The state of Maryland slashed solar energy rebates 80 percent Monday, after its energy agency blew through one-quarter of its grant money in less than two months.
The Maryland Energy Agency has paid nearly $1 million in grants to residents and businesses who have installed solar panel systems since July 2 — less than two months into the program’s $4 million budget for fiscal 2011, energy officials said.
The program is now offering a one-time payment of $500 — down from $2,500 — for every kilowatt a solar installation generates.
“We have a waiting list of several hundred residents,” said Christina Twomey, spokeswoman for the energy administration. “This program is in such high demand, and we need to make sure we are stretching the money to as many people as we can.”
The federal government further boosts state incentives with a tax credit worth 30 percent of total installation costs, on top of $1,000 cash for every kilowatt a system generates.
Maryland’s grant program helped fund roughly 2,000 solar panel installations in fiscal 2010 at $2,500 per kilowatt. Residential installations are typically one- to three-kilowatt systems.
Twomey said she doesn’t expect demand for solar energy installations to fall, despite the slashed incentives.
“Change is already taking place in leaps and bounds,” Twomey said. “Incentives aren’t as needed.”
Maryland’s energy agency plans to distribute 100 solar grants a month for the remainder of the year, or until funds run out. The program’s $10,000 cap per installation will remain in place under the changes, Twomey said.
As incentives dwindle, state lawmakers have attempted to ensure demand for solar energy will grow over the next decade.
The Maryland General Assembly passed a law in April requiring utilities to buy more energy from solar resources, which is sending Pepco, Baltimore Gas and Electric, and other energy suppliers into the solar market.
Businesses and homeowners who buy solar panels and install them on their roofs can sell their energy credits as commodities to companies aiming to meet the state’s new energy requirements.
