Federal Investment Tax Credit:
The Investment Tax Credit (ITC) is currently a 30% federal tax credit claimed against the tax liability of residential and commercial investors in solar energy. The residential ITC can be used when homeowners purchase solar systems outright. It allows the homeowner to apply the credit to his/her personal income taxes. For the commercial ITC, the business that installs, develops and/or finances the project, claims the credit.
Find out more about the residential ITC and commercial ITC.
Interconnection Tax Credit Eligibility
To maintain tax credit eligibility, projects are prohibited under the One Big Beautiful Bill Act from utilizing components, materials, or control from a prohibited foreign entity (“PFE”) or foreign entity of concern (“FEOC”). Projects seeking a tax credit must satisfy a Material Assistance Cost Ratio (“MACR”) representing the percentage of non-PFE sourced components. On July 30, 2026, the Public Service Commission of Maryland issued Order No. 92555 in Case No. 9778 and Public Conference 73, and directed Maryland electric utilities, including SMECO, to provide interconnection customers, upon written request, with the information and certifications reasonably necessary to demonstrate FEOC compliance for qualified interconnection property.
An interconnection customer may submit a written request to FEOCCompliance@Smeco.coop to request documentation that may be necessary to demonstrate FEOC compliance for qualified interconnection property. Depending upon the nature of the request and amount of work required of SMECO to provide the requested documentation, SMECO may charge the requesting interconnection customer for the reasonable labor and administrative costs associated with retrieving the requested documentation. In such a case, SMECO will notify the requesting interconnection customer of the estimated cost prior to performing any work.
The information provided above and that may be provided by SMECO to an interconnection customer in the manner directed by the Commission is for general guidance purposes only and does not constitute formal professional tax or legal advice. An interconnection customer should consult with a professional tax and/or legal advisor regarding FEOC compliance and tax credit eligibility as they may pertain to a particular project or situation.
State Incentives:
The Maryland Energy Administration (MEA) encourages Maryland homeowners and businesses to invest in clean energy by providing grants for solar PV and solar water heating systems among other technologies
For More Information:
The U.S. Department of Energy has created a website called DSIRE (Database of State Incentives for Renewables and Energy), which includes summaries of all federal, state, and local tax and other incentives for each state.