Replacing row crops with perennial bioenergy crops may reduce nitrogen (N) loading to surface waters. We estimated the benefits, costs, and potential for replacing maize with switchgrass to meet required N loading reduction targets for the Chesapeake Bay (CB) of 26.9 Gg<
sup>
-1<
/sup>
. After subtracting the potential reduction in N loading due to improved N fertilizer practices for maize, a further 22.8 Gg reduction is required. Replacing maize with fertilized switchgrass could reduce N loading to the CB by 18 kg ha<
sup>
-1<
/sup>
y<
sup>
-1<
/sup>
, meeting 31% of the N reduction target. The break-even price of fertilized switchgrass to provide the same profit as maize in the CB is 111 $Mg<
sup>
-1<
/sup>
(oven-dry basis throughout). Growers replacing maize with switchgrass could receive an ecosystem service payment of 148 ha<
sup>
-1<
/sup>
based on the price paid in Maryland for planting a rye cover crop. For our estimated average switchgrass yield of 9.9 Mg ha<
sup>
-1<
/sup>
, and the greater N loading reduction of switchgrass compared to a cover crop, this equates to 24 dollars Mg<
sup>
-1<
/sup>
. The annual cost of this ecosystem service payment to induce switchgrass planting is 13.29 dollars kg<
sup>
-1<
/sup>
of N. Using the POLYSYS model to account for competition among food, feed, and biomass markets, we found that with the ecosystem service payment for switchgrass of 25 $ Mg<
sup>
-1<
/sup>
added to a farm-gate price of 111 dollars Mg<
sup>
-1<
/sup>
, 11% of the N loading reduction target could be met while also producing 1.3 Tg of switchgrass, potentially yielding 420 dam<
sup>
3<
/sup>
y<
sup>
-1<
/sup>
of ethanol.