Clean Energy Incentive Act (Personal Credit)

Summary

The Maryland Clean Energy Incentive Act, which went into effect on July 1, 2000, provides Maryland sales tax exemptions or income tax credits when purchasing certain qualifying high efficiency Energy Star appliances, electric and hybrid-electric vehicles, and certain renewable resource energy systems. An individual or a corporation may claim a state income tax credit of 15% of the total installed cost of a solar water heating or photovoltaic system. The maximum credit is $2,000 for a PV system and $1,000 for a for solar water heating system. The unused amount of the credit for any taxable year may not be carried over to any other taxable year. Eligible systems must meet performance, quality standards, and certification requirements specified by the Maryland Energy Administration. Swimming pool and hot tub systems are excluded. In addition, the Act also provides for a personal or corporate income tax credit for the production of electricity from commercial and industrial waste, forestry (excluding old growth residue) and agricultural by-products, and landfill and anaerobic digestion biogas. The credit is 0.85¢/kWh (or 0.5¢/kWh for electricity generated in a co-fired plant). The electricity must be sold to an unrelated party to take advantage of the credit. The unused amount of the credit may be carried forward and applied for succeeding taxable years for up to ten years. In April 2004, legislation was enacted to create a solar energy grant program that will provide financial incentives to homeowners and businesses that install solar energy devices. The new law will take effect on January 1, 2005, replacing this expiring "clean energy incentives" tax credit provision for solar. The new Solar Energy Grant Program will be run by the Maryland Energy Administration, and it will provide grants for solar energy and solar water heating equipment as follows: · The lesser of $3,000 or 20% of the cost for solar electric (photovoltaic) producing equipment on residential property; · The lesser of $5,000 or 20% of the cost for solar electric (photovoltaic) producing equipment on non-residential property; and · The lesser of $2,000 or 20% of the cost for solar water heating equipment.