by Jeff Blyskal

Last updated October 2023

Here are the tax credits and other incentives we could identify for the Washington area. Keep in mind that some programs come and go quickly. Check with your utility company and dsireusa.org for up-to-date info.

Note that if you lease, rather than buy, incentives usually go to the leasing company that installs and owns the panels on your roof, not you.

Federal tax credit: Uncle Sam will reimburse you 30 percent of what you paid for panels, equipment, storage devices, installation, and permits.

Net metering: If your system produces electricity that you don’t use, it’s pushed onto the grid, your meter spins in reverse, and your utility pays you for it. Even if you produce a lot more electricity than you use, you won’t get rich as a solar-electricity generator. The District limits generating capacity to no more than 140 percent of the electricity you used in the previous 12 months; Maryland’s limit is 200 percent and Virginia’s is 150 percent. And you won’t necessarily get paid at the same rates at which you’d buy electricity: If you are signed up on a time-of-use (TOU) rate plan, you’ll get charged higher rates during peak times, but solar-energy producers often get paid at non-peak rates. Finally, if you’ve built up a credit by the end of your annual billing period, utilities pay you for that at the “generation rate,” “commodity energy supply rate,” or “avoided cost rates,” which are far lower than the full retail rate you pay when you buy electricity.

District of Columbia Incentives

Solar Renewable Energy Certificates (SRECs): PEPCO currently pays about $385 per megawatt hour of electricity your system produces in a year, which is a very generous green benefit.

Rebates: Up to $10,000 for eligible low-income residents who have 3kW to 4kW systems installed on their homes by an approved contractor. Available until funding is exhausted on a paid first-come-first-served basis.

Property tax exemption: Any increase in your home’s value as a result of installing solar panels is exempt from property taxes.

Maryland Incentives

Rebates: The Residential Clean Energy Rebate Program pays $1,000 for qualified home solar energy systems.

Tax Credit: The Maryland Energy Storage Income Tax Credit Program provides a tax credit equal to 30 percent of the cost of a new home energy storage system up to $5,000.

Solar Renewable Energy Certificates (SRECs): PEPCO currently pays about $70 per megawatt hour of electricity your system produces in a year.

Property tax exemption: Any increase in your home’s value as a result of installing solar panels is exempt from property taxes.

State sales tax exemption: You won’t pay sales tax on your system.

Virginia Incentives

Property tax exemption: State law allows municipalities to exempt residential systems from taxation but doesn’t require them to do so. Check with your local assessor or city/county administrator.