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Maryland Residential Geothermal Grants

Earth River Geothermal - Geothermal Heating and Cooling - Annapolis, Maryland

Update (November 1, 2011):

MEA is changing its Residential Clean Energy Grant Program (CEGP) incentive structure as of Nov. 1, 2011; please see below for important details. Download the letter outlining program structure updates.

  • To see if your Residential CEGP grant application or completion package has been received and is being processed, download the Applications Received spreadsheet. Last update Jan. 20, 2011
  • For a list of all closed/paid Residential CEGP grants, please download the Historic Award Data Report spreadsheet. Last update Jan. 20, 2011
  • For a list of all open/pending Residential CEGP grants, please download the Open Award Status Report spreadsheet. Last update Jan. 20, 2011

Note: These changes do not affect the Commercial Clean Energy Grants Program.

Program Goals

Increasing the amount of renewable energy is one of the State's key policy goals. The Maryland Energy Administration is tasked with achieving the state's Renewable Portfolio Standard (RPS). Currently, the RPS requires that 20% of energy sold in Maryland in 2022 come from qualified renewable energy resources, with 2% coming from qualified solar resources.

Program Incentives

Along with these larger programs, MEA's Residential Clean Energy Grant Program (CEGP), started in FY05, has:

  • Received more than 6,200 applications for over $20,000,000
  • Paid out over $16,500,000 in grants to homeowners that have helped install more than
    • 2,000 PV systems with more than 10.5 MW of capacity
    • 1,100 solar water heating systems
    • 1,500 geothermal heat pump systems
    • 85 small wind systems

Much of the Residential CEGP funding has been supplied by the American Recovery & Reinvestment Act (ARRA), but those funds have been rapidly depleted due to overwhelming success of MEA's grant programs. Based on the recent increase in the application rate, the CEGP would have run out of its original FY12 funding of $6.3 million in a few months, well before the end of the fiscal year. Further, MEA would likely have committed most of next fiscal year's budget before the fiscal year even begins. To prevent a months-long gap before FY13 funding comes available, MEA has decided to shift money from other programs and provide and additional $2.5 million to the Residential CEGP and change the grant structure as of Tuesday, November 1, 2011.

MEA will be posting a list of applications that were received by the deadline date on our website in the coming weeks, along with reports showing the status of pending applications and historical grant information. Please first refer to these files prior to contacting MEA regarding your grant status.

MEA will accept complete grant applications with all supporting documentation at the "current" program incentive structure found in the table below through October 31, 2011. To receive the current grant structure, applications must be:

  • Hand-delivered to MEA's offices at 60 West Street, Annapolis, MD before 5:00 pm, Monday, October 31, 2011.
  • Postmarked by midnight, Monday, October 31, 2011, and received by MEA by Thursday, November 3, 2011;
    • Please ensure that the post office cancels the postage, or used certified mail or a parcel delivery company to assure MEA can confirm the postmarked date
    • The date generated from automated postage machines will not be sufficient proof of postmark

CEGP Grant Structure — Valid Through 10/31/11

Technology Valid System Size Grant Calculation Maximum Award
Solar Photovoltaic (PV) Less than 20 kW $500 / kW $10,000
Solar Water Heating Any 20% of Total Cost $500
Geothermal Heat Pumps Any $500 / ton $2,000
Small Wind Less than 100 kW Click to see details $75,000

MEA is committed to continuing the Residential CEGP into FY13, albeit at reduced levels for two technologies. To continue a stable and more sustainable program without starts and stops that have crippled other states, MEA will make the following changes to the program effective November 1, 2011:

  • Change the PV grant structure from a graduated $500/kW to a flat amount of $1,000/PV system/household.
  • Reduce the geothermal heat pump grant cap to $1,000.

Grant Structure Effective November 1, 2011 (changes in bold)

Technology Valid System Size Grant Calculation Maximum Award
Solar Photovoltaic (PV) Less than 20 kW Flat $1,000
Solar Water Heating Any 20% of Total Cost $500
Geothermal Heat Pumps Any $500 / ton $1,000
Small Wind Less than 100 kW Click to see details $75,000

Grants are allocated on a first come/first served basis across technologies. Homeowners may apply for one grant per technology per fiscal year. Leasing companies may apply for one grant per technology per address per fiscal year.

MEA regrets any inconvenience this may cause to the solar and/or geothermal industry in Maryland, but these changes reflect the inevitably of depletion of the ARRA funds. By making these changes, the CEGP will be able to continue supporting clean energy in the residential sector.

The Grant Process

Home owners will need to decide if they or their installer will be the Primary Point of Contact (PPC) who will be responsible for ensuring grant documentation is submitted in a timely, accurate, and complete manner.

The following is a basic overview of the Clean Energy Grant Program process.

Maryland Residential Geothermal Grants Process Diagram

There are essentially two packages that the PPC must complete:

1. Grant Application Package. The application package documents are electronic, allowing certain data to be validated for form and content.


2. Grant Completion Package. After MEA sends the Grant Commitment Letter to the PPC upon project completion, the PPC will need to submit the Completion Package.

A few other important notes:

  • Due to limited funds, applicants that increase system capacity are still eligible for the initial grant amount; however, applicants may not increase their grant amount. Applicants that would like to decrease system capacity must also reduce the amount of their grant. To do so, applicants can contact Cindy Szczesniak at cszczesniak@energy.state.md.us for the appropriate form. The capacity change form will need to be submitted and accepted two weeks prior to submitting the completion documents, which should also reflect the accepted capacity change.
  • A relatively new trend is solar equipment leasing to reduce upfront costs to homeowners. If you are a solar leasing company operating in Maryland, please contact Cindy Szczesniak at cszczesniak@energy.state.md.us for a grant lease application and completion certificate.
  • MEA cannot offer grants to a property held in a trust.
  • The property must be a primary residence to be eligible.

Additional Information

Tax Status of Clean Energy Grants

The Maryland Office of the Comptroller has determined that, based on IRS rules, a state grant is considered taxable income. Therefore, a Form 1099-G will be issued for grants received through the Clean Energy Grant Program. They should be reported as income on federal tax returns.

However, State grants for solar energy projects are not treated as taxable income by the State. The grant amount is subtracted from the federal adjusted gross income of a resident to determine Maryland adjusted gross income. This subtraction was created through legislation sponsored by Delegate Bartlett in the 2007 General Session. For more information on the State legislation, please read information from State Taxes - Solar Energy Grants and Devices.

Solar Renewable Energy Credits (SRECs)

To help Maryland home and business owners realize the benefits of solar energy, Maryland manages the Solar Renewable Energy Credits (SRECs) program. Owners of solar photovoltaic systems can earn and sell SRECs (equivalent to 1 Megawatt hour) based on the amount of energy their solar system produces on the open market.

SB717 expanded the solar RPS to include solar water heating systems. All solar water heating systems 'commissioned on or after June 1, 2011' will produce SRECs.

Electricity suppliers must purchase and retire solar renewable energy credits (SRECs) in order to meet their compliance obligations under the law, or pay a Solar Alternative Compliance Payment (SACP) for any shortfalls in SREC purchases. The SACP operates as a theoretical ceiling on the price that a supplier would pay for SRECs to fulfill obligations under the Maryland RPS. In Maryland the SACP is set at $400 per MWh for 2009 - 2014. Under this system, SRECs may represent a significant source of revenue for owners of qualifying solar facilities, with a value determined by demand in the trading market.

In order to begin producing SRECs for the Maryland RPS, a solar generator must apply for certification as a qualifying generator from the Maryland Public Service Commission (PSC).

  • The SRECs FAQ document provides additional details about how to register systems and sell SRECs.
  • The PJM-GATS Public Reports web site contains a variety useful data, including monthly weighted average SREC trading prices for Maryland and other states.

Beginning in 2012, to be eligible for use for Maryland RPS compliance, SRECs must come from qualifying solar facilities connected to the distribution grid serving Maryland.

Learn More

The Database of State Incentives for Renewable & Efficiency (DSIRE) offers a comprehensive list of Federal, State, and Local incentives for renewable energy and energy efficiency measures.

The U.S. Department of Energy Energy Efficiency and Renewable Energy Division provides a wealth of resources about clean energy:

Better Business Bureau

Visit the Better Business Bureau website to check out a contractor, find a BBB-accredited contractor, or file a complaint about your experience.

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