Installing solar on a Maryland home or business will not raise your property taxes. Under the Maryland solar property tax exemption in Tax-Property Article § 7-242, 100% of the value that qualifying solar equipment adds to your real property is excluded from both state and local property tax assessments.1Maryland General Assembly. Maryland Tax – Property Code Section 7-242 (2025) The exclusion is written into the statute, so you don’t apply for a discount or a credit. You do, however, need to make sure the State Department of Assessments and Taxation knows the system exists so your property record is accurate.
What Equipment Qualifies
Section 7-242 defines “solar energy property” as equipment installed to use solar energy or solar thermal electric energy to generate electricity for a structure or for supply to the electric grid, or to provide hot water for use in a structure.1Maryland General Assembly. Maryland Tax – Property Code Section 7-242 (2025) In practice that reaches:
- Rooftop photovoltaic panels and ground-mounted arrays
- Solar water heating collectors
- Inverters, racking, wiring, and other components that make the system work
- Systems sized to serve only the building as well as systems that export power to the grid
The exemption applies to residential and commercial property alike. An earlier version of the law used the word “dwelling,” which limited the benefit to homes; the legislature later replaced that with “structure,” which brought businesses, farms, and nonprofit-owned buildings within the exclusion.2DSIRE – Database of State Incentives for Renewables & Efficiency. Property Tax Exemption for Solar and Wind Energy Systems
What the statute does not cover is equipment that mainly does structural work rather than energy work. Roof framing reinforced to hold panels remains part of the building. The exemption is aimed at the energy hardware itself.
Owned Systems Versus Leases and PPAs
The exemption works cleanly when you own the equipment, because the panels and related hardware are part of your real property and their added value is excluded from your assessment. Leased systems and systems under a power purchase agreement are different. The solar company owns the hardware, so it may not be assessed as part of your real property to begin with, and the tax benefits attached to ownership sit with the company rather than with you. A lease or PPA also creates a long-term contract, often 20 to 25 years, that a future buyer of your home must either assume or that you must buy out before selling. If you’re weighing a lease, ask both the installer and your local SDAT office how the arrangement will show up on your assessment.
How the Exemption Shows Up on Your Assessment
Maryland exempts 100% of the value solar equipment adds to real property from state and local property taxes.2DSIRE – Database of State Incentives for Renewables & Efficiency. Property Tax Exemption for Solar and Wind Energy Systems If a home is assessed at $350,000 before you install a $25,000 array, the taxable assessment stays at $350,000 afterward. The assessor treats the solar equipment as though it isn’t there for tax purposes.
Maryland reassesses property on a three-year cycle, with roughly one-third of properties in each jurisdiction reviewed each year.3Maryland Department of Assessments and Taxation. Property Tax – Homeowners Guide When your turn comes up, the assessor may note the installation as a physical improvement, but the statute keeps the value out of the taxable figure. Compare each annual assessment notice against your records to confirm the exclusion is being applied.
Notifying SDAT
Send your notice to the local SDAT assessment office in the county where the property sits. SDAT keeps a separate office for each county and for Baltimore City, each with its own staff and mailing address available through the SDAT website.4Maryland Department of Assessments and Taxation. Maryland Assessment Offices5Maryland Department of Assessments and Taxation. Real Property Exemptions
Pull these items together before you contact the office:
- Your property account number, printed on your tax bill and assessment notice
- The installation completion date, generally the final inspection date or the installer’s completion certificate
- The total installed cost, covering hardware, labor, and engineering directly tied to the system
- A description of the system, including type (photovoltaic, solar thermal, or both) and capacity in kilowatts or collector area
Keep your installation contract, paid invoices, and equipment spec sheets on hand. If the system fits the statutory definition, the assessor updates the property record to exclude the value of the solar equipment and sends you written confirmation.
Timing
SDAT processes exemption records on a schedule tied to Maryland’s fiscal tax year, which starts July 1.5Maryland Department of Assessments and Taxation. Real Property Exemptions Filing well before the next fiscal year begins gives the office time to update your record before the new bills go out. Ask your local SDAT office to confirm the current filing deadline for your county; if you miss it, the correction can slip to the following cycle, and you may temporarily pay on an assessment that includes the solar value.
Keeping the Exemption in Place
The exclusion applies for as long as the solar equipment stays installed and operational. If you add substantial capacity or replace major components, file an updated notice so the record matches the current system. Save copies of every form, approval letter, and installation document you send or receive. That file is useful when you sell the property, and it saves time if a future reassessment raises questions about what’s on the roof.