Leasing of solar power has now emerged as one of the hottest topics on the lips of many Maryland homeowners by the year 2026. This is attributed to the fact that the federal tax credit for residential solar energy systems (Section 25D) has now been exhausted for homeowner purchases as of December 31st, 2025. In this blog, you’ll learn more about leasing solar panels in Maryland in detail.
How Does Solar Leasing Work?
The solar lease is a type of agreement in which a third party will install the panels on your roof while they will own the entire system. Instead of buying the equipment, you will be required to pay a monthly fee to use the power that this equipment is producing, irrespective of the power production. This is different from a PPA (Power Purchase Agreement), where you pay per kilowatt-hour based on actual electricity produced and not based on a fixed monthly rate.
Why Does Leasing Still Get Federal Tax Benefits?
The critical distinction here, which is for 2026, is that while the residential tax credit of 30% for systems purchased by individuals is no longer available, the third-party-owned system (leasing and PPA) can claim a different commercial tax credit of Section 48E until 2027. Since the leasing company owns the equipment, they can benefit from this credit, and any good leasing company will pass on some of the savings to you through lower monthly costs. That’s one reason why leasing is relevant again this year.
Benefits of Leasing in Maryland
Solar leasing is becoming more common in Maryland, especially since the tax incentive for buying solar systems has expired at the federal level. It allows for a risk-free entry point into solar energy, allowing one to begin reducing energy costs.
1. Low or No Upfront Cost: Most solar panel lease agreements don’t require any or very minimal upfront payment for the customer, making it easy to access solar panels.
2. Fixed Monthly Payments: Easy budgeting, and most lease agreements are cheaper than the utility rates at hand.
3. No Maintenance Responsibility: The leasing firm handles repairs, monitoring, and performance issues for the life of the agreement.
4. No System Ownership Risk: As you are not the owner of the equipment, you will not be responsible for any potential inverter replacement or major repairs.
Weighing the Costs of Leasing
The pros of leasing do come with certain cons. Since the leasing firm owns the system, they retain the tax credits, depreciation benefits, and SRECs it generates — value that would go to you instead if you bought the system outright. Leases usually last about 20 to 25 years. Before you lease solar panels in Maryland, think about your options at the end of the lease period.
Is Leasing Right for You?
Leasing is typically ideal for people who have no desire to pay any upfront costs while enjoying the benefits of saving money through their solar energy systems in an assured manner. Individuals who would like to benefit from the maximum savings over 25 years while taking advantage of state-based incentives such as those provided by SMART and MSAP programs in Maryland could consider owning.
Not sure which option fits your home best? Consult Solar Brokers USA today.