Why Maryland Is One of the Best States for Solar in 2026
Maryland ranks among the top 10 U.S. states for solar returns in 2026. The combination of high electricity rates ($0.168/kWh), full retail net metering, and an active SREC market creates payback periods of just 8.8 years and internal rates of return (IRR) of 11.2%—significantly higher than the national average.
1. Maryland's SREC Market — A Game Changer for Solar Returns
Maryland's Solar Renewable Energy Certificate (SREC) market is one of the most active in the United States. Here's how it works:
- Your solar system generates 1 SREC for every 1,000 kWh (1 MWh) of electricity produced.
- Utilities in Maryland must purchase SRECs to comply with the state's Renewable Portfolio Standard (RPS), which requires 50% renewable energy by 2030.
- Current SREC prices: $55-75 per SREC (2025-2026 market data).
For a typical 8 kW Maryland system generating about 9,200 kWh/year, you'll earn about 9-10 SRECs/year, worth $495-750 annually on top of your electricity bill savings. This SREC income alone can cover 30-40% of your system's payback cost.
2. Maryland Electricity Rates — Among the Highest in the U.S.
Maryland's average electricity rate of $0.168/kWh (EIA, 2025) is slightly below the national average but varies significantly by utility:
| Utility | Avg. Rate (2025) | Customers |
|---|---|---|
| BGE | $0.178/kWh | 1.3 million |
| Pepco | $0.172/kWh | 900,000 |
| Delmarva Power | $0.162/kWh | 550,000 |
| Potomac Edison | $0.158/kWh | 400,000 |
BGE customers see the highest savings from solar because they pay the highest rates. A BGE customer going solar can save $1,620/year on electricity bills alone.
3. Net Metering in Maryland — Full Retail Credit
All major Maryland utilities offer full 1:1 net metering for residential systems under 20 kW. This means you receive full retail rate credit for every kWh you export to the grid—the same rate you pay for electricity you consume from the grid.
Maryland's net metering law (Maryland Public Utility Code § 7-509) requires all electric utilities to offer net metering. This protection is state law, meaning it cannot be unilaterally changed by utilities—unlike in states where net metering is a utility policy that can be modified.
4. Real Case Study: David from Baltimore (BGE Customer)
David installed a 7.8 kW system in Baltimore, Maryland in 2025. He's a BGE customer with high electricity rates. Here are his actual numbers:
- System cost: $21,000 (before incentives)
- Federal tax credit (30%): -$6,300
- Net cost: $14,700
- Annual electricity bill savings: $1,620 (BGE rate: $0.178/kWh)
- Annual SREC income: $598 (9.2 MWh/year × $65/SREC)
- Total annual savings: $2,218
- Simple payback period: 6.6 years
- 25-year total profit: $40,750
- Internal rate of return (IRR): 14.2%
David's case shows why Maryland is exceptional: his IRR of 14.2% is higher than the stock market's historical average (8.5%) and far higher than a savings account (0.5%). The SREC income alone ($598/year) covers about 27% of his annual payback.
5. Solar Installation Costs in Maryland — Higher Than Neighboring States
The average cost of solar in Maryland is $2.78/watt before incentives (SEIA, 2025), which is higher than neighboring Virginia ($2.68/W) and Pennsylvania ($2.65/W). Reasons for Maryland's higher costs:
- Licensing requirements: Maryland requires solar installers to be licensed by the Maryland Board of Master Electricians, which limits competition and keeps prices higher.
- Higher labor costs: Maryland's proximity to Washington D.C. means higher labor costs compared to rural states.
- Permitting complexity: Some Maryland counties (Montgomery, Howard) have more complex solar permitting processes, adding $0.10-0.15/watt in soft costs.
However, Maryland's higher installation costs are more than offset by higher electricity savings and SREC income. David's 6.6-year payback is faster than the national average (11 years) despite his higher upfront cost.
6. Frequently Asked Questions About Solar in Maryland
7. Data Sources & Methodology
All calculations use data from: U.S. Energy Information Administration (EIA), Maryland Public Service Commission, Database of State Incentives for Renewables & Efficiency (DSIRE), Solar Energy Industries Association (SEIA), Maryland SREC market data (2025).
Estimates are for 2026 and subject to change. Consult a qualified solar installer for a personalized quote.