How do I apply for the Maryland $1,000 Clean Energy Grant?
Apply through the Maryland Energy Administration (MEA) at energy.maryland.gov. The program is first-come, first-served and funds can run out mid-year. Apply as early as possible — immediately after your system is permitted or after permission to operate is received.
Sources
- EnergySage Maryland Solar Market Report, May 2026
- U.S. Energy Information Administration (EIA) — Residential Electricity Rates, Maryland 2025
- NREL National Solar Radiation Database — Maryland peak sun hours
- Maryland Energy Administration (MEA) — Clean Energy Grant program details
- SRECTrade.com — Maryland SREC market prices, 2026
- Maryland Tax-Property Article § 7-204 — Solar Equipment Property Tax Exemption
- Maryland Code, Tax-General Article § 11-209 — Sales Tax Exemption for Solar Equipment
- Maryland Public Service Commission — Net Metering Rules
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See also: Solar Panel Cost Guide | Is Solar Worth It? | Solar Cost Calculator