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The Average Cost Of Solar Panel Installation In Maryland
- David Kranker
- Apr 29
- 7 min read
Updated: May 8
If you live in Maryland, switching to solar energy can be a financially wise move. Electricity rates in the state are higher than the national average, which makes solar power a smart way to cut long-term energy costs. By generating your own electricity, you reduce your dependence on the grid and protect yourself from rising utility prices. But before you start collecting quotes, it’s important to understand where your money is going.
Solar costs vary. Your final price depends on system size, panel efficiency, inverter type, roof layout, and the installer you choose. A typical Maryland homeowner might pay anywhere from $31,000 to $42,000 before incentives, depending on the setup.
Maryland offers strong incentives that lower those costs and speed up your return on investment. They include federal tax credits, cash rebates, performance-based rewards, and tax exemptions. Each one reduces your upfront cost or adds to your long-term savings. When you stack them together, they can shift the cost of going solar in your favor.
So what are you really paying for when you install solar panels in Maryland? How do the incentives impact the final cost? And what kind of savings can you expect over time?
Average Cost of Solar Panels in Maryland
The average Maryland home needs a 13.8 kW solar system to match its yearly electricity use. At current market rates, that system runs about $36,954 before applying any incentives.
Pricing can vary between $31,411 and $42,497, depending on the installer, the brand of equipment, roof angle, shading, and the electrical work required. A simpler installation with standard panels will land on the lower end. Premium panels, multiple roof faces, or electrical upgrades can push it higher.
The 30% federal tax credit cuts the cost by about $11,086 for most homeowners, lowering the out-of-pocket total to around $25,868. That’s before adding in state-level rebates, which can reduce the price further. These numbers show why it’s important to look beyond the sticker price: once the incentives are factored in, the investment becomes far more accessible.
Equipment: What You’re Paying For
The price of your system depends heavily on the equipment you select. Here’s what drives those costs.
Solar Panels
Panels come in varying wattages and efficiencies. For Maryland homes, choose panels that generate at least 450 watts per panel. Higher wattage panels make better use of limited roof space and produce more energy over time, while top-tier brands offer better warranties, slower degradation, and stronger performance in low-light conditions. That adds up to better long-term savings, even if the initial cost is higher.
Inverters
This component converts the solar panel’s DC electricity into the AC power your home uses. The inverter setup should match your roof's layout. For example, homes with shading or multiple roof angles may benefit from microinverters or power optimizers instead of a central string inverter.
Solar Battery (Optional)
If you want backup power during outages or to store excess solar energy, a battery system like the Tesla Powerwall or Enphase IQ Battery can be added. Batteries increase your project’s total cost but provide energy independence.
Maryland’s Solar Incentives
Maryland has built one of the most solar-friendly programs in the country. The state combines immediate cost reductions with long-term benefits, making solar power financially attractive for both middle- and lower-income homeowners. The incentives come from a mix of federal, state, and utility-driven programs, all structured to reduce your upfront cost and improve your long-term return. Here’s a closer look at the programs that directly impact your bottom line.
1. Federal Residential Clean Energy Credit
Value: 30% of your total system cost
Average Savings in Maryland: $11,086
This is the biggest incentive on the table. The federal government allows you to claim 30% of your system’s total cost as a tax credit. It applies to solar panels, inverters, wiring, permitting, and labor. If your total tax bill is smaller than the credit amount, the balance rolls over into future tax years until it’s used up. This credit applies to systems installed through 2032, which gives homeowners a strong reason to act while it's still available at the full 30% rate.
2. Solar Renewable Energy Certificates (SRECs)
Value: Varies, currently around $330/year
You earn one SREC for every 1,000 kilowatt-hours your system produces. These credits can be sold on a state-monitored market. Maryland utilities are required to buy SRECs to meet renewable energy targets, so prices are tied to supply and demand. A typical 13.8 kW system in Maryland might generate 15 to 17 SRECs per year, depending on sun exposure. At current prices, that’s around $330 annually, but in strong market conditions, it can be significantly higher.
3. Maryland Solar Access Program
Value: Up to $7,500
This program is aimed at income-eligible households and applies to both solar purchases and leases. If your household income falls within the specified thresholds, you could receive thousands of dollars in grant funding. The program can cover up to 50% of the system cost, capped at $7,500. This is a grant, not a loan, so no repayment is required. Funds are limited and awarded on a first-come, first-served basis. If you qualify, this program can cut your upfront investment in half.
4. Sales Tax Exemption
Value: 6% of system cost
Average Savings on a $35,000 system: $2,100
In Maryland, you don’t pay any sales tax on the purchase of a solar energy system. This exemption covers the full value of the project, including equipment and labor. It's an automatic discount at the point of sale. You don’t have to apply or submit any forms: your installer simply omits sales tax from the invoice.
5. Property Tax Exemption
Installing solar panels increases your home’s resale value, but in Maryland, that added value is excluded from property tax assessments. This means you pay the same property taxes you paid before installing solar, even though your home is worth more. In a state with a property tax rate of about 1.05%, avoiding a $10,000 increase in assessed value saves you over $100 per year, every year.
Combined, these programs can lower a $36,000 system to under $25,000 out of pocket. Factor in SREC income, utility bill reductions, and avoided taxes, and your system can pay for itself in just over eight years, with decades of savings to follow. The key is timing: incentive funds are limited, and application windows can close without warning. If you're considering solar in Maryland, acting while these programs are still in place can lock in thousands in added value.
Incentive | Type | Value | What It Covers | Eligibility / Notes |
Federal Residential Clean Energy Credit | Tax Credit | 30% of total system cost | Panels, inverter, labor, permitting, and other installation-related costs | No income limit; unused credit rolls over to future tax years |
Solar Renewable Energy Certificates (SRECs) | Ongoing Credit Revenue | $330/year (varies with market) | Credit earned for every 1,000 kWh your system produces; can be sold for cash | Available to all solar owners; prices fluctuate with demand |
Maryland Solar Access Program | Income-Based Grant | Up to $7,500 | Covers up to 50% of total system cost for qualifying households | Income limits apply; funding is limited and awarded first-come, first-served |
Sales Tax Exemption | Tax Exemption | 6% of system cost ($2,100 avg) | Exempts solar systems from Maryland’s 6% sales tax | Automatically applied at point of sale; no action required |
Property Tax Exemption | Tax Exemption | Varies by home value | Excludes added solar value from property tax assessments | Applies to all residential solar installs statewide |
Financing Options for Solar in Maryland
Not every homeowner is ready to pay over $25,000 out-of-pocket for a solar installation. That’s why financing is a key part of going solar. Maryland homeowners have access to several flexible options that make solar more affordable upfront without giving up long-term value. Below are the three most common financing paths, each with pros and trade-offs.
1. Cash Purchase
Best long-term return
No interest or monthly payments
Paying in full upfront gives you complete ownership of the system from day one. You’ll qualify for all available incentives, including the 30% federal tax credit, Maryland’s $1,000 rebate, and ongoing SREC income. Because there are no loan fees or interest charges, your overall system cost stays the lowest, and your savings start building immediately. This option also adds the most resale value to your home since buyers tend to favor homes with fully owned solar systems.
2. Solar Loan
Low or zero upfront cost
Maintain full ownership
Solar loans spread the cost of your system over time, typically with terms ranging from 5 to 20 years. You keep ownership of the system, which means you still qualify for all tax credits, rebates, and SREC income. Many lenders offer $0-down options, making solar accessible without large cash reserves. Loan payments are often close to or even lower than your current electric bill, which makes it easier to manage monthly costs while still saving in the long run.
Look for solar-specific loan programs in Maryland that offer subsidized interest rates. If those aren’t available, home equity loans or lines of credit usually offer better terms than unsecured personal loans.
3. Solar Lease or Power Purchase Agreement (PPA)
No upfront cost
Third-party ownership limits your benefits
With a lease, a solar provider installs and owns the system. You pay a fixed monthly fee to use the energy it generates. With a PPA, you pay for the actual electricity produced at a set rate per kilowatt-hour, usually below the utility rate.
These options lower your monthly electric bill, but you don’t qualify for tax credits, rebates, or SREC income because you don’t own the system. Contracts usually last 20 to 25 years and may include annual price escalators, but if you go this route, review the contract carefully. Some leases and PPAs can complicate home sales or require additional fees if you want to exit early or transfer ownership to a buyer.
Which Option Is Right for You?
Choose cash if you want maximum savings and can afford the upfront cost.
Choose a loan if you want to spread out payments while still capturing full financial benefits.
Choose a lease or PPA only if you can’t qualify for financing and need a no-money-down option with predictable utility savings.
Each financing method has its place. The key is to match your financial goals with the right structure and understand what you're gaining or giving up in return. At Solair Green Energy Advisors, we can help you decide what financing option (and solar energy system) makes the most sense for your property.
Request Your Free Quote For Solar Installation In Maryland
If you live in Maryland, the math for solar makes a lot of sense. High electricity costs, strong incentives, and reliable net metering programs all work in your favor. The upfront price might seem high, but the long-term savings are substantial, and you won’t be subject to rising utility rates year after year.
Maryland has thousands of satisfied solar homeowners already, and there’s no reason you shouldn’t be next. Solair Green Energy Advisors is here to walk you through the numbers and connect you with trusted professionals who can carry out a successful installation. To get started, contact us today for a free consultation.
