Maryland: Special Property Assessment for Renewable Heating & Cooling Systems

Title 8 of Maryland’s property tax code includes a state-wide special assessment for solar and geothermal heating and cooling systems. Under this provision, such systems are to be assessed at not more than the value of a conventional system for property tax purposes if no conventional system exists in the building. If a solar or geothermal heating and cooling system is installed in addition to a conventional system in a building, the combined system may be assessed at no more than the value of the conventional system -- essentially a full exemption for the qualifying equipment.

Geothermal heating and cooling systems were added as eligible for this incentive by H.B 377 (2008) for tax years beginning after June 30, 2008 (the property tax year begins on July 1st). The 2008 law also clarifies how different types of solar energy systems are treated for property tax purposes. As indicated above, solar heating and cooling systems are granted a special assessment that negates their increased value compared to conventional systems. Solar photovoltaic (PV) and solar hot water systems in contrast receive a full exemption from real property taxes under a separate provision in the tax code.