Montgomery County Tax Incentives

If you live in Montgomery County Maryland, we would like to inform you that Montgomery County passed legislation to help offset the cost of renewable energy. You can get a credit against your property taxes for your solar energy system.

Notice: The description below resulted from Capital Sun’s analysis of the legislation the County Council passed. We do not warrant that we have accurately related all the intricacies of the legislation, so please review your application form carefully, and visit http://www.montgomerycountymd.gov/deptmpl.asp?url=/content/dep/Energy/incentives.asp for actual bill language and to download the application

Starting on August 4, 2008, County Bill Number 33-07 grants a property tax credit for the installation of certain energy efficiency and renewable energy devices and geothermal energy units (e.g. ground coupled heat pumps). The credits are limited in several ways:
First, only owner-occupants of residential property are eligible.
Second, the dollar amount of the sum of credits granted by the County annually is limited to an aggregate $250,000 for solar energy systems and geothermal systems and $250,000 for energy conservation measures.

The credits are dispensed on a first-come first-serve basis. If the relevant $250,000 limit is reached in a year, then the credit applications go on a waiting list and will be granted in order the following year. The amount of a homeowner’s credit in any tax year must not exceed the amount of the County property tax imposed on the property in that tax year. Any amount of credit not taken in the tax year in which an application is approved may be carried over for an additional two years. When a credit is carried over under this subsection, the full amount of the credit must be counted towards the annual aggregate limit established in subsection in the year in which an application is approved.

Geothermal: Ground source heat pumps for heating and cooling.
Solar energy: Photovoltaic and solar thermal collectors for electricity and hot water and space heating.
Energy conservation device: An energy saving device such as new caulking, insulation, furnace efficiency modifications, or water heater insulation. [See the fuller list below].
Standard household appliances, such as a washing machine or clothes dryer, ARE NOT eligible for the conservation credit.

Credit Amount. The credit allowed under this Section for a solar energy or geothermal device is the lesser of: “50% of the eligible costs; or $5,000 for a heating system or $1,500 for a hot water supply system.” We think this means that solar energy and geothermal systems can earn a credit equal to 50% of the system cost up to $5000 for space heating and $1,500 for hot water heating systems. Based on the language, it might be that a solar space heating system can also receive a credit of up to $5000.00.

A property owner cannot receive more than 1 credit per fiscal year for more than 1 geothermal or solar energy device per property.

For all energy conservation devices, the credit is a maximum of $250 dollars per property. The energy conservation credit is limited to $250.00 per year, but can be carried over for two additional years.

"Energy conservation device" means a device that reduces the demands for conventional fuels or efficiency of these fuels. including:

• Caulking and weather-stripping doors and windows

• Furnace efficiency modifications. such as: replacing a burner, furnace, heat pump, or boiler if the replacement substantially increases the energy efficiency of the heating system; A device to modify flue openings that increases the energy efficiency of the heating system; any electrical or mechanical furnace ignition system which replaces a standing gas pilot light;

• A programmable thermostat;

• All ceiling, attic, wall or floor insulation;

• Water heater insulation;

• Storm windows or doors, multi-glazed windows or doors and heat-absorbed or heat-reflective glazed window or door materials

• Any device which controls demand of appliances and aids load management

• Any other conservation device, renewable energy technology, and specific home improvement that the Director finds necessary to assure that energy conservation measures are effective and;

Meets safety and performance standards set by a nationally recognized testing laboratory for that kind of device.

This only went into effect one month ago, so the odds are good you will receive your property tax credit without having to wait a year.

Don’t hesitate to call if we can help. Below is a link to download the application, when you have completed the form, mail it to:

Montgomery County Division of Treasury
255 Rockville Pike
Suite L-15
Rockville, MD 20850

Thank you again for your patronage, and please call us at 301-229-0671 if you have any questions of other alternative energy needs.

Bill Language can be found at this web address http://www.montgomerycountymd.gov/govtmpl.asp?url=/content/finance/index.asp