Is Solar Energy Cost Effective in Maryland?

A few short years ago, the cost of solar energy was twenty times more expensive than coal, putting it out of reach for most homeowners. The good news is that the price is more than 70% cheaper than it was in the last decade. Today, solar is the cheapest source of energy in the world — substantially less expensive than other fossil fuels, including coal and natural gas.

How Does Solar Energy Work in Maryland?

Solar panels are currently the most practical, effective way to harness the sun’s energy. The panels consist of connected rows of many photovoltaic cells, each made of two thin layers of a semiconductive material, usually silicon. Solar panels can be connected to create a solar array, and the larger the array, the more electricity is produced.

When sunlight hits the semiconductive material, it releases electrons that create a flow of electricity. The electricity travels through wires to an inverter and is converted from direct current (DC) electricity to alternating current (AC). The electricity enters your home, where it powers your lights, appliances, and other devices. Any excess electricity feeds to the electric grid.

What is the Cost of Solar Power in Maryland?

It’s difficult to pin down an exact cost of solar panels in Maryland, but the average cost of a MD solar panel installation is between $12,000 and $17,000, or about $2.75 to $3.05 per watt, after considering federal tax credits. The nationwide average is slightly higher, averaging approximately $2.50 to $3.50 per watt.

Keep in mind that state, local, and utility credits, grants, and incentives may reduce the price substantially, and a solar array generally pays for itself within seven to 10 years. Several other factors can affect the price, including:

• Labor costs in your area
• Peak sunlight hours in your area (approximately 4.5 hours per day in Maryland)
• Choice of panels
• Financing costs, if applicable
• Your average energy usage
• Roof type and age
• Available roof space

Why Do Solar Panels Make Sense in Maryland?

Installing solar panels makes a lot of sense for Maryland homeowners and businesses for four main reasons. Here’s why:

Sunny days: There is plenty of sunlight to justify installing solar panels, especially when you consider that Maryland receives more sunlight than Germany, the world’s solar power leader.

Marylanders enjoy an average of 202 sunny or partly sunny days per year, compared to 205 days nationwide. Not surprisingly, July through October see the most sun, at 20 or 21 days per month.

Average electricity costs: The cost of electricity in Maryland may be reason enough for homeowners to go solar. Electricity Local, an organization that tracks electricity rate and usage across the United States, reports that Maryland’s electric bills average about $129 per month — the fourth highest in the United States, or nearly 21% higher than the national average. 

Similarly, at nearly 13 cents per kWh, Maryland’s residential electricity rates rank 15th in the United States, about 8% greater than the average residential rate.

Boost your home’s value: One study indicates that homebuyers are willing to pay a four percent premium for homes with solar energy systems. Energy.gov says that homes with solar energy draw an additional $15,000 for an average-size house, although various factors will influence the price, such as your location and the age of your solar system. There is also evidence that homes with solar arrays sell faster.

Affordability: Only two decades ago, the idea of solar panels was wishful thinking for most homeowners. However, thanks to competition, innovations in technology, and generous incentives, solar energy is practical and affordable.

What Maryland Solar Incentives Are There?

Maryland solar incentives are a great way to save money on solar panel installation. For a comprehensive review of solar incentives in Maryland, see our guide Maryland Solar Incentives: Grants, Rebates, and Tax Credits.

Maryland’s Residential Clean Energy Grant Program provides $1,000 grants for homeowners who have installed solar photovoltaic or solar water heating systems.

Maryland solar rebates include the Maryland Commercial Clean Energy Rebate Program, which offers valuable incentives for non-profits, government offices, and businesses that “go solar.” 

State and local property tax exemptions: photovoltaic Solar energy systems are now exempt from both state and local real property taxes. The exemption applies to both commercial and residential properties.

High-Performance Building Property Tax Credits incentivize owners that build new buildings or modify existing properties. Structures must be certified as High Energy Performance buildings.

Your local electric company may offer grants or other incentives for customers who install solar energy technology.

What are Net Metering and Solar Renewable Energy Certificates (SRECs)?

Although most states currently allow net metering, Vote Solar and the Interstate Renewable Energy Council (IREC) note that a few states, including Maryland, have enacted “strong policies that empower energy customers to produce their own rooftop solar power.”

Net metering allows homeowners and businesses who generate solar energy to feed unused electricity back into the grid, where it is available for other customers. If your home is net-metered, you’ll have a special bidirectional meter that runs both ways, and you are billed only for your actual net use.

In other words, panels probably provide more than you need on sunny days in August. Credit for that extra energy can be “banked” by your utility company and used to offset the cost of energy when January days are short and dark.

Similarly, when Marylanders who own solar panels produce energy, they generate a solar renewable energy credit. They can opt to sell these credits to their utility. However, the value of Solar Renewable Energy Credit varies, depending on various factors, including supply and demand.

We can help you determine the current value of your credits, and if you’re interested in going this route, we’ll set up an automatic system so you can track and sell your excess power.

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