Howard County - Residential Solar and Geothermal Property Tax Credit

Summary

Note: In May 2011 the Howard County Council approved legislation (Council Bill 21-2011) effectively ending this incentive program. The enacted legislation limits the tax credit to property owners from which an application was received on or before May 25, 2011, or which had a contract in place on or before May 25, 2011 and submit an application by April 1, 2012. The legislation also increased the aggregate annual tax credit limit from $250,000 to $500,000 in order to help clear an extensive waiting list of property owners who have already been approved for tax credits.

Under the authority established by Maryland Property Tax Code § 9-203, Howard County allows county property owners to take a property tax credit for the installation of certain renewable energy devices. Real property owners may receive a property tax credit against the county property tax imposed on a residential structure that uses a solar or geothermal energy device. The amount of the tax credit is 50% of the eligible costs up to $5,000 for electricity generating or heat generating systems and $1,500 for a hot water supply system. These limits apply equally to both solar and geothermal devices. All equipment must meet safety and performance standards set by a nationally recognized laboratory for that kind of device.

The amount of credit applied in a tax year may not exceed the amount of property tax imposed for that year, but any amount not taken may be carried over for an additional two years. During a fiscal year, the total amount of all tax credits granted in the county is limited to $500,000 (doubled by from $250,000 in 2011). Eligible applicants should submit their applications on or before April 1st each year to receive a credit for the immediately following property tax year beginning on July 1st. Work must be completed in the 12 months prior to an application in order to be eligible for the tax credit. The program web site listed at the top of this page contains the application for the credit.

This local option tax incentive is unique because it is applied in the form of a credit -- not an exemption or exclusion, as in the case of most other property tax programs. The original 2006 legislation did not allow property owners to claim the tax credit for solar or geothermal electricity generating devices. These technologies were added as eligible in 2007.