Prince George’s County – Solar and Geothermal Residential Property Tax Credit

In 2008 Prince George’s County enacted legislation offering a property tax credit on residential structures equipped with solar and geothermal systems. As originally devised, the credit could only be taken for systems used to heat and cool a structure or provide hot water for a structure. However, in April 2009 the county enacted additional legislation (Council Bill 05-2009) extending the property tax credit to solar-electric (PV) systems, effective May 22, 2009. Prince George’s County also later extended property tax credit to include leases and solar power purchase agreements. 

The tax credit for solar or geothermal systems is equal to 50% of the cost of the system, up to $5,000 for heating and cooling systems and $1,500 for water heating systems. The tax credit for leases or solar power purchases is equal to 50% of the cost of the system, up to $1,000 without exceeding the cost of the system. The 2009 legislation that expanded the tax credit to include PV is silent on monetary limits for electricity generating systems. Eligible costs include parts, components and accessories necessary to operate the device as well as reasonable installation costs. Only costs incurred during the 12 months preceding a credit application are eligible for a tax credit. All systems must meet performance and safety standards set by a nationally recognized testing laboratory. 

The amount of the tax credit may not exceed the taxes imposed on the property during a fiscal year. Excess credits accrued during a year may be carried forward for up to two additional years. The total value of credits for solar or geothermal systems granted during a fiscal year may not exceed $500,000. The total value of credits for leases or solar power purchases may not exceed $100,000. In the event that applications during a fiscal year exceed this limit, a credit may be granted the following year or years in the order applications are received. Applications for the tax credit are handled by the Prince George’s County Office of Finance.