Under the program, the MEA may award up to $750,000 in annual energy storage tax certificates for behind-the-meter storage systems installed on residential or commercial premises during the tax year (January 1 through December 31, 2020) on a first come, first served basis. Of these funds, $300,000 are slated for residential taxpayers. In the residential category, the income tax credit certificates equate to the lesser of 30 percent of the total installed cost of the battery storage system or $5,000 for a storage system installed in a taxpayer’s primary residence.
While the program may appear modest, the compounded incentives in Maryland indicate advantageous project economics for behind-the-meter residential storage. In addition to the storage standalone tax credit, a residential taxpayer who installs solar also benefits from the Federal Residential Renewable Energy Tax Credit which allows taxpayers to claim a credit of 26% of qualified expenditures for a solar energy system that serves a residence when installed in 2020. Furthermore, for residential photovoltaic systems (PV) of at least 1 kw-DC, the Maryland Residential Clean Energy Rebate program awards $1,000 per project.
Compounded by time-of-use (TOU) rates, a net metering program and lack of high demand charges, the highly advantageous economics of residential battery storage systems should encourage increased deployment. As of April 15, 2020, the program had approximately 94 percent of the total tax credit allowance for 2020 available — $266,370 available for residential tax credits.
At sonnen we value Maryland’s legislative foresight and commitment to the resiliency of the grid, and we feel it is our responsibility to help guide our partners in utilizing and implementing this program to its fullest potential. Through grassroots engagement, we are providing sales assistance, key marketing resources, and continuing education to assist our partner base in navigating market drivers such as the Maryland Energy Storage Income Tax Credit. Reach out to your local sonnen representative or contact us to learn more about this program, and be sure to attend our upcoming trainings.
For more information on the Maryland Energy Storage Income Tax Credit and how to apply, visit https://energy.maryland.gov/business/Pages/EnergyStorage.aspx.