Maryland - Smart Energy Decisions

Commercial, Energy Storage, Regulation  -  April 13, 2017

Maryland passes 30% energy storage tax credit

The Maryland legislature has passed a bill establishing a tax credit for commercial and residential energy storage installations, making the state among a small but growing number moving to support the rapidly scaling technology. 

The bill received unanimous support in passing through the Senate and also garnered strong support in the House, which voted 101-11 to approve it, according to an April 12 report from Greentech Media. Maryland Gov. Larry Hogan has not indicated his position on the bill, though its strong legislative support suggests a veto is unlikely. 

If the bill is approved by the governor, Maryland will offer a 30% tax credit for the cost of an energy storage system from 2018 through 2022. The credit would carry a cap of $5,000 for residential systems and $75,000 for commercial systems. Additionally, total credits would be capped at $750,000 annually. 

Though large commercial energy consumers such as Wal-Mart, Whole Foods and Home Depot have begun deploying energy storage technologies into their operations to help reduce demand charges or to bolster renewable energy investments, initial trials and deployments have mostly been limited to states with regulatory support mechanisms such as incentives or mandates. California was an early mover in this area, and states such as Massachusetts and New York have recently followed. 

Maryland's approach to supporting the technology is somewhat unique. GTM explained

The state is forgoing a limited amount of tax revenue in the hopes of kick-starting a new local industry. That's a lighter touch than a mandate, and doesn't require appropriating funds like California did with its Self-Generation Incentive Program rebates for storage installations. As Maryland's tax credit goes into effect, it could serve as a model for states that are interested in fostering a nascent storage market, but don't have the political appetite for imposing a mandate on utilities. Hawaii's legislature has also been debating a storage tax credit, and could follow Maryland shortly.

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