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Buying solar and what it costs

Is solar worth it in Maryland without the tax credit?

Written by the Soleil Energy Corp Team Last updated Editorial guidelines

Vegetable garden and chairs below a house roof with solar panels at sunset.

Solar can still pay off in Maryland without the tax credit, but your roof and terms decide it. The federal credit ended for systems finished after December 31, 2025.1 In the model below, a cash buyer recovers the cost in 10.1 to 11.8 years if net metering offsets every per-kWh charge, or 14.2 to 18.1 on supply and transmission alone.2

Is solar worth it without the federal tax credit?

It’s worth considering when you can use the electricity it makes, keep the system long enough, and pay a price that matches that value. For a new homeowner purchase, the Internal Revenue Service (IRS) says the Residential Clean Energy Credit doesn’t apply to expenditures made after December 31, 2025.1

Paying early doesn’t save the credit. The IRS treats the expense as made when the original installation is completed, so a system finished after December 31, 2025 can’t claim it even if you paid on or before that date.1 When you compare proposals, ask each installer for a worksheet with the credit removed.

A lease or power purchase agreement is a different kind of deal. Compare the payments and the yearly escalator, then check who owns the equipment and the incentive rights, and what happens if you sell the house. The model below assumes you buy outright with cash. A lease, a loan or a credit claimed by someone else would need its own math.

How long does solar take to pay for itself?

In the cash-purchase model below, an assumed 8 kW system recovers its cost in 10.1 to 11.8 years when every per-kilowatt-hour charge is offset, and 14.2 to 18.1 years when only supply and transmission are.2 The shorter figure in each pair assumes electricity prices rise 3 percent a year; the longer assumes they stay flat.2

Which electricity value is closer to the truth? Maryland’s net-metering contract has to carry the same energy rates and rate structure as the standard tariff.3 Pepco’s net-metering rider applies to per-kilowatt-hour components and bills net consumption under the applicable distribution and supply schedules.4 For the model’s assumption that all generation offsets purchases, the full per-kWh case includes distribution and EmPOWER; the supply-and-transmission case is a conservative floor.54 Neither includes taxes, other riders or the monthly customer charge. A shaded, flat-price stress case appears further down.6

Illustrative calculation, not a quote or a Soleil project. Assumptions: production from a PVWatts run on October 17, 2026; payback math run October 25, 2026, for an assumed roof and a cash purchase. Everything the system generates offsets electricity you would otherwise buy, either right away or through credits you use later, and no year-end surplus is sold. That takes enough household demand and continued eligibility under the existing program.2

Input Value and source
System Assumed 8 kilowatts (kW) of direct-current (DC) capacity, built from 400-watt modules. No equipment brand and no real roof.2
Production 1,377.9 kilowatt-hours (kWh) per kW DC per year. This is the output of the National Laboratory of the Rockies’ (formerly NREL) PVWatts model, version 8.5.0, run for a Silver Spring point (latitude 38.9907, longitude -77.0261) with a roof mount, 20 degree tilt, due-south (180 degree) azimuth, 14 percent system losses, a DC to alternating-current (AC) ratio of 1.2 and 96 percent inverter efficiency. Enter those same inputs in the free PVWatts calculator to reproduce it.7
Installed price $3.00 per watt DC before incentives. Berkeley Lab’s August 2026 report charts a 2025 median of about $3.0 per watt (2025 dollars) for known cash-purchase residential systems, and the model rounds that to $3.00. It’s a national figure, not a Maryland quote.8
Electricity value, floor case $0.14782 per kWh, the supply plus transmission rate the Maryland Office of People’s Counsel (OPC) lists for Pepco under an October 2026 label, based on 900 kWh of monthly use.5
Electricity value, full per-kWh case $0.211718 per kWh: the floor rate plus Pepco’s volumetric distribution rate ($0.04328) and EmPOWER surcharge ($0.020618), from the same OPC page. It leaves out riders, taxes and the $8.44 monthly customer charge. These are Pepco numbers; OPC publishes the same breakdown for BGE and SMECO, and rates reset on a published schedule, so rerun the math with your own utility’s current page.5
Output decline 0.5 percent a year, the median in a 2012 National Renewable Energy Laboratory (NREL) review of published studies.9
Yearly costs $29.83 per kW DC per year, the fixed operations and maintenance estimate in NREL’s 2025 Annual Technology Baseline (a 2024 figure). The category covers component failure, so the model adds no separate inverter charge.10
Price change and horizon Electricity prices rise 0 or 3 percent a year over 25 years. Both are test cases.2
Incentives No grants, no homeowner credit and no solar renewable energy certificate (SREC) income in the base result.2

PVWatts estimates the output. Shade, roof direction, equipment and weather change the real number.7 The price and cost inputs come from different years, and the cost source doesn’t state its dollar basis. The model makes no inflation adjustment and holds yearly costs constant.8102

Electricity value Price path Years to recover the cost Net result after 25 years
Full per-kWh rate ($0.211718) Up 3 percent a year 10.1 $49,599
Full per-kWh rate ($0.211718) Flat 11.8 $25,011
Floor rate ($0.14782) Up 3 percent a year 14.2 $25,586
Floor rate ($0.14782) Flat 18.1 $8,418

Output falls 0.5 percent a year in every row. Total cost is $24,000 (8 kW at $3.00 per watt) with no other incentives.2

The calculation adds up each year’s electricity value, subtracts the yearly costs, and counts the years until the total covers the up-front cost. It has no hour-by-hour import and export model, so it can’t price a successor tariff, an annual surplus payout, a change in rate structure or a loss of program eligibility. It leaves out borrowing costs, taxes on any receipts and discounting, and it excludes roof work, batteries and home-sale proceeds. Treating future dollars as equal to today’s flatters the result. Real repairs can also run higher than the broad cost allowance.2

Now picture a homeowner who expects to move within ten years. At year 10 the running total is still $257 below zero in the model’s best case (full rate, prices up 3 percent) and $8,143 below zero on the floor rate, so the electricity savings haven’t recovered the full up-front cost by then.2 The model assumes no resale premium. Your own timeline matters more than any other input here.

Why does the net-metering deadline matter for a purchase?

The current program has a hard end date. Maryland’s 2026 Utility RELIEF Act (Chapter 353) keeps the standard net-metering contract available, first come, first served, until the earlier of 3,000 megawatts of statewide capacity or July 1, 2027, so timing decides which rules your system gets.11

The Act also tells the Public Service Commission (PSC) to approve, by February 1, 2027, a framework for a successor program to begin July 1, 2027.11 No successor export price exists yet, so this guide assigns none.

Item What the source says What it means for a purchase
Closing the existing program Chapter 353 (House Bill 1532) says the standard contract or tariff stays available until the earlier of 3,000 megawatts or July 1, 2027.11 Signing a contract isn’t the same as getting in.
Which step qualifies a new system A June 2026 PSC proposal on rule RM56 lists three versions of the cutoff: a filed interconnection application, an executed interconnection agreement, or permission to operate.12 The PSC docket’s most recent entry is dated October 13, 2026, and it lists no final rule as of October 25, 2026.13 The final rule decides, so get your utility’s answer in writing before you rely on the old program.
The successor program The PSC opened a working group in May 2026 to design it.12 Don’t count on a particular export price until the PSC approves the framework.
Staying eligible The Act says a customer under a net-metering contract or tariff on July 1, 2027 remains eligible until the earlier of: the system is decommissioned; it is modified to increase net power flow injection by adding photovoltaic modules or to increase its alternating-current output capacity; it enters a new interconnection agreement; or it is repowered. The Act defines repowered as replacing more than 80 percent of the original module capacity, and it excludes routine repair and roof replacement.11 If you might add panels later, ask the utility in writing how the Act’s rules would apply before you rely on the old program.

On billing, Maryland law gives most customer-generators a choice. You can accrue credits for up to 12 months ending with the billing cycle before the end of April, or accrue them indefinitely. The indefinite option isn’t offered to customers of municipal utilities or electric cooperatives. If you choose the 12-month option, the law values leftover credits at the generation or commodity portion of your rate, averaged over the previous 12 months, and the electric company pays that amount within 30 days after the period ends.3

A household that uses its credits later is in a different spot from one that piles up a surplus for a payout. If the proposed array is larger than you need, ask for the numbers both ways, and keep the program and billing terms in writing.

For more on the entry deadline and the successor, see our guides on the Maryland net-metering deadline and the net-metering successor program.

When does solar not pay?

Solar is a poor financial fit when shade cuts output, the roof needs costly work, or you expect to move soon. Pause, too, when borrowing costs eat the benefit or the proposal leans on export income nobody can promise. The tests and table below show how quickly those problems add up.

Illustrative downside test, run October 25, 2026 (PVWatts production from October 17). Assumptions: keep the base model’s cash cost, yearly costs and output decline. Add a 25 percent production loss on top of PVWatts’ own system losses, and assume prices stay flat. The extra loss is a stress scenario, not a measured shading result.6

Electricity value Years to recover the cost Net result after 25 years
Full per-kWh rate ($0.211718) 16.6 $11,267
Floor rate ($0.14782) More than 25 -$1,178

Heavy shade and the narrower electricity value together leave the system short of its cost after 25 years; at the full rate it still takes 16.6 years.6 The base ranges above don’t cover this downside, so a real roof assessment should replace the assumed loss before you decide.

Decision factor Worth investigating Reason to pause
Roof and shade A usable roof with a production estimate for your site Roof repairs not yet done, or a design that depends on sun nobody measured
How long you’ll stay Enough time to use the electricity and earn back the cost A planned move before cost recovery, with no resale premium assumed
Purchase structure An itemized cash price and costs you can carry Low monthly payments that hide interest, fees or an escalator
Exports and demand Output matched to household use, with billing confirmed Credits counted for energy you may never use
Future expenses Written equipment terms and a repair reserve A worksheet that assumes no maintenance or failures

If solar isn’t a good fit for your house, a good installer says so. Soleil Energy’s residential solar consultation starts with the roof and your electric bill. For a wider look at saving on power, see how to lower your electric bill in Maryland.

SRECs and batteries: extras, not rescues

SRECs add value only if your contract leaves the rights with you and you can sell them. A battery solves a different problem, such as backup power or moving when you use electricity. Keep both out of a basic solar-only result until you have their costs and terms.

Maryland law says the customer-generator or the customer-generator’s assignee owns and holds title to the renewable energy attributes and credits from the electricity the system produces.3 Read the assignment clause in any contract before you count on SREC income. On October 25, 2026, a broker (Flett Exchange) listed a standard Maryland SREC of the 2026 vintage at $40.00.14 That’s one dated quote, and whether a given system can register and sell certificates depends on the program’s rules, so confirm that before counting on the income. Our guide to Maryland SREC prices covers how the credits are registered and sold.

Illustrative first-year SREC sensitivity, figured October 25, 2026. Assumptions: this test applies a $40 broker quote to the model’s first-year production in megawatt-hours (MWh), assuming you keep the certificates. It’s an energy-equivalent estimate before fees and taxes, not a schedule for issuing whole certificates, and it doesn’t assume repeated sales at that price.214

Item Result
$40.00 per MWh times first-year production About $441 a year, outside the base result

A home battery backup needs its own costs and a list of the loads it would carry. The U.S. Department of Energy notes that solar systems are designed to switch off when the grid goes down, so backup power takes a properly configured inverter and storage.15 Before adding a battery, find out whether it changes your interconnection agreement or how the program treats you.

A checklist for the proposal on your table

Before you buy, get a production estimate for your own roof and a worksheet you can trace back to your bill. Confirm the cash price, who owns what, which program you’d enter and what charges remain. Then ask for a downside case that still works with tax credits, rising electricity prices and certificate income all removed.

  1. Gather recent bills and note your supplier and rate schedule. Separate the fixed charges from the ones that rise with use.
  2. Get the roof condition, the shading assessment and the production assumptions in writing. Keep roof work and battery costs visible.
  3. Find out which milestone applies to your application, and how unused credits and later changes to the system are handled.
  4. Compare the cash price with any financed or leased option. List the fees, the interest, the escalator and who owns the incentive rights, and have a tax professional check any tax credit.
  5. Request flat-price and lower-output cases that include ongoing costs. Compare them with how long you expect to own the system.

Our solar FAQ explains the consultation and service process. Bring the proposal’s assumptions to a free consultation or call (301) 953-4140.

Solar savings and incentive eligibility depend on your roof, your usage, your utility, and your tax situation. Incentive programs change and some have limited funding. We are not tax advisors — we will review your bill with you and tell you what you may qualify for. Confirm any tax credit with a qualified tax professional.

Sources (15)

  1. IRS, Residential Clean Energy Credit (page last reviewed July 4, 2026), https://www.irs.gov/credits-deductions/residential-clean-energy-credit; IRS, FAQs FS-2025-05, question 7 (August 21, 2025), https://www.irs.gov/newsroom/faqs-for-modification-of-sections-25c-25d-25e-30c-30d-45l-45w-and-179d-under-public-law-119-21-139-stat-72-july-4-2025-commonly-known-as-the-one-big-beautiful-bill-obbb; 26 U.S. Code section 25D(e)(8) and (h) as amended by Public Law 119-21 section 70506, current text, https://www.law.cornell.edu/uscode/text/26/25D; read October 25, 2026. ↩ ↩2 ↩3

  2. Illustrative calculation, run in two sets, with the inputs sourced at 5, 7, 8, 9 and 10. The floor-rate cases (14.2 and 18.1 years) were run October 17, 2026; the full per-kWh cases (10.1 and 11.8 years, rate $0.14782 + $0.04328 + $0.020618 = $0.211718 per kWh) were run October 25, 2026 on the same PVWatts output (8 kW, $3.00 per watt, $29.83 per kW per year in yearly costs, 0.5 percent yearly output decline, 25 years). Outright cash ownership; existing-program and later-consumed-credit assumptions only. The year-10 figures (-$257 and -$8,143) are the model’s year-10 running totals at 3 percent price growth. ↩ ↩2 ↩3 ↩4 ↩5 ↩6 ↩7 ↩8 ↩9 ↩10 ↩11 ↩12 ↩13

  3. Maryland General Assembly, Public Utilities Article section 7-306, https://mgaleg.maryland.gov/mgawebsite/Laws/StatuteText?article=gpu&section=7-306&enactments=false, subsections (e)(1), (f)(3), (f)(4), (f)(5), (f)(6) and (g)(5) on customer charges, credit accrual, surplus payment and ownership of renewable energy attributes; current statute text, read October 25, 2026. ↩ ↩2 ↩3

  4. Pepco, Maryland electric tariff, Rider NEM section E (printed page 31.1) and Rider E-MD (printed page 48), current tariff compilation, https://www.pepco.com/cdn/assets/v3/assets/bltbb7c204688a1a6a8/blte8a580e4cc79e2c4/6abad89015d5b7d18eb100f3/9232_AND_9761_Pepco_MD_CURRENT_CLEAN_Admin_Ch_.pdf?branch=prod_alias; read October 26, 2026. Net metering affects per-kWh rate components; Rider E-MD lists the residential EmPOWER charge per kWh. The modeled offset assumes credits are used, with no annual surplus payout. ↩ ↩2

  5. Maryland Office of People’s Counsel, Pepco utility rates (October 2026 rate labels: supply $0.12681, transmission $0.02101, supply plus transmission $0.14782, volumetric distribution $0.04328, EmPOWER surcharge $0.020618 per kWh, based on 900 kWh a month), https://opc.maryland.gov/Consumer-Learning/Utility-Rates-and-Basics/Pepco; the same breakdown for other utilities is at https://opc.maryland.gov/Consumer-Learning/Utility-Rates-and-Basics/BGE and https://opc.maryland.gov/Consumer-Learning/Utility-Rates-and-Basics/SMECO; current pages, read October 25, 2026. ↩ ↩2 ↩3 ↩4

  6. Illustrative calculation, floor-rate case run October 17, 2026 and full-rate case run October 25, 2026, using the same model and the inputs sourced at 2; a 25 percent extra output loss and flat prices are assumed. ↩ ↩2 ↩3

  7. National Laboratory of the Rockies (formerly NREL), PVWatts API version 8, model run of October 17, 2026, https://developer.nlr.gov/docs/solar/pvwatts/v8/; calculator at https://pvwatts.nlr.gov/. ↩ ↩2 ↩3

  8. Lawrence Berkeley National Laboratory, U.S. Distributed Solar and Storage 2026 Data Update, slide 8 (August 2026), 2025 installed prices in 2025 dollars, known cash-purchase residential systems, https://eta-publications.lbl.gov/sites/default/files/2026-08/distributed_solar_storage-2026_data_update_final.pdf; read October 24, 2026. ↩ ↩2 ↩3

  9. Jordan and Kurtz, Photovoltaic Degradation Rates: An Analytical Review, NREL/JA-5200-51664 (June 2012), https://www.osti.gov/biblio/1045052; read October 24, 2026. ↩ ↩2

  10. National Laboratory of the Rockies, 2025 Annual Technology Baseline, Residential PV (2025 edition; 2024 fixed operations and maintenance estimate), https://atb.nlr.gov/electricity/2025/residential_pv; read October 24, 2026. ↩ ↩2 ↩3

  11. Maryland General Assembly, Chapter 353 of the 2026 Laws of Maryland (House Bill 1532, Utility RELIEF Act of 2026), amending Public Utilities Article section 7-306(a), (d) and (j) and adding section 7-306.4, approved by the Governor May 12, 2026, https://mgaleg.maryland.gov/2026RS/chapters_noln/Ch_353_hb1532E.pdf; read October 25, 2026. ↩ ↩2 ↩3 ↩4

  12. Maryland Public Service Commission, Proposed Regulations RM56 (notice dated June 25, 2026), https://psc.maryland.gov/wp-content/uploads/2026/06/Proposed-Regulations-RM-56.pdf, and Notice Convening a Public Conference, PC 78 (May 14, 2026), https://psc.maryland.gov/wp-content/uploads/2026/05/Notice_Convening-a-PC-PC-78.pdf; read October 25, 2026. ↩ ↩2

  13. Maryland PSC, Rulemaking RM56 docket (latest filing dated October 13, 2026), https://webpscxb.pscmaryland.com/DMS/rm/RM56; read October 25, 2026. ↩

  14. Flett Exchange, Maryland SREC market prices, 2026 vintage standard certificate, Sell Now quote, https://www.flettexchange.com/markets/maryland/market-prices; broker quote viewed October 25, 2026. ↩ ↩2

  15. U.S. Department of Energy, Solar and Resilience Basics, https://www.energy.gov/cmei/systems/solar-and-resilience-basics; current page, read October 24, 2026. ↩

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