Solar Power in Anne Arundel County

Solar Tax Considerations in Anne Arundel County

Solar incentives have changed, so homeowners should evaluate current rules rather than rely on information from prior tax years. For expenditures made after December 31, 2025, homeowners who purchase and install a system outright can’t claim the former 30% Residential Clean Energy Credit under Section 25D, the federal tax code provision that previously covered qualifying residential clean energy expenses.

Third-party-owned systems structured through a lease or power purchase agreement may connect to Section 48E, a separate federal commercial clean electricity investment credit. That doesn’t mean the homeowner directly receives the credit. Tax treatment depends on system ownership, project structure, and applicable federal requirements.

Maryland and county provisions may include:

• Sales and use tax exemption: Maryland exempts qualifying solar equipment from state sales and use tax.
• Statewide exemption: Maryland exempts the added home value attributable to a solar installation from taxation.
• County credit: Anne Arundel County offers a one-time residential Solar Energy Property Tax Credit for eligible equipment. The credit is the lesser of 50% of qualifying materials and installation costs after other grants or credits, or $2,500.
• Application deadline: County credit applications generally must be filed by June 1 of the year before the requested tax year.

Eligibility depends on the property, equipment, ownership arrangement, filing date, and applicable program requirements. Homeowners should confirm current tax rules and application requirements before including an incentive in their financial calculations.

Solar Permits & Utility Connection Requirements

Permitting and utility approval are separate parts of a residential solar project. They affect whether a system can be installed and connected, but approval and activation schedules depend on the agencies and utility involved.

Solar building permits: Anne Arundel County requires a building permit for solar cell and panel installation. Permits are administered through the county’s Inspections and Permits office, and the project must complete applicable inspections before activation.

Maryland Net Metering

Eligible customers can receive bill credits for excess electricity their systems send to the electric grid. Maryland law requires electric companies to offer this billing arrangement to eligible customer-generators.

Under the existing program, a participating customer’s energy rates, rate structure, and monthly charges must match those available to a comparable customer without solar. Credits for excess generation can roll forward, though leftover amounts are typically cashed out annually depending on your utility. The program is scheduled to close to new customers when statewide capacity reaches 3,000 megawatts or on July 1, 2027, whichever comes first, with a replacement framework required for approval by February 1, 2027.