Green Driver State Incentives in Maryland

Maryland encourages residents to adopt eco-friendly driving habits by offering numerous green driver incentives—ranging from emissions test exemptions to full-time high occupancy vehicle (HOV) lane access, regardless of the number of passengers. If you drive an electric car, hybrid, or alternative fuel vehicle—or are in the market to buy a fuel-efficient car—read on for ways to save time and money as an eco-friendly driver.

MD's eco-friendly incentives and laws are ever-evolving, just like our state's general traffic laws. Be sure to bookmark this page and also check with your local Motor Vehicle Administration (MVA) and the Alternative Fuels Data Center (AFDC) for the latest.

Maryland Emissions Testing Exemptions

Under the Vehicle Emissions Inspection Program (VEIP), Maryland requires most vehicles to undergo either an on-board diagnostics (OBD) test or an idle tailpipe and gas cap test.

Maryland requires newly registered qualified hybrids to undergo VEIP testing at least 3 years following their model year. Additionally, all hybrids must undergo an inspection on the normal VEIP test cycle of 2 years.

To determine which test your vehicle needs, consult the VEIP General Information page. To locate the nearest emissions station, scroll down to the locator widget at the bottom of this page.

Auto Insurance Discounts for Eco-Friendly Driving and Green Vehicles

Some Maryland auto insurance providers offer car insurance discounts for having green driving habits and/or driving a fuel-efficient vehicle. Consult your auto insurance company about potential green vehicle discounts such as:

Hybrid auto discounts.
Alternative fuel vehicle (AFV) discounts.
Economy car discounts.
Low-mileage discounts.
Pay as you drive discounts.

It's possible to save up to 10% discount on car insurance for leasing or owning a hybrid or electric car. Keeping the yearly mileage low can get you even higher savings.

If your current Maryland auto insurer isn't giving you a break for driving an eco-friendly vehicle then you should . compare auto insurance rates online.

MD HOV Lane Access for Plug-In Electric Vehicles (PEV)

Drivers of approved plug-in electric vehicles can use Maryland's high occupancy vehicle (HOV) lanes at all times, even if they are traveling solo. Qualifying PEVs must:

Be capable of traveling at a maximum speed of at least 65 MPH.
Display a permit* issued by the Motor Vehicle Administration.

For more information see HOV incentive for PEV drivers.

MD State Tax Incentives and Federal Tax Credits

Maryland's green-minded drivers have a few opportunities to save money in the form of tax breaks:

Electric vehicle supply equipment (EVSE) tax credit.
Plug-in vehicle (PEV) excise tax credit.
Federal tax credits.

Read on for specifics. If you need help navigating your way through filing, consult a tax professional, the Comptroller of Maryland, or your local IRS Taxpayer Assistance Center.

Electric Vehicle Supply Equipment Tax Credit Program

Maryland residents and businesses can take advantage of a state income tax credit when buying an electric vehicle charging station. Through the Electric Vehicle Supply Equipment Tax Credit Program, eligible taxpayers can earn a tax credit. To apply:

Download and complete the appropriate Initial Credit Certificate application for residents or businesses.
Download and complete EVSE Form A.
Gather any required documentation mentioned in the application.
Mail all paperwork to:

Maryland Energy Administration
1800 Washington Blvd., Suite 755
Baltimore, MD 21230

The Maryland Energy Administration (MEA) offers the tax credit on a first-come, first-serve basis. For additional guidelines and info on claiming your tax credit, consult the MEA's program page.

Plug-In Electric Vehicles (PEV) Excise Tax Credit

Maryland offers individuals who purchase or lease a qualifying plug-in electric vehicle a one-time excise PEV tax credit of up to $3,000 while funds last. Even local businesses get a break if they qualify; the tax break is also good for up to 10 company vehicles.

The excise tax credit expires June 30, 2020. If you bought your new PEV through an MD auto dealer, the dealer will walk you through requesting the tax credit. However, if you bought a new electric vehicle from an out-of-state dealer, or if you inked a deal for a used PEV from a previous MD owner, download the Excise Tax Request for a Plug-In Electric Vehicle form and get the process underway soon.

To review the qualifying criteria and breakdown of tax credit amounts, refer to the MVA's page on plug-in EV excise tax credits. Or if you have questions, call the MVA Customer Service Center at (410) 768-7000 or (800) 492-4575 for the hearing impaired.

Federal Tax Credits for Fuel-Efficient Car Buyers

Maryland green-vehicle buyers can also take advantage of IRS tax breaks. Owners of the following fuel-efficient vehicles might be eligible for federal tax credits:

Electric cars (EV).
Hybrids.
Plug-in hybrids (PHEV).
Diesels.
Alternative fuel vehicles (AFV).

For specifics, refer to fueleconomy.gov.

Public, Commercial, and Non-Profit Agency Vehicles

Maryland Freedom Fleet Voucher (FFV) Program

The Maryland Freedom Fleet Voucher (FFV) Program provides financial assistance to drivers who purchase new and converted alternative fuel vehicles registered in Maryland and for public, commercial, or non-profit agency use.

Eligible vehicles include:

Dedicated compressed natural gas (CNG).
Dedicated liquefied natural gas (LNG).
Propane powered.
Hybrid electric.
Hydraulic hybrid.
Plug-in electric.

Funds are served on a first come, first serve basis, and vary based on fuel and gross vehicle weight (GVW). For example, a driver can receive up to $3,000 for a vehicle with an 8,500 lbs. GVW and $20,000 for a vehicle with a GVW of 26,001 lbs. or more.

Find applications and more at the Maryland Freedom Fleet Voucher Program website

Maryland Idle Reduction Technology Grant Program

The Maryland Idle Reduction Technology Grant Program provides financial assistance regarding idle reduction technology for commercial trucks.

The program helps pay for the purchase and installation of idle reduction technology for the truck dealer, distributor, and/or installer.

For more information about the Idle Reduction Technology Grant Program, including grant application and completion packages, visit the Maryland Idle Reduction Technology Grant Program website.

Pepco Plug-In Vehicle Charging Program

Pepco offers a Plug-In Vehicle program to help green drivers save money and reduce the strain on the electric grid. To qualify, you must:

Be a Maryland residential customer of Pepco.
Have your EV registered in Maryland.

Qualified customers can enjoy special programs for owning an EV. For more information on current programs visit Pepco’s EVsmart Program.

EV Charging Pilot—Baltimore Gas and Electric Company

Baltimore Gas and Electric Company offers an electric vehicle time-of-use charging rate through its pilot program. To volunteer for this pilot, you must:

Be a BGE residential customer.
Own or lease a qualifying plug-in electric vehicle.
Charge your EV via a connection to the BGE electric distribution system.
Charge your EV at your primary residence on a single time-of-use meter that is also used to measure the electricity of your whole house.

For specifics, consult BGE's Residential EV Time-of-Use Pilot Schedule.

Electric Vehicles and Recharging Equipment-Rebates and Tax Credit Bill

Through Fiscal Year 2024, the Electric Vehicles and Recharging Equipment-Rebates and Tax Credit Bill will:

Extend a tax credit on the purchase of a plug-in electric vehicle.
Provide a tax credit to most vehicles, and,
Enhance incentive for the purchase and installation of EV recharging station equipment.

The new tax credit is based on the vehicle's battery size.

Also, the breakdown for the recharging station equipment rebate program is as follows:

Residential Customers: Up to 50% of costs, not to exceed $700.
Commercial Entities: Up to 50% of costs, not to exceed $5,000.

For more information and program applications, refer to the MD Motor Vehicle Administration's Electric Vehicle Supply Equipment (EVSE) Rebate Program website.

Transportation & Climate Initiative of the Northeast and Mid-Atlantic States

Maryland is one of the 13 participating states that is part of the Transportation & Climate Initiative (TCI). The TCI is a collaboration of Northeast and Mid-Atlantic jurisdictions. Its aims is to increase the clean energy economy, decrease oil dependence, and lower greenhouse gas emissions that are related to transportation. You can read more about this initiative at the TCI's website.

Find a Nearby Maryland Emissions Testing Station

Locate the closest MD smog and emissions testing station with the widget below: