Clean Energy Production Tax Credit (Personal)

June 05, 2019


NOTE: Senate Bill 936 (Maryland Clean Energy Incentive Act of 2016) extended production tax credit for two years, from December 31, 2015 to December 31, 2018. 

Maryland offers a production tax credit for electricity generated by wind, solar energy, hydropower, hydrokinetic, municipal solid waste and biomass resources. Eligible biomass resources include anaerobic digestion, landfill gas, wastewater-treatment gas, and non-hazardous segregated waste material derived from forest-related resources (excluding old-growth timber and mill residues consisting of sawdust or wood shavings)*, from waste pallets and crates, or from agricultural sources. The list of eligible resources is generally the same as those eligible for the federal renewable electricity production tax credit (PTC), except the Maryland law contains added provisions related to biomass and biogas technologies. To qualify for the tax credit, the facility that uses qualified energy resources to generate electricity must be placed in service on or after January 1, 2006, but before January 1, 2019. 

The tax credit has been in place since 2000, and has been amended several times since the initial enactment. The most recent substantive amendments were made in May 2016 by S.B. 936 (effective July 1, 2016), which extended the tax credit for 2 years, from December 31, 2015 to December 31, 2018. On May 2011, the definition of eligible waste materials was amended by S.B. 958 to remove language requiring that such materials be "solid" and "cellulosic".

An individual or corporation that applies for and receives certification from the Maryland Energy Administration (MEA) may claim a credit equal to 0.85 cents per kilowatt-hour ($0.0085/kWh) against the state income tax, for a five-year period, for electricity generated by eligible resources. As a result of H.B. 494, effective July 1, 2010 the MEA is no longer permitted to issue initial credit certificates for amounts of less than $1,000. At the general renewable energy credit rate of $0.0085/kWh, a facility would need to produce 23,530 kWh annually to meet this minimum. The electricity generated must be sold to an unrelated person during the taxable year. The MEA indicates that a net metering or interconnection agreement is sufficient documentation for this requirement.

Certificates issued by the Maryland Energy Administration will state the maximum amount of credit over a five-year period; the earliest tax year for which the credit may be claimed; and the five-year period during which qualifying electricity generation qualifies for the tax credit. The maximum amount of credit is based on estimated annual energy production during a five-year period, or $2.5 million. Formerly, credits exceeding a taxpayer's state income tax for a taxable year could be carried forward to succeeding taxable years for up to 10 years. However, as a result of H.B. 494, credits in excess of income tax for a taxable year are now refundable.

The program previously included yearly $25 million statewide cap to fund the program, however, starting 2016, the program will be funded through the reserve fund established by S.B. 958. The amount of credits the Maryland Energy Administration can award will depend on the amount of money appropriated to the reserve fund. There is no requirement for any specific amount of funds to be appropriated for the reserve fund. 

Applications for credit certificates will be approved on a first-come, first-served basis. If, over a three-year period, a taxpayer does not claim on average at least 10% of the maximum credit amount stated in the certificate, the Maryland Energy Administration may cancel part of the certificate. 

Further information on certificate applications and other program rules is available from the program website link at the top of this page.

* Eligible mill residues include bark, chips, slabs, and edging, although slabs and edging are usually made into chips.

Program Overview

Implementing Sector: State
Category: Financial Incentive
State: Maryland
Incentive Type: Personal Tax Credit
Web Site:
Administrator: Maryland Energy Administration
Start Date: 01/01/2006
Eligible Renewable/Other Technologies:
  • Geothermal Electric
  • Solar Thermal Electric
  • Solar Photovoltaics
  • Wind (All)
  • Biomass
  • Hydroelectric
  • Municipal Solid Waste
  • Landfill Gas
  • Tidal
  • Wave
  • Ocean Thermal
  • Wind (Small)
  • Anaerobic Digestion
Incentive Amount: $0.0085/kWh
Maximum Incentive: $2.5 million (total credits allowed during five-year period)
Eligible System Size: No specific system size restrictions; however, the initial credit certificate minimum is $1,000
Carryover Provisions: Credits are refundable


This program has 1 incentives
Technologies: Geothermal Electric, Solar Thermal Electric, Solar Photovoltaics, Wind (All), Biomass, Hydroelectric, Municipal Solid Waste, Landfill Gas, Tidal, Wave, Ocean Thermal, Wind (Small), Anaerobic Digestion
Sectors: Commercial, Agricultural
Parameters: The incentive is 0.01 $/kWh (5 years)


Name: Md. TAX-GENERAL Code § 10-720
Date Enacted: 05/11/2000
Effective Date: 07/01/2000
Name: COMAR 14.26.05
Effective Date: 12/12/2012 (most recent amendments)
Name: Maryland Clean Energy Incentive Act of 2016
Date Enacted: 05/19/2016
Effective Date: 07/01/2016
Expiration Date: 12/31/2018


Name: Chris Rice
Organization: Maryland Energy Administration
Address: 60 West Street, Suite 300
Annapolis MD 21401
Phone: (410) 260-7207
Name: David St. Jean
Organization: Energy and Sustainability
Address: 301 West Preston Street
Baltimore MD 21201
Phone: (410) 767-4472

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.