Maryland’s Energy Storage Tax Credit: A Model for the Nation

Source: Convergent

In 2017, Maryland became the first state in the country to create a tax credit for energy storage. The program, managed by the Maryland Energy Administration, provided a tax credit of up to 30% of the installed costs, capped at $5,000 for residential systems and $75,000 for commercial systems, with an annual statewide cap of $750,000. The credit was intended to be an incentive for the deployment of energy storage technologies and was available through the 2024 tax year. This bold move has reshaped the state's renewable energy landscape and positioned Maryland as a leader in innovation.

The Energy Storage Tax Credit has reduced the upfront costs of batteries for both homes and businesses, making renewable energy adoption much more economical. By incentivizing the integration of solar with batteries, the program supports both grid stability and energy independence. This financing has helped homeowners cut their bills, businesses secure reliable power, and developers scale projects faster.

Its impact does not stop at the border of Maryland, as other states look to adopt the model. Other states are now looking to replicate the model, recognizing how crucial storage is in the transition to clean energy. Besides, energy storage helps balance supply and demand and enables renewable energy to be utilized more effectively when the sun isn't shining or the wind isn't blowing.

For property owners, meanwhile, the tax credit ignited demand for land to host these innovative projects, developers busily seeking out locations to deploy solar and storage together in as impactful ways as possible.

Currently, the Maryland state income tax credit for energy storage systems is no longer available, as it expired at the end of 2024. It has been replaced by the new Residential and Commercial Energy Storage (RCES) Grant Program, which offers rebates instead of tax credits. 

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