Clean Energy Incentive Act (Personal Credit)

February 18, 2005


The Maryland Clean Energy Incentive Act, which went into effect on July 1, 2000, provides Maryland sales tax exemptions or income tax credits when purchasing certain qualifying high efficiency Energy Star appliances, electric and hybrid-electric vehicles, and certain renewable resource energy systems. An individual or a corporation may claim a state income tax credit of 15% of the total installed cost of a solar water heating or photovoltaic system. The maximum credit is $2,000 for a PV system and $1,000 for a for solar water heating system. The unused amount of the credit for any taxable year may not be carried over to any other taxable year. Eligible systems must meet performance, quality standards, and certification requirements specified by the Maryland Energy Administration. Swimming pool and hot tub systems are excluded. In addition, the Act also provides for a personal or corporate income tax credit for the production of electricity from commercial and industrial waste, forestry (excluding old growth residue) and agricultural by-products, and landfill and anaerobic digestion biogas. The credit is 0.85¢/kWh (or 0.5¢/kWh for electricity generated in a co-fired plant). The electricity must be sold to an unrelated party to take advantage of the credit. The unused amount of the credit may be carried forward and applied for succeeding taxable years for up to ten years. In April 2004, legislation was enacted to create a solar energy grant program that will provide financial incentives to homeowners and businesses that install solar energy devices. The new law will take effect on January 1, 2005, replacing this expiring "clean energy incentives" tax credit provision for solar. The new Solar Energy Grant Program will be run by the Maryland Energy Administration, and it will provide grants for solar energy and solar water heating equipment as follows: · The lesser of $3,000 or 20% of the cost for solar electric (photovoltaic) producing equipment on residential property; · The lesser of $5,000 or 20% of the cost for solar electric (photovoltaic) producing equipment on non-residential property; and · The lesser of $2,000 or 20% of the cost for solar water heating equipment.

Program Overview

Implementing Sector: State
Category: Financial Incentive
State: Maryland
Incentive Type: Personal Tax Credit
Web Site:
Administrator: Maryland Energy Administration
Start Date: 7/1/00
Eligible Renewable/Other Technologies:
  • Solar Water Heat
  • Solar Space Heat
  • Solar Photovoltaics
  • Biomass
  • Landfill Gas
Incentive Amount: 15%
Maximum Incentive: $1000 for solar thermal; $2000 for PV


Name: Maryland Code: Tax - General § 10-719 -- 10-720
Date Enacted: 7/1/2000
Effective Date: 7/1/00
Expiration Date: 12/31/2004


Name: Tim LaRonde
Organization: Maryland Energy Administration
Address: 1623 Forest Drive, Suite 300
Annapolis MD 21403
Phone: (410) 260-7539
Name: Louise Collins
Organization: Comptroller of Maryland
Annapolis MD 21411-0001
Phone: (410) 260-7980

This information is sourced from DSIRE; the most comprehensive source of information on incentives and policies that support renewables and energy efficiency in the United States. Established in 1995, DSIRE is operated by the N.C. Clean Energy Technology Center at N.C. State University.