Why electricity prices are set to increase in Maryland
Maryland’s energy landscape faces significant challenges. As a net electricity importer—meaning they import more electricity than they export—Maryland heavily relies on power from neighbouring states due to its limited energy generation and transmission infrastructure. This dependency leaves Maryland vulnerable to price hikes and supply disruptions. But it also makes the case for homeowners to shift towards solar energy as a way to achieve home energy independence far more compelling.
Starting in mid-2025, electricity prices in Maryland could rise between 2% to 24% depending on location, driven by the PJM (Pennsylvania-New Jersey-Maryland) Interconnection’s recent capacity auction. PJM is the regional organization that coordinates energy transmission throughout the Mid-Atlantic and Midwest regions. The annual capacity auction helps set rates for the coming year. Due to a reduction in reliable energy sources—mainly of gas and coal-fired power plants —compared to the previous year,along with PJM’s slow process of adding new generating capacity (mostly renewable), the available capacity was lower for this year’s auction, causing prices to spike significantly. This spike is being passed along to consumers.
For example, residents in Baltimore Gas and Electric service areas could see an additional 5% increase, bringing their total electricity bill hike to 19%. This would mean paying approximately $250 more per year for residential customers—on top of an estimated $1,316 pre-hike annual bill, bringing the new total to around $1,566 per year. Similarly, commercial customers could see an increase of about $2,700, raising their total bill from approximately $14,211 to around $16,911 per year.
Why Maryland needs solar
As Maryland continues to grapple with the need for new transmission lines and bringing more generating capacity online, the transition to home solar energy offers a faster, sustainable and cost-effective alternative. By generating your own electricity with solar panels, you can safeguard yourself against these impending rate hikes while reducing your reliance on an aging and strained energy grid.
Switching to solar now not only provides savings but also helps secure a more stable, resilient energy future for all Maryland homeowners and businesses.
Why utility rate hikes are incentive to pursue energy independence
In recent years, utility rates in Maryland have seen consistent hikes, making electricity more expensive for homeowners across the state. With rates expected to continue rising, the financial burden on families will rise with them, particularly during peak energy usage times. This makes investing in home energy independence even more practical.
By switching to solar energy, you can reduce your dependence on traditional utilities and lock in long-term savings.
In addition, solar customers in Maryland are eligible for net energy metering (NEM). NEM is a program that pays you annually for the excess power your solar energy system generates over the course of the year and is returned to the grid. So, if you have a solar system that, for example, generates 20 kilowatt-hours (kWh) in a day, but your home only uses 10 kWh for the day, your system will return that excess power to the grid, and your utility will credit you the retail rate for each of those kWh. Then, when you get to the times of year like fall and winter when your system produces less energy and your home uses more than it produces, those credits are used to offset what you pay for electricity from the grid.
Every April, your utility will do what’s called a true up, where they total all the electricity you drew from the grid, and all the energy your system put back into the grid, and determine if you drew more overall during the year than produced, or produced more than you drew from the grid. If you have an excess of production that you returned to the grid, your utility will pay you for that excess power at a rate that’s slightly lower than retail rate. Even though that rate is lower than retail, you’re still money ahead!
How battery storage complements solar for greater energy independence
Adding battery storage to your solar system is another great way to maximize your energy independence. Batteries let you store excess electricity generated by your solar panels during the day and use it during periods when your panels aren’t producing power, such as at night or during an outage. With already high electricity rates, this minimizes your need for electricity from the grid—especially during peak rate periods if you’re on a time-of-use rate plan—and protects you from future utility rate hikes.
For Maryland homeowners, solar plus batteries is a smart investment that ensures long-term savings and reliable energy during power outages.
Understanding Maryland solar incentives
One of the most attractive aspects of investing in solar panels in Maryland is the array of financial incentives available to homeowners. These incentives not only reduce the upfront cost of solar installation but also provide ongoing financial benefits over the lifetime of your system. Key incentives include:
Maryland Solar Renewable Energy Credits (SRECs): Homeowners earn SRECs for the energy their solar systems generate, which can then be sold to utility companies to offset costs. Maryland residents have the amazing opportunity to earn one Solar Renewable Energy Certificate (SREC) for every 1 megawatt-hour or 1,000 kWh of solar energy they generate. For example, a system producing 9,000 kWh of solar energy annually would receive 9 SRECs. What each SREC is worth varies based on market forces, but recent values were around $57, which would mean those 9 SRECs would be worth around $513. You can stay updated on the market price at SRECTrade.
Other state-wide solar incentives include:
Incentive Benefit Who does this apply to? Residential Clean Energy Rebate Program One-time rebate of $1,000 This rebate is available to homeowners who install a solar power system from 1 to 20 kW in size. - Federal Solar Investment Tax Credit (ITC): The federal solar investment tax credit presents an incredibly valuable opportunity for Maryland residents. While it may not take the form of a direct rebate, this credit offers the chance to deduct a substantial 30% of your total system cost from your income tax burden when you install solar. What's more, if you find that you can't utilize the entire credit at once, you have the flexibility to roll it over for up to five years. By taking advantage of this federal tax credit, you can significantly reduce your solar system cost, leading to a shorter payback period and increased energy savings in the long run.
- Net energy metering (NEM) in Maryland: As we noted earlier, Maryland law allows you to send excess energy your panels generate to the grid in exchange for energy bill credits. Maryland values these credits at the full retail rate of grid electricity, up to 100% of the amount of energy you draw from the grid over the course of a year. For excess generation above the amount of grid energy you draw, you’re paid at the wholesale rate for that energy.
- Local solar rebates: Many Maryland counties offer additional rebates for solar installations, further lowering the cost for homeowners. Maryland also has four counties that offer local solar property tax credits.
Tax exemptions: They lower your overall cost of ownership of the system, thus reducing the payback period of your solar system further.
Incentive Benefit Who does this apply to? Sales and use tax exemption for renewable energy equipment 6% of your solar system value The state sales and use tax does not apply when purchasing a solar energy system, leading to additional savings for homeowners. Property tax exemption for solar and wind energy 100% of property tax increases This exemption ensures that households do not face property tax increases due to installing a solar energy system.
These incentives make solar a realistic option for many Maryland homeowners, ensuring that the transition to renewable energy is both financially viable and environmentally responsible.
Choosing the right solar system
When considering solar power, selecting the right system is essential based on your home’s energy needs and available incentives. The solar system size should be tailored to your electricity consumption, ensuring it can meet your energy requirements year-round.
Additionally, many solar companies in Maryland offer battery storage solutions that complement solar panels and maximize energy efficiency. Enphase can help you achieve both, whether you’re looking to reduce your monthly bills, achieve greater energy independence, or both. Connect with us and we will connect you with expert solar installers offering Enphase solar and battery installation services.
Take control of your energy future with solar
With utility rate hikes on the rise, there’s never been a better time for Maryland homeowners to invest in solar panels, paired with battery storage. Solar energy offers a way to take control of your energy future, reduce your monthly utility bills, and contribute to a cleaner environment. By working with trusted solar power companies, you can ensure a smooth transition to energy independence and long-term savings.
Frequently Asked Questions
How much does solar installation cost in Maryland?
The cost of solar installation varies depending on the size of the system and available incentives. Homeowners can reduce costs and shorten payback times by taking advantage of state rebates, SRECs, NEM, and the Federal ITC.
What are Maryland’s solar incentives in 2025?
Maryland offers several solar incentives, including SRECs, NEM, the Federal ITC, and local rebates, making it more affordable for homeowners to install and save with solar.
Is battery storage worth it with solar panels in Maryland?
Yes, adding battery storage can maximize your energy savings by allowing you to store excess power and use it during non-sunny hours or outages, reducing reliance on the grid.
Can solar power eliminate my electricity bill in Maryland?
With the right-sized solar system and battery storage, homeowners can significantly reduce their electricity bills and, in some cases, eliminate them entirely.
How do I choose the right solar company in Maryland?
Research companies based on customer reviews, services offered, and expertise in local regulations. Consider getting quotes from multiple providers to find the best fit for your needs.
What is the federal solar tax credit?
The federal solar tax credit allows homeowners to deduct a percentage—currently 30%—of their solar installation costs from their federal taxes, making solar energy more affordable. If your federal tax burden is lower than 30% of the cost of your system, then the extra tax credit carries over to the following year.
How does solar impact property value in Maryland?
Installing solar panels can increase your home's value, as energy-efficient features are attractive to potential buyers. Additionally, the property tax exemption ensures you won’t face immediate tax increases due to added value.
