# COMAR Title 14 — Independent Agencies ## Subtitle 26 — Maryland Energy Administration ### Chapter 07 — Maryland Energy Storage Systems Income Tax Credit Program **Authority:** Tax-General Article, §10-719, Annotated Code of Maryland **Administrative History:** Effective date: September 10, 2018 (45:18 Md. R. 834) #### Regulation .01 Purpose. *COMAR 14.26.07.01* These regulations implement Maryland's Income Tax Credit — Energy Storage Systems Act by establishing procedures for persons and businesses to apply for tax credits for purchasing and installing a qualifying energy storage system on eligible property in Maryland. #### Regulation .02 Scope. *COMAR 14.26.07.02* The Maryland Income Tax Credit — Energy Storage System Act establishes a program to award tax credits to Individuals and Corporations that purchase and install a qualifying energy storage system on eligible property in Maryland. The Program also establishes limits on eligibility and the amount and duration of the credit Program. #### Regulation .03 Definitions. *COMAR 14.26.07.03* A. In this chapter, the following terms have the meanings indicated. B. Terms Defined. (1) “Administration” means the Maryland Energy Administration. (2) “Capacity factor” means the ratio of actual energy output compared with the maximum possible energy output over a specified period of time. (3) “Commercial property” means nonresidential property with a commercial, industrial, or government use as outlined in the qualifications for the Commercial Clean Energy Grant Program in COMAR 14.26.04.02 and includes multifamily properties. (4) “Corporation” has the meaning stated in Tax-General Article, §10-101(c), Annotated Code of Maryland. (5) “Energy density” means the amount of energy that can be stored in the given mass of the system. (6) “Energy markets” mean wholesale electricity markets hosted by PJM Interconnection. (7) “Energy storage duration” means duration at rated power. (8) “Energy storage systems income tax credit” means a decrease in income tax liability offered to assist an individual or corporation in installing an energy storage system. (9) “Energy storage system power density” means the rate of energy flux per unit of area of the energy storage system. (10) “Individual” has the meaning stated in Tax-General Article, §10-101(g), Annotated Code of Maryland. (11) “Installation date” means the date when the energy storage system was installed on the property and operational, not when the final permits were completed. (12) Residential Property. (a) “Residential property” means property, including a single-family home and an individual unit of a multifamily property or mixed use facility, that has the purpose of serving as a primary residence, as outlined in COMAR 14.26.04.02 (b) “Residential property” includes a property with a home office. #### Regulation .04 Qualifying Energy Storage Systems. *COMAR 14.26.07.04* A. Qualifying energy storage systems may store the following types of energy for use as electrical energy at a later date or in a process that offsets electricity use at peak times: (1) Electrical energy; (2) Mechanical energy; (3) Chemical energy; or (4) Thermal energy. B. Qualifying energy storage systems shall maintain certain safety criteria, namely: (1) Use equipment certified by a nationally recognized testing laboratory (NRTL); (2) Be installed by a licensed electrician, for electrical systems; and (3) Be in compliance with all applicable building and fire codes. C. Qualifying energy storage systems shall also meet the following: (1) Be installed in Maryland; and (2) Abide by Maryland regulations regarding interconnection with the electric utility and grid, if applicable. D. The Administration may adjust energy storage system qualifications across program years. #### Regulation .05 Qualifying Program Participant. *COMAR 14.26.07.05* A. Qualifying energy storage program participants may include: (1) Residential taxpayers who purchase and install an energy storage system for a residential property which they own; or (2) Commercial taxpayers who purchase and install an energy storage system for a commercial property which they own. B. Taxpayers that have already claimed an energy storage systems income tax credit as part of this program are ineligible for additional energy storage systems income tax credits for the same taxable year. C. Addresses where energy storage systems income tax credits have already been claimed, including multifamily properties, are ineligible for additional energy storage income tax credits from this program. D. An energy storage systems income tax credit cannot be claimed for an electric vehicle. E. The Administration may adjust program participant qualifications across program years. #### Regulation .06 Amount of Tax Credit. *COMAR 14.26.07.06* An individual or corporation that receives a credit certificate from the Administration may claim a credit against the individual’s or corporation’s State income tax for a specified taxable year in an amount that may not exceed the lessor of: A. For a qualifying energy storage system installed: (1) On a residential property, $5,000; (2) On a commercial property, $75,000; or (3) 30 percent of the total installed costs of the qualifying energy storage system. B. The Administration may bifurcate the annual program budget to allow for a funding allocation for both residential and commercial participants. #### Regulation .07 Application Process for a Credit Certification. *COMAR 14.26.07.07* A. An individual or corporation interested in qualifying for a credit certification may be asked to provide some or all, at the sole discretion of the Administration, of the following information to the Administration: (1) Name, address, email address, and phone number of the applicant's authorized representative; (2) Estimated gross income of property owner for a residential participant, or gross revenue for a commercial participant; (3) Estimated tax liability; (4) Property physical address and proof of ownership of property; (5) Description of the qualifying energy storage system being proposed for use at the facility and an explanation of how it offsets electricity when discharging; (6) Name and contact information of the developer/installer; (7) Whether or not the energy storage system will participate in wholesale energy markets; (8) Anticipated cost of the qualifying energy storage system; (9) Expected life of the qualifying energy storage system; (10) Anticipated in-service date for the qualifying energy storage system; (11) Anticipated capacity factor of the qualifying energy storage system; (12) Energy storage duration; (13) Energy density; (14) Energy storage system power density; (15) Documentation verifying that the energy storage system has been installed and is operational, which includes copies of local electrical permits, inspection approvals, equipment certified by a nationally recognized testing laboratory, the results of any performance testing, and any other applicable documentation; and (16) Any other information the Administration considers necessary to process the application. B. The Administration shall issue credit certificates on a first-come, first-served basis once it has determined the application is complete and verifies the information provided by the applicant. C. The Administration may bifurcate the application process as necessary into more than one step. D. The Administration may not issue a credit certification of more than $75,000 for a commercial property or $5,000 for a residential property, and the Administration may not issue a total amount of credits totaling more than $750,000 in any taxable year. #### Regulation .08 Unused Credit. *COMAR 14.26.07.08* If the credit allowed under this chapter in any taxable year exceeds the State income tax otherwise payable by the individual or corporation for that taxable year, any unused credit may not be claimed for another taxable year. #### Regulation .09 Program Termination. *COMAR 14.26.07.09* The Administration may not issue a certificate for a qualifying energy storage system installed after December 31, 2022.