Maryland
Financial Incentives
Tax Benefits: Maryland offers individuals and corporations a tax credit equal to 3 cents for each
gallon of bio-heating oil purchased for space or water heating, up to a maximum credit of $500.1
Tax credits are also available for individuals and corporations that produce energy from wind,
geothermal, solar, qualified hydropower, hydrokinetic, small irrigation power, municipal solid
waste, or biomass.2 In addition, the state offers tax credits for nonresidential and residential
multi-family buildings of at least 20,000 square feet that are constructed or rehabilitated to meet
U.S. Green Building Council or other similar criteria.3 Maryland has also established an excise
tax credit of up to $2,000 for the purchase of qualified plug-in vehicles.4 Maryland has a real
property tax exemption for solar PV, solar hot water, solar thermal, and residential wind energy
systems.5 Solar and geothermal heating and cooling systems are granted a special assessment
that makes their assessed value equivalent to a conventional system.6 Geothermal, solar, and
wind energy equipment is exempted from the state sales and use tax,7 and wood or “refusederived” fuel used for heating purposes is exempted from the state sales tax.8 Maryland will also
offer a three day sales tax holiday to purchasers of certain energy efficient appliances beginning
in 2011.9
Loan Programs: Maryland provides loans to nonprofits (including hospitals and private
schools), local governments (including public school systems and community colleges), and
businesses for energy efficiency improvements.10 Maryland also provides loans to state agencies
for energy efficiency improvements in state facilities.11 The Maryland Agricultural and
Resource Based Industry Development Corporation offers low-interest loans for energy
efficiency improvement to farms and rural businesses through the Rural Business Energy
Efficiency Improvement Loan Program, which receives funding from the state.12
Grants: Maryland offers grants for the purchase and installation of solar PV systems and solar
water heating systems,13 as well as for the installation of nonresidential wind energy systems
from 20 to 200 kW.14
Rebates: Maryland offers rebates for the installation of residential and nonresidential geothermal
heat pump systems,15 and for the purchase and installation of certain types of energy efficient
equipment by agricultural producers.16
Rules and Regulations
Renewable Portfolio Standard: Maryland’s RPS requires electricity suppliers to use renewable
energy sources to generate a specific percentage of retail electricity sales in the state from Tier 1
sources (solar, wind, biomass, methane, geothermal, ocean and small hydroelectric power plants)
and 2.5 percent from Tier 2 sources (other hydroelectric power plants). The Tier 1 requirement
increases gradually, reaching a level of 20 percent in 2022 and beyond. The Tier 2 requirement
sunsets in 2019. In addition, Maryland separately requires that electricity suppliers derive at
least 0.5 percent of their energy from solar electric sources in 2011, increasing to 2 percent in
2022.17
Facility Siting and Permitting: Maryland protects the right of property owners to enter into
solar easement agreements. Maryland also prohibits covenants that unreasonably restrict the
installation of solar collection systems.18
Building Codes, Appliance, and Equipment Standards: The Maryland Building Performance
Standards, which apply to residential and commercial developments, are mandatory statewide
and based on the 2009 IECC.19 Maryland has also adopted a series of policies for energy
efficiency in state buildings, including the Maryland High Performance Buildings Act, which
requires the construction and major renovation of state buildings to meet the LEED Silver rating
or a comparable rating.20 The state has also adopted minimum energy efficiency standards for
several appliances (however, some have been superseded by subsequent federal standards).21
Electricity Transmission, Interconnection and Storage: Maryland’s interconnection rules,
which employ a four-tiered approach, apply to DG systems of less than 10 MW for all types of
utilities.22 The state’s net metering law applies to all utilities and is available until the aggregate
capacity of all net-metered systems reaches 1,500 MW.23 System size is generally limited to 2
MW.
Government Procurement: Maryland law requires a 10 percent reduction in energy
consumption in state buildings by 2010, compared to 2005, and requires agencies to conduct an
energy consumption analysis for each building under their jurisdiction each year.24 In addition,
Maryland has set a goal for state agencies to procure at least 6 percent of their electricity from
renewable energy sources, including wind, solar PV, solar thermal, biomass, landfill gas, and
specified amounts of municipal solid waste.25 At least 50 percent of state vehicles must use a
minimum biodiesel blend of 5 percent.26
Policies, Plans, and Governmental Affiliations
Policies and Plans: Maryland’s Greenhouse Gas Emissions Reduction Act of 2009 sets a target
of reducing GHG emissions to 25 percent below 2006 levels by 2020 and requires that a task
force create and submit a plan for achieving this target.27
Government Entities: Maryland Commission on Climate Change,28 Maryland Department of
the Environment,29 Maryland Department of General Services,30 Maryland Energy
Administration,31 Maryland Public Services Commission.32
Regional Memberships: Maryland is a member of RGGI, ICAP, and the SGA.
1
Md. Code Ann., Tax-Gen. § 10-727; http://www.energy.state.md.us/Residential/bioheatGrant.html.
Md. Code Ann., Tax-Gen. § 10-720; COMAR 14.26.06;
http://www.energy.state.md.us/Residential/cleanEnergyGrants.html.
3
Md. Code Ann., Tax-Gen. § 10-722; COMAR 14.26.02; http://www.energy.state.md.us/Business/greenBuild.html.
4
Md. Code Ann., Transp. § 13-815.
5
Md. Code Ann., Tax-Property § 7-242.
6
Md. Code Ann., Tax-Property § 8-240; http://www.dat.state.md.us/sdatweb/procedures/014070010.htm.
7
Md. Code Ann., Tax-Gen. §11-230.
8
Md. Code Ann., Tax-Gen. § 11-207; COMAR 03.06.01.10.
2
9
Md. Code Ann., Tax-Gen. § 11-226; http://www.comp.state.md.us/shopmd/.
Md. Code Ann., State Gov’t § 9-20A-01 et seq.; http://www.energy.state.md.us/Govt/janeelawton.html.
11
http://energy.maryland.gov/Govt/stateLoan.html.
12
http://www.marbidco.org//loans/rbeeil.html.
13
http://www.energy.state.md.us/Business/midSizedSolar.html;
http://energy.maryland.gov/Residential/solarGrants.html.
14
http://energy.maryland.gov/Business/MidSizedWind.html.
15
Md. Code Ann., State Gov’t § 9–2008; COMAR 14.26.05;
http://energy.maryland.gov/Residential/geothermalGrants.html.
16
http://energy.maryland.gov/Residential/farmGrants.html.
17
Md. Code Ann., Pub. Util. Cos. § 7-701 et seq.; COMAR 20.61.01 et seq.;
http://webapp.psc.state.md.us/intranet/ElectricInfo/home_new.cfm.
18
Md. Code Ann., Real Property § 2-118; Md. Code Ann., Real Property § 2-119.
19
COMAR 05.02.07; http://mdcodes.umbc.edu/dhcd2/mbps.html.
20
Senate Bill 208 (2008).
21
Md. Code Ann., State Gov’t § 9-2006; COMAR 14.26.03; http://energy.maryland.gov/Policy/standards.html.
22
COMAR 20.50.09; http://webapp.psc.state.md.us/intranet/electricinfo/home_new.cfm.
23
Md. Code Ann., Pub. Util. Cos. § 7-306.
24
Md. Code Ann., State Finance and Procurement § 4-806; http://energy.maryland.gov/Govt/stateBuildAct.html.
25
Executive Order 01.01.2001.02.
26
Md. Code Ann., State Finance and Procurement § 14-408.
27
Senate Bill 278 (2009).
28
http://www.mdclimatechange.us/.
29
http://www.mde.state.md.us/.
30
http://www.dgs.maryland.gov/.
31
http://energy.maryland.gov/.
32
http://www.psc.state.md.us/.
10