Non-Utility Electric Generators

Non-utility electric generator solar farms are taxable under Maryland law. These are sites which are designed to supply power into the general power supply by selling the generated power to local electric companies. The site is taxed as real property based upon comparable sales or the income approach based upon lease values. Improvements such as buildings to house equipment, fencing, and paving are taxed as real property. The equipment including solar panels, mounting structures, wiring, transformers, etc. are taxed as personal property at 50% of its value per Tax-Property Article §7-237(b)(2). “Community” solar projects are included in this category as taxable non-utility generators. Property accounts within this category must have the code 58100 in the BPRUC flag.  Land used for non-utility generator solar farms cannot receive an agricultural use assessment for the acreage supporting the solar project or described within the lease agreement.

Tax-Property Article §7-514 does allow the owner of a facility for the generation of electricity to enter into a payment in lieu of taxes agreement with the county or municipal corporation as an alternative to the above.

Net Metered Solar

Net metered solar energy projects are designed to supply power for the property owner's use and excess power sold to the local electric company with the property owner being billed for the "net" difference between what they use and what they provide to the power company. This is typically the situation with residential solar panels but can also occur on poultry farms or commercial sites such as an office building with the panels being either roof or ground mounted. The equipment including solar panels, mounting structures, transformers, etc. are not taxable as real property. For net metered solar projects the land and buildings are valued normally with no value assigned to the solar electric equipment. If a net metered solar project is located on land that otherwise qualifies for an agricultural use assessment as Associated Land under procedure 019-040-20 and supplies power for buildings that are part of the agricultural operation then the land under the panels may receive an agricultural use assessment unless the land is leased to the solar energy company. Under Tax-Property Article §7-242(a)(3) solar energy property (equipment) is not subject to real property tax when it is used to generate electricity to be used in a structure or to be supplied to the electric grid via net metering.

For net metered solar projects a note should be added to the property record that solar energy panels exist on the property.


Solar Energy Heating

Where solar heating is installed in conjunction with a conventional heating system, the combined units are to be assessed as if only the conventional system existed.
There will be occasions when the size of a structure will have to be increased by the installation of a solar heating and cooling unit. On some occasions this may warrant a new structure to support or house the solar heating or cooling elements. There shall be no additional assessment of these additions or new structures. If the addition or new structure has a dual use, such as storage, sun room, etc., then only the value attributable to the use other than solar heating and cooling units should be assessed. This would be in compliance with the Tax-Property Article §8-240. 

For solar energy heating a note should be added to the property record that solar energy panels exist on the property.