Tax Credits
Federal and Maryland Tax Credits for Clean Energy and Efficiency
Homeowners can save up to $3,200 per year on the cost of energy-efficient home upgrades, covering up to 30% of eligible expenses under the federal Inflation Reduction Act. Maryland counties also offer various local tax credits for clean energy projects. Explore what’s available for your situation.
Under the federal Inflation Reduction Act, homeowners can claim a tax credit of up to 30% of the cost of qualifying energy-efficient home improvements, up to $3,200 per year. Qualifying improvements include heat pumps, heat pump water heaters, insulation, windows, exterior doors, and home energy audits. These credits reset annually, meaning you can claim them each year you make qualifying improvements — allowing you to spread improvements over multiple years and maximize credits.
The Residential Clean Energy Credit allows homeowners to claim 30% of the cost of installing solar panels, solar water heating systems, battery storage, and other qualifying clean energy systems. Unlike the efficiency credits, this credit has no annual dollar limit. The credit applies to the total cost of the system including installation.
Maryland offers a $3,000 excise tax credit for qualifying zero-emission plug-in electric or fuel cell electric vehicles. This credit applies at the time of purchase and reduces the excise tax owed on the vehicle. An HOV permit is also available for EV drivers regardless of the number of passengers.
Maryland counties offer various local tax credits for clean energy projects. Available credits vary by county and may cover solar installations, energy storage systems, geothermal systems, and other qualifying improvements. Check with your county government or visit the Maryland Energy Administration website to find out what your county offers.
BeSMART Energy Efficiency Loans for homeowners are provided through the Maryland Department of Housing and Community Development and offer financing to improve energy efficiency. By replacing and upgrading appliances, heating, ventilation and cooling systems, and whole house envelope improvements, homeowners can save on their utility bills. This program has no income limits.
Looking for Rebates and Financing Too?
Combine tax credits with utility rebates and low-interest financing to maximize your savings on energy-efficient home upgrades.