As previously discussed on this blog, Maryland, in 2017, become the first state in the county to offer an income tax credit for energy storage systems and, to our knowledge, as of 2019, it remains the only state to do so.
On February 21, 2019, the Maryland Energy Administration (“MEA”) announced that it is now accepting applications for the 2019 Maryland Energy Storage Income Tax Credit Program. The aggregate tax credits issued to all taxpayers in a taxable year is statutorily capped at $750,000. As of March 15, 2019, $295,122.60 remained available for residential taxpayers and $450,000 for commercial taxpayers. If either of the reserved funding allocations become oversubscribed, eligible applicants will be placed onto a wait list as long as funding remains in the other funding allocation. The reserved funding allocations by category will be removed on August 1, 2019, and tax credits will be assigned to eligible applicants on the waitlist in the order the eligible applications were received. Residential and commercial applicants placed onto the waitlist in 2019 cannot be carried forward to another taxable year. The deadline to apply for the tax credit is January 15, 2020.
The tax credit first took effect January 1, 2018 and, under current law, would continue to apply to systems installed through December 31, 2022. As reported on the MEA website, in 2018, a total of 61 residential customers and one commercial customer took advantage of the tax credit. Current storage levels subsidized by the tax credits are over 1.1 megawatts of duration and more than 600 kilowatts of peak capacity. The MEA, however, has not posted the amount of credits issued in 2018. As tax credits are issued up to $5,000 for residential systems and $75,000 for commercial systems, it would seem that no more than $380,000 of tax credits were applied for in 2018, significantly below the $750,000 statutory cap.
Nevertheless, reflecting on 2018, Mary Beth Tung, Direct of the MEA, stated that “we are encouraged with the performance of the program in year one, knowing that building on current energy storage technology is key to the State’s renewable energy future.” This seems to be the view of Maryland House Delegates Marc Korman (D) and Kumar Barve (D) who on February 6, 2019, first introduced House Bill 650, which would require the state’s investor-owned utilities to create energy storage pilot programs. If passed, Maryland would continue to lead the way in incentivizing energy storage.