The Solar Dispatch

DMV Storage Policy

Home Battery Backup in the DMV: What Changed for 2026

The federal 30% credit that carried home battery economics ended with 2025. What is left is a Maryland rebate that is open now and a Virginia utility program whose payment rates are still being set.

By the Go Solar DMV news desk · Nov 2, 2026 · 5 min read

Home Battery Backup in the DMV: What Changed for 2026

Key facts

Where home battery backup stands in the DMV right now

If you are pricing home battery backup in Washington D.C., Maryland or Virginia, three things have changed and they point in different directions. The federal residential clean energy credit, which covered 30% of battery storage of at least 3 kWh, will not be allowed for any expenditures made after December 31, 20251. Maryland has replaced its old state tax credit with a rebate program that is open in the state's application portal and requires a reservation before installation13. And in Virginia, Dominion has filed a virtual power plant pilot with the State Corporation Commission, with the payment amounts for participating home batteries still to be set6.

The practical effect is that the arithmetic on a battery is now a local question, not a federal one. Where you live, and who your utility is, decides most of what is available.

Home battery backup cost: the federal 30% credit is gone

The Section 25D residential clean energy credit covered 30% of solar panels, solar water heating, battery storage of at least 3 kWh, geothermal heat pumps, small wind and fuel cells, uncapped and nonrefundable with a carryforward. Standalone battery storage only became eligible through the Inflation Reduction Act of 20223. Under Public Law 119-21, the credit will not be allowed for any expenditures made after December 31, 20251. There is no phase-down and no partial 2026 credit2.

The IRS has been explicit about the timing trap: if a taxpayer paid for the property on or before December 31, 2025 but installation was completed after that date, the expenditure is treated as made after December 31, 2025, which prevents claiming the credit1. Homeowners who installed a battery storage system in 2025 are in a different position and can still claim the credit on their 2025 federal return using IRS Form 56953.

You will still find pages saying otherwise. One utility-rebate aggregator page covering Pepco in D.C. states that the Energy Efficient Home Improvement Credit (25C) may cover up to 30% of battery storage costs subject to annual limits4. That conflicts with the IRS, which states 25C will not be allowed for any property placed in service after December 31, 20251. Go by the IRS.

Maryland home battery backup rebate: reserve before you install

Maryland's Energy Storage Income Tax Credit is finished. The Maryland Energy Administration's own page carries the notice that the program is inactive as of the end of calendar year 2024 and is no longer accepting applications, per state law9. HB 1214 of 2024 had extended the credit for two additional tax years through tax year 2026 and delayed the grant program to January 1, 202712, but MEA states the program went inactive after CY2024 regardless9.

Several commercial guides have not caught up. A 2026-dated This Old House guide still tells Maryland homeowners they can access a 30% Energy Storage Income Tax Credit up to $5,000 and stack it with the federal credit10, and a SolarReviews guide lists the same 30% up to $5,000 figure11. Both conflict with MEA's notice9.

What is actually open is the Fiscal Year 2027 Residential and Commercial Energy Storage Program, listed as now open in the My MEA Application Portal13. The structure is the part that catches people: it is a rebate program, and to be eligible an upfront program reservation is required prior to installation13. Install first and you have forfeited the award. The target audience is residential households, commercial and nonprofit organizations, the deadline is 3:00 PM Eastern Time on May 31, 2027, and the portal may close earlier if budgeted funds are fully requested13. More detail sits on our Maryland solar incentives page.

Virginia: Dominion's virtual power plant pilot and what it may pay

Dominion Energy's Virginia subsidiary was required to propose a virtual power plant pilot of up to 450 MW under a state law signed May 2 by Gov. Glenn Youngkin. Residential, commercial and industrial customers are eligible, and the pilot must include incentives for at least 15 MW of residential battery additions5. The law was introduced as HB 2346/SB 1100 and applies only to Dominion Energy Virginia5.

The sequence runs like this: Dominion had to petition the SCC for the pilot by December 1 and propose a program tariff for residential, commercial and industrial customers by November 15, 20265. Dominion filed the pilot with the SCC in December 2025, and the specific payment amounts are expected in the November 2026 tariff filing6. One account describes the pilot as on track to start enrolling Virginia homes around late 20266.

So the value of enrolling a home battery in the Dominion VPP is a known unknown that becomes known with that tariff filing. The 15 MW residential floor is not large5, which is an argument for being ready rather than waiting to watch how the first year performs. Our Virginia solar incentives page tracks the filings.

Virginia sizing and interconnection limits to know before signing

An eligible customer generator is capped at 25 kW for residential customers and 3 MW for nonresidential customers, for Dominion and Appalachian Power customers specifically7. Residential and eligible agricultural customer generators in Dominion's territory with a system exceeding 20 kW AC may be subject to a monthly standby charge, calculated using a methodology the utility develops and the SCC approves7.

Sizing rules differ by utility. Appalachian Power generally limits a system to 100 percent of expected annual use, while Dominion generally allows up to 150 percent, subject to current tariffs and interconnection requirements7. Cooperative residential systems are generally limited to 20 kilowatts7. These limits shape the solar side of a project more than the battery itself, but they decide what the battery has to work with.

For background on why Virginia is pushing distributed storage, Dominion's 2026 IRP Preferred Plan adds 3.5 GW of new energy storage over 20 years against a state short-duration storage target of 16,000 MW by 20458.

Home battery backup with solar, or a battery on its own

Both configurations exist in current programs. Maryland's open program is a Residential and Commercial Energy Storage Program, and its eligibility hinges on the upfront reservation rather than on pairing with panels13. Virginia's pilot mandate is written around residential battery additions5. On the federal side, standalone battery storage became eligible for the residential credit for the first time under the Inflation Reduction Act of 20223 — which no longer matters for expenditures made after December 31, 20251.

If you are comparing hardware configurations, our equipment page covers the panels, inverters and batteries we install.

What to verify before you sign anything

Three checks. First, confirm in writing which incentive a quote assumes; if a Maryland quote names the Energy Storage Income Tax Credit, it is citing a program MEA lists as inactive9. Second, if you are in Maryland, confirm the program reservation is filed before installation begins, not after13. Third, if you are a Dominion residential customer in Virginia, ask how the installer plans to handle VPP enrollment once the tariff is filed, and note that the payment amounts are not yet published6.

Questions people ask

Is there still a tax credit for home battery backup in 2026?

Not at the federal level. The residential clean energy credit will not be allowed for any expenditures made after December 31, 2025, with no phase-down and no partial 2026 credit12. If installation was completed after that date, the expenditure is treated as made after December 31, 2025 even if you paid earlier1. Systems installed in 2025 can still be claimed on a 2025 return using Form 56953.

Can I get a home battery backup system without solar?

Programs currently describe storage on its own terms. Maryland's open program is a Residential and Commercial Energy Storage Program with an upfront reservation required prior to installation13, and Virginia's pilot mandate is written around residential battery additions5. Standalone storage first became eligible for the federal residential credit under the Inflation Reduction Act of 20223, though that credit has since ended1.

Does Maryland still offer the $5,000 energy storage tax credit?

No. MEA's page states the program is inactive as of the end of calendar year 2024 and is no longer accepting applications, per state law9. Guides still listing a 30% credit up to $5,000 conflict with that notice1011. The replacement is the FY27 rebate program now open in the My MEA Application Portal13.

When will Dominion pay Virginia homeowners for battery backup?

Dominion filed its virtual power plant pilot with the State Corporation Commission in December 2025, and the specific payment amounts are expected to be set in a tariff filing due in November 20266. The law requires a program tariff for residential, commercial and industrial customers by November 15, 20265.

How large a system can I install in Virginia?

An eligible customer generator is capped at 25 kW for residential customers for Dominion and Appalachian Power7. In Dominion's territory, residential and eligible agricultural systems exceeding 20 kW AC may be subject to a monthly standby charge7. Cooperative residential systems are generally limited to 20 kilowatts7.

Sources

  1. FAQs for modification of sections 25C, 25D, 25E, 30C, 30D, 45L, 45W, AND 179D under Public Law 119-21, 139 Stat. 72 (July 4, 2025), commonly known as the One, Big, Beautiful Bill (OBBB) - irs.gov
  2. Home Energy Tax Credits 2026 — What Ended and What Survives - realcostiq.com
  3. Solar Battery Tax Credit 2026: What Changed After the OBBBA - solarpermitsolutions.com
  4. Pepco DC Battery Storage Rebate - ohmsnap.com
  5. Virginia utility-scale VPP pilot mandate is first amid national push - utilitydive.com
  6. Dominion's Virtual Power Plant Is Coming to Virginia - Virtue Solar - virtuesolar.com
  7. Virginia Solar Permit and Interconnection Requirements - greenlancer.com
  8. Dominion Plans 3.5 GW of Storage Against Virginia’s 16,000 MW Target, Says the Full-Storage Case Costs $6.3 Billion More - mgrid.org
  9. Maryland Energy Storage Income Tax Credit - energy.maryland.gov
  10. Maryland Solar Incentives, Tax Credits & Rebates (2026 Guide) - thisoldhouse.com
  11. Guide to Maryland Solar Incentives & Tax Credits in 2026 - solarreviews.com
  12. HB 1214 Department of Legislative Services Maryland General Assembly - mgaleg.maryland.gov
  13. Residential and Commercial Energy Storage Program - energy.maryland.gov
  14. MD SB970 - billtrack50.com
  15. Maryland Solar Incentives, Tax Credits & Rebates 2026 - energysage.com
  16. Solar Incentives & Financing in Maryland - Solar United Neighbors - solarunitedneighbors.org
  17. Does Maryland offers a tax credit for solar power installation/use? If so, how do I know if this has been credited to my MD State return? thanks! - ttlc.intuit.com
  18. Maryland Residential and Commercial Energy Storage Grant Program - solarsme.com
  19. Maryland Solar Incentives 2026: Tax Breaks, SRECs & Net-Metering Deadline - ecogenamerica.com
  20. Residential Clean Energy Credit 2026 Explained - Anker SOLIX US - ankersolix.com

See what solar can do for your home · Check your roof score

More from the Dispatch