Energy 101

The Energy 101 graphic highlights questions from the text below.Wondering where to charge your electric vehicle? Want to know the difference between a kilowatt and a kilowatt-hour? Not sure how to choose your own electricity provider? Find the answers to these questions and more in the Maryland Energy Administration’s Energy 101. Energy 101 is an energy guide for Maryland. Energy 101 encourages you to explore Energy Basics, browse Consumer Choices, and delve into Energy Policy. There are graphics, links to additional energy information, and source material that provides even more detail on the topics you’ve learned about here.

If you have additional questions, please take a look around the rest of the MEA website, or email us directly at meainfo@energy.state.md.us.


 

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Energy Basics

1. What’s the difference between a "watt" (W), a "kilowatt" (kW), and a "kilowatt-hour" (kWh)? What is a megawatt-hour (MWh)? 

A watt is the basic unit of measurement for electricity in an instant. To measure electricity in larger quantities, the following units of measurements are often referenced:

  • 1,000 W = 1 kW
  • 1,000,000 W = 1,000 kW = 1 MW

The kilowatt-hour is a unit of electricity (kW) that is delivered over time.  The kilowatt hour (kWh) is most commonly known as a billing unit for energy delivered to you by your electricity provider, over the course of your billing cycle.  For example, a heater rated at 1 kilowatt operating for two hours uses two kilowatt-hours of energy.  Using a 60 watt light bulb for one thousand hours consumes 60 kilowatt-hours of electricity.

Similarly, one megawatt-hour is 1,000 kilowatts used or delivered in an hour. Megawatt-hours are typically used to describe the energy delivered by a power plant over time. For example, the Calvert Cliffs power plant, when operating at full capacity for one hour, produces 1,735 MWh of electricity that can be used in Maryland.

2. Where does Maryland’s electricity come from? 

Maryland imports approximately 30% of its electrical energy from surrounding states. Maryland is part of the Pennsylvania-New Jersey-Maryland (PJM) Interconnection system, or power grid. PJM encompasses 13 states and the District of Columbia. Within PJM there is approximately 163,000 MW (see definition of MW) of electricity generation serving more than 50 million people. To put it in perspective, there is enough power generated in PJM to light 2.7 billion 60W light bulbs at once.

Within Maryland, the state generates nearly 60% of its electricity needs from coal. Coal-fired power plants contribute approximately 5,000 MW of electricity in the summer (when demand for power is at its highest with air conditioners running). There are also two nuclear power plants at Calvert Cliffs, which provide 29% of the electricity produced in Maryland, for a total of 1,829 MW. Renewable resources, including hydroelectric plants, wind farms, and solar cells contribute 6.6%, or roughly 900 MW of electricity generated inside Maryland. The following chart reflects the various fuel sources of electricity generation within Maryland.

The following chart reflects the various fuel sources of electricity generation within Maryland.

Source: Maryland Power Plants and the Environment: A review of the impacts of power plants and transmission lines on Maryland’s natural resources (CEIR-15)
3. How is electricity used in Maryland? 

In 2008, Marylanders used 63.3 million MWh (or 63.3 billion kWh) of electricity. In general, as more people live and work in Maryland, and as incomes grow, they collectively use more electricity.

Marylanders use energy for most of their daily activities. The U.S. Department of Energy (DOE) says that all energy consumption (electricity, gasoline, natural gas, fuel oil, and propane) in Maryland totaled 1,447 trillion British thermal units (Btus) in 2008, the equivalent of 436 billion kWh. This is approximately 1.5% of all energy consumed in the United States.

In Maryland, energy is consumed by four sectors. Transportation consumes the highest share of energy in Maryland, accounting for 31% of the State’s energy use. The commercial sector accounts for 29% of use, residential accounts for 28%, and industrial accounts for 12%.

The End-Use by Energy pie chart shows that the transportaion sector accounts for 31 percent of energy use, the residential sector accounts for 28 percent, the industrial sector accounts for 12 percent and the commercial sector accounts for 29 percent.

Of all energy consumed in the United States, about 20% is expended on the heating and cooling, lighting, and appliances in homes. Televisions are increasingly becoming a significant part of the energy use in homes. The U.S. Energy Information Administration (EIA) estimates that energy consumed through television use – approximately 5.3% of residential electricity use in 2006 - will grow to nearly 7.2% by 2030, making this appliance the most energy consuming product in the home. With accessory equipment such as cable boxes and DVD players, television-related energy use increases to around 10% in homes. This increase comes from: people watching more hours of TV; increased size of the average television screen (people have bigger TVs); and the fact that high-definition digital televisions use more energy than their analog predecessors. In fact, some large flat screen televisions draw as much power as a common refrigerator.

4. Where are power plants located in Maryland? 
Owner
Plant Name
Fuel Type
Nameplate Capacity (MW)
In-Service Date
Independent Power Producers
AES Enterprise Warrior Run Coal 229 1999
Allegheny Energy Supply R.P. Smith Coal 110 1947/1958
Baltimore Refuse Energy Systems Co. (BRESCO) BRESCO Waste 65 1985
Brookfield Power Deep Creek Hydroelectric 20 1925
Calpine Crisfield Oil 10 1968
Constellation Generation Group Brandon Shores Coal 1,370 1984/1991
Calvert Cliffs Nuclear 1,828 1975/1977
C.P. Crane Coal 415 1961/1963/1967
Notch Cliff Natural Gas 144 1969
Perryman Oil/Natural Gas 404 1972/1995
Philadelphia Road Oil 83 1970
Riverside Oil/Natural Gas 257 1951/1970
H.A. Wagner Coal/Oil/Natural Gas 1,059 1956/1989/1966/1967/1972
Westport Natural Gas 121 1969
Exelon Generation Compnay, LLC Conowingo Hydroelectric 506 1928/1964
INGENCO Newland Park Landfill Landfill Gas 6 2007
Mirant Chalk Point Coal/Natural Gas 2,647 1964/1965/1967/1974/1975/1981/1990/1991
Dickerson Coal/Natural Gas 30 1959/1960/1962/1967/1992
Morgantown Coal 1,288 1970/1971
Montgomery County Resource Recovery Facility
Waste 68 1995
Gude Landfill Landfill Gas 3 2009 (re-entered into service; orignal in-service date: 1985)
NRG Vienna Oil 183 1968/1972
Panda Energy Brandywine Natural Gas 289 1996
Pepco Engery Services Eastern Landfill Landfill Gas 4 2006
National Institutes of Health Landfill Gas 22 2004
Prince George’s County Brown Station Road Landfill Gas 7 1987/2003
Suez Energy North America Millennium Hawkins Point Oil/Natural Gas 10.5 2000/2002
  University of Md - College Park Oil/Natural Gas 27 2003
Publicly Owned Electric Companies
Berlin Berlin Oil 9 1961/1989/1999/2000
Easton Utilities Easton Oil 72.4 1954/1957/1961/1966/1968/1970/1973/1978/1989/1995/2004
Old Dominion Electric Cooperative (ODEC) Rock Springs Natural Gas 770 2003
Southern Maryland Electric Cooperative (SMECO) Chalk Point Turbine Natural Gas 84 1990
Self-generators
American Sugar Refining Co. Domino Sugar Oil/Natural Gas 17.5 1955/1959/2001
MD Department of Public Safety and Corrections Eastern Correctional Institution (ECI) Cogeneration Facility Wood Waste 5.8 1987/1988
Severstal Sparrows Point Natural Gas/Blast Furnace Gas 120 1949
New Page Luke Mill Coal 65 1958/1979
Solo Cup Solo Cup - Owings Mills Natural Gas 11.2 2002
Total 13,260.4  

Source: Maryland Power Plants and the Environment: A review of the impacts of power plants and transmission lines on Maryland’s natural resources (CEIR-15)

The Power Plant Locations in and Around Maryland graphic maps the location of power plants throughout the state.


Source: Maryland Power Plants and the Environment: A review of the impacts of power plants and transmission lines on Maryland’s natural resources (CEIR-15)

5. How old are Maryland’s energy generation facilities?

Nearly 70% of Maryland’s coal-fired electric generation is produced by power plants that are at least 30 years old. Of these plants, 22% have been operating for more than 50 years, representing about 12% of the state’s total generation. These plants are so old that when they were built, JFK was president and The Beatles had just played their first show.

Of the 81 electric generating plants in Maryland, 31 have been operating for less than 30 years, 11 have been operating between 30-40 years, 21 have been operating 40-50 years, and 18 have been operating for more than 50 years.

As Maryland’s medium- and long-term demand increases, new power needs to be developed from a diverse energy portfolio that is clean, renewable, and affordable. To attain those goals, we'll need to make smart, front-end decisions.

6. How does electricity reach my home?

Like driving on highways, electricity can only move around the state on a network of power lines (“transmission” and “distribution”). And, like driving, traffic jams occur from time to time. To reduce electricity congestion and electricity availability, Maryland is considering a number of new transmission projects (the equivalent of adding another lane to a highway). Three of these projects that would impact Maryland are: the Trans Allegheny Interstate Line (TrAIL); the Potomac-Appalachian Transmission Highline (PATH); and the Mid-Atlantic Power Pathway (MAPP). The Mid-Atlantic region has been designated as a National Interest Electric Transmission Corridor (NIETC). This designation means that additional transmission capacity is so critical that the Federal Energy Regulatory Commission (FERC), under limited conditions, may issue permits for regional transmission line projects that are deemed to be of national interest.

In addition to centralized generating stations such as those listed in the question, “Where are power plants located in Maryland?”, distributed generation is becoming more widespread. Distributed generation generally refers to consumers creating their own electricity at or near the point of consumption, avoiding transmission and distribution of the energy and avoiding purchasing electricity from the utility. This power is generally used to satisfy on-site electricity needs, such as for a house or a small office building. Distributed generation technologies include combustion engines, small wind, solar, small hydroelectric, and fuel cells. They can be used to take the place of electricity from the grid during times of peak demand or to reduce reliance on a local utility.

Electricity moves from the power plant to your home through a series of high-voltage power lines called the “electric grid.” “Electric generation” refers to the power plants creating the electricity from resources such as coal, wind, and the sun. “Electric distribution” refers to the power lines connecting your home to the power plant. Detailed coordination and planning of the transmission system is critical to maintaining electricity reliability and the ability to provide needed power supplies at reasonable prices.

The map below shows the extent of Maryland’s existing transmission network. The further the electricity must travel, the higher the voltage of the transmission line. As the power reaches your house, the electric companies lower the voltage to a “distribution” level, to make the power usable in your television, computer, and other items needing electricity. In this map, “kV” means “kilovolt” or 1000 volts of electricity. A volt is a unit of measurement analogous to the measurement of the pressure difference which creates water flow – the voltage, or “pressure difference,” determines how quickly electrons will travel through the circuit. The higher the voltage, the faster the electricity can move and the more efficiently it will move between points. But electricity moving at higher speeds is not usable for items like televisions, computers, and kitchen appliances. That’s why high voltage transmission lines send electricity large distances, and low voltage lines are used to deliver power to your house.

The Transmission Lines graphic maps power lines carrying greater than 115,000 volts throughout the state.

Source: Maryland Power Plants and the Environment: A review of the impacts of power plants and transmission lines on Maryland’s natural resources (CEIR-15)

PJM controls and coordinates the delivery of power throughout the region. The Federal Energy Regulatory Commission (FERC) regulates PJM, which determines the flow of power (“dispatching”) across the District of Columbia and all or parts of 13 states: Kentucky, Tennessee, North Carolina, Virginia, West Virginia, Maryland, Delaware, New Jersey, Pennsylvania, Ohio, Indiana, Illinois, and Michigan. PJM consolidates transmission needs into a single coordinated plan to ensure everyone has access to power. PJM creates 5-year plans to undertake transmission system upgrades, as well as a 15-year plan for upgrades to high-voltage circuits (i.e., 230 kV and above). The following map illustrates proposed transmission system upgrades in Maryland.

The Approximate Corridors for Proposed New Transmission Lines maps power line construction that is under consideration.

Source: Maryland Power Plants and the Environment: A review of the impacts of power plants and transmission lines on Maryland’s natural resources (CEIR-15)

7. Why is electricity cheaper in Ohio than in Maryland and more expensive in other places?

The cost of electricity has three components: generation (creating the electricity), transmission (moving the electricity long distances) and distribution (delivering the electricity to your house).

Generation costs are generally dependent upon how much it costs an operator to run the power plant. The main areas of generation cost include the fuel, maintenance, and the cost to pay for construction of the plant itself. In the case of renewable fuel resources, the cost of fuel is zero, and this factor is balanced with the capital cost of construction.

Transmission and distribution congestion, like a traffic jam along the highway, describes a situation in which lower cost power cannot reach its intended market because the transmission system is not able to carry the electricity. Typically occurring during periods of high demand (like hot summers when people are using their air conditioners), congestion results from a constraint along the transmission line. This transmission congestion can have a significant impact on location-specific prices of electricity in the wholesale (bulk) markets. Generators selling electricity in a zone with transmission congestion may be able to obtain higher prices than a generator with comparable operating costs located in a zone that is not subject to transmission congestion. Price differentials within the PJM regions are mainly due to congestion between the Western Region (Ohio), where abundant low-cost generation is located, and the Mid-Atlantic Region (Maryland), where the population is higher (requiring more electricity) and generation is comparatively less. PJM estimates that congestion added approximately $57.7 million in costs for BGE in 2007 and $66.6 million for Delmarva Power in that same year.

To reduce congestion and improve system reliability (reduce blackouts and loss of power), a number of new transmission projects are being proposed, three of which would affect Maryland: the Trans Atlantic Interstate Line (TrAIL), the Potomac-Appalachian Transmission Highline (PATH), and the Mid-Atlantic Power Pathway (MAPP). These projects are discussed in more detail above.

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Consumer Choice

1. What are these different charges on my electric bill?

The electricity industry is separated into three independent businesses: 1) generation and supply (creating the electricity), 2) transmission (moving the electricity long distances, and 3) distribution (delivering the electricity to your house). Customers are billed for each of the three separate functions, although most customers just receive one consolidated electric bill.

For a more comprehensive breakdown of your bill, visit your power company’s website to see how you pay for each of these pieces:

2. What can I do to reduce my monthly electricity bill? 

Of all energy consumed in the United States, about 20% is expended on the heating and cooling, lighting, and appliances in homes. You can easily reduce your electric bill with simple changes to your energy use. To discover easy ways to reduce your electric bill, read MEA’s Residential Energy Saving Tips and learn 15 things that will empower you to save money.

For example, most energy used in your house is for heating and cooling. An easy way to save money is to make your home more energy efficient. Install efficient windows and weather stripping, and lower your thermostat in the winter and raise it in the summer – these are all easy ways to save money by using less electricity for heating and cooling. By conducting a home energy assessment, you can find all the places where your home can be more energy efficient.

For information about conducting a home energy assessment, read MEA’s Energy Assessment suggestions or visit the Maryland Home Performance with ENERGY STAR website.

3. Where can I find financial assistance to help pay my electricity bill?

In these difficult economic times, an increasing number of Marylanders have found they need help with their utility bills. Whether it is the right information or financial assistance, there are resources available to you.

As a low-income customer, you may qualify for assistance from the Maryland Energy Assistance Program (MEAP) and the Electric Universal Service Program (EUSP) for your utility bills.

Visit the Maryland Office of the People’s Counsel website for consumer rights fact sheets, energy assistance applications, weatherization assistance program information and more. You can also call People’s Counsel at 1-800-207-4055.

Another resource is the Maryland Department of Human Resources’ Maryland Office of Home Energy Programs (OHEP) at or 1-800-352-1446.

4. Can I choose my own electricity provider, and if so, how?

Yes. Since the deregulation of the energy market in Maryland in 1999, Maryland residents have been able to choose who provides their gas and electricity. You may choose to buy electricity or gas from your local utility (like BGE or Pepco) or from an alternative energy supplier. A gas or electricity supplier may offer lower prices than your local utility, or may offer you options for electricity from renewable energy, such as wind or solar energy. All gas and electricity suppliers must be approved by the Maryland Public Service Commission (PSC) and comply with the PSC’s rules on marketing, solicitation, contracting, and all Maryland consumer protection laws.

Energy suppliers compete with your local utility to sell you electricity and/or natural gas. Suppliers sell directly to consumers, using the local utility’s distribution system (the power lines or natural gas pipes). You pay the local utility for the delivery service, and the supplier for the electricity or gas. Most often you will receive only one bill from the utility listing the prices of the distribution and generation separately.

You do not have to choose a new supplier. If you do not, then by default you will receive your electricity or gas supply from your local utility. If you do choose an energy supplier, the following still applies:

  • You will use the same wires to bring electricity into your home and you will still contact your local electric utility if the power goes out. Your electric utility will continue to respond to any emergency involving electric service.
  • You will use the same pipes to bring natural gas into your home, and you will still contact the local gas utility if you smell gas or have problems with your gas service. Your gas utility will continue to respond to any emergency involving gas service.

Websites and direct mail information from energy companies do not always make clear whether they are energy suppliers, energy brokers (a company that sells and trades energy in the wholesale marketplace but not directly to you as a user), or aggregators (a broker that acts on behalf of a group of customers, or multiple customers such as a homeowners association). There are important differences and you will always need to have a contract with an energy supplier if you do not purchase your electric or gas from your local utility. See the Maryland Office of the People’s Counsel (OPC) for a detailed description: What are Energy Suppliers, Brokers, Aggregators?

The OPC has a guide on Contracting for Electricity and Natural Gas Supply and pricing information for Electric Suppliers and Natural Gas Suppliers. It may be helpful to review the Guide and OPC’s price comparison information, and check with the Maryland PSC about licensed suppliers, before you make any decisions on contracting with a supplier.

5. Can I choose the electricity I buy to come from renewable resources only?

Yes. Some energy suppliers specialize in renewable energy contracts, and some offer a blend of renewable and non-renewable energy sources, depending on your needs.

The OPC has a guide on Contracting for Electricity and Natural Gas Supply and pricing information for Electric Suppliers and Natural Gas Suppliers. It may be helpful to review the Guide and OPC’s price comparison information, and check with the Maryland PSC about licensed suppliers, before you make any decisions on contracting with a supplier.

6. Can I generate renewable energy at my home?

Yes. You can generate renewable energy at your home by installing energy generating equipment like solar cells, small wind turbines, and geothermal technology. Businesses, government entities and industrial companies can also generate their own renewable energy.

 
7. Are there financial incentives to help me purchase renewable energy systems?

Yes. To encourage the growth of renewable energy in Maryland, the Maryland Energy Administration offers grants towards the purchase and installation of wind, solar, and geothermal systems. For a list of available grants, visit the MEA residential, business, state & local, or transportation webpages. Some examples of residential grants offered by MEA include:

8. Where can I find more energy-saving incentives from federal, state, and local sources?

The Maryland Energy Administration (MEA) website is a great resource for Maryland residents to find information and incentives that increase energy efficiency and renewable energy production across the State. The website is also an informational tool for non-Maryland residents to discover ways to make improvements on their own and join Maryland as it continues to lead by example on energy programs and goals. You can also contact MEA by email at meainfo@energy.state.md.us or by phone at 410-260-7655 or 800-72-ENERGY.

Another resource is DSIREUSA.org. DSIRE is a comprehensive source of information on state, local, utility and federal incentives and policies that promote renewable energy and energy efficiency. DSIRE was established in 1995 and is funded by the U.S. Department of Energy.

9. How do I apply for a clean energy grant?

Information on how to apply to MEA’s Clean Energy Grant Program is located on our website based on the consumer category:

To apply for a Clean Energy Grant, you or your selected contractor should fill out an application form and the supporting documents. These forms are sent to MEA as part of a complete application package. MEA reviews each application for completeness and accuracy. Incomplete or incorrect applications will be returned to you for correction. It is necessary that all requested information is supplied to avoid delays.

MEA will notify you after we receive your completed application. If there is a waiting list, your application will be automatically placed on the waiting list in the order it was approved. Once it is your turn to receive grant funds, you will receive a Grant Commitment Letter. This letter details the award information and effectively reserves your funding.

Once you receive the Grant Commitment Letter, you can then install your project. After installation, you and your installer should send in the completion package, which consists of the Completion Certificate and the requested items of supporting documentation. MEA will review the completion package for completeness and accuracy. If any information is missing or incorrect, the package will be returned without being processed. When the application is deemed complete, the information is sent to the Governor’s Finance Office to process payment to the applicant.

10. Where can I find a contractor to install my residential renewable energy system?

The number of contractors specializing in residential renewable energy system installations has grown to more than 300 in Maryland. MEA does not endorse or approve any specific contractors, but there are resources and associations you can use to find local contractors to install your renewable energy system.

11. How long does it take to receive my residential grant?

After MEA has received and accepted all required final grant documentation based on an installed system, grant payment is typically processed in 6-8 weeks. The entire process includes the initial application and review period, the length of which depends on the length of the waitlist. Upon application approval, the applicant has 180 days to finish the installation and submit to MEA all required documentation to receive the grant, which is typically processed in 6-8 weeks.

You can find the MEA published waitlist and instructions for application on the Solar Energy Grant Program web page.

12. Do I need a permit to install a windpower system in my back yard?

Yes. Local ordinances define what structures can be installed on properties. Visit the MEA website to find a list of Counties with Wind Ordinances. If you are an incorporated municipality, please check with your local planning and zoning office.

 
13. Where can I charge my alternative fuel/electric vehicle in Maryland?

On the MEA transportation webpage, you will find information about alternative fuel and electric vehicles in Maryland. Once there, it’s easy to find lists of biofuel fueling stations, ethanol (E85) fueling stations, and natural gas fueling (CNG) stations.

In addition, the U.S. Department of Energy (DOE) maintains an interactive map giving information and directions to biodiesel (B20 and above), compressed natural gas, electric, ethanol, hydrogen, liquefied natural gas (LNG) and liquefied petroleum gas (propane) fueling stations. To view the map, visit DOE’s Alternative Fuels & Advanced Vehicles Data Center.

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Energy Policy

1. What does the Maryland Energy Administration do for Marylanders?

Under the leadership of Governor Martin O’Malley, the Maryland Energy Administration (MEA) helps provide Marylanders with reliable, affordable clean energy. MEA provides funding and resources that help Marylanders save money while making smart energy-saving choices. We help Maryland save money and energy by assisting residents, businesses, and State and local governments reduce their statewide electricity demand. By promoting, encouraging and financially supporting the use of renewable energy and energy efficiency activities, we help decrease the amount of electricity that residents pay for, and increase the amount of clean, renewable energy deployed throughout the state.

MEA helps Maryland families and businesses discover ways to improve energy efficiency by offering federal stimulus money and other funds towards that end. For example, by adopting compact fluorescent light bulbs and replacing old appliances with EnergyStar-rated upgrades, Maryland residents can use less electricity, resulting in lower electric bills. Governor O’Malley’s EmPOWER Maryland goal of 15% reduction in our state’s energy consumption by 2015 is already making great strides in reducing energy use, while creating green jobs for our workers and helping to keep our State Smart, Green and Growing.

MEA also helps citizens, businesses, and governmental entities include renewable energy sources into homes and businesses across the State. The State’s goal is to generate 20% of its energy from clean, renewable sources like wind and solar, by 2022 is being realized throughout Maryland. Since 2006, the amount of solar PV systems installed in Maryland has increased 140 times over. MEA programs and grants help offset the upfront cost of installing solar, wind, geothermal, biomass, and other renewable energy systems.

2. What is the EmPOWER Maryland clean energy program, and what are its goals?

Under Governor Martin O’Malley’s EmPOWER Maryland initiative, the State of Maryland will reduce energy use by 15% by the year 2015. To help achieve this goal, the Maryland Energy Administration encourages residents to adopt the combination of energy savings measures that are most appropriate for their homes. In many cases, these measures do not require a large financial investment, and grants, rebates, and tax credits are available. For more information on how to save money at your home, see “What can I do to reduce my monthly electricity bill?”

As part of the EmPOWER Maryland legislation passed in 2008, five of Maryland’s utilities offer many programs to save your home or business energy – and money. Programs include lighting and appliance rebates for homeowners, home energy audits, commercial lighting rebates, and energy efficiency services for industrial facilities.

For more information, visit the MEA EmPower Maryland page or Governor Martin O’Malley’s StateStat Delivery Unit website.

3. How much renewable energy is generated in Maryland? 

As of 2010, there were more than 600 renewable energy facilities in Maryland supplying more than 700 MW of electricity. This represents approximately 5% of Maryland’s electricity coming from renewable sources. This is up from 24 facilities in 2006. (Source: Power Plant Research Project, 2010 Inventory of Renewable Energy Generators Eligible for the Maryland Renewable Portfolio Standard.) The effort to increase the use of clean renewable energy for the state creates green jobs and encourages a growing economy. Maryland currently offers incentives for private citizens, businesses, and industries to take advantage of solar, wind, biomass, landfill methane, geothermal, ocean, fuel cell, and hydropower resources. They include:

  • Tax credits for wind, geothermal, solar, hydropower, small irrigation, and municipal solid waste projects
  • Sales tax waiver for renewable energy equipment
  • Property tax exemption for solar and wind energy systems
  • Residential geothermal heat pump grants up to $2,000
  • Solar PV grants for residential and small commercial systems up to $10,000
  • Residential and small commercial solar water heating system grants up to $1,500
  • Commercial mid-size solar PV system grants up to $50,000
  • Solar water heating system grants up to $25,000
  • Mid-sized wind energy grants up to $75,000

To further encourage renewable energy generation in Maryland, in 2008 Maryland enacted Renewable Portfolio Standard legislation, requiring Maryland electric suppliers to provide their customers with a gradually increasing portion of their electricity from renewable energy. This obligation is met through “Renewable Energy Credits,” or RECs (the tool that represents 1 MWh of renewable energy produced, like a stock certificate representing one share of stock in a company), or through alternative compliance payments (ACPs) credited into the Maryland Strategic Energy Investment Fund (SEIF) to support renewable energy projects in Maryland. Utilities must pay the ACP if they do not meet the renewable energy goals required by state law.

In 2010, the State of Maryland chose to lead by example in the execution of its renewable energy policy. Together, MEA, the Maryland Department of General Services, and the University of Maryland collectively launched the Generating Clean Horizons initiative to increase the amount of installed clean energy in Maryland. In Generating Clean Horizons, Maryland committed to buy a certain amount of its own electricity needs at state facilities from renewable sources to meet the needs of state offices. Maryland government facilities purchase clean energy generated in Maryland at competitive prices, offered through contracts by private industry. This arrangement offers renewable energy developers the certainty needed to finance these new projects, which directly results in new jobs and tax revenue for all of Maryland.

4. What are Maryland’s clean energy goals?

Maryland’s clean energy goal is to generate 20% of its electricity from clean, renewable sources by 2022. In 2008, Maryland put its clean energy goals into law through the Renewable Portfolio Standard (RPS). There are several ways the State can achieve this goal. This includes generating at least 2% of its electricity directly from solar energy. Maryland also looks to other renewable energy sources as well, including existing biomass resources (such as forestry waste, agricultural crops, municipal waste, and poultry litter) and the development of onshore wind projects. In addition, the State also aggressively supports and pursues the development of large offshore wind farms.

In 2010, the State of Maryland chose to lead by example in the execution of its renewable energy policy. Together, MEA, the Maryland Department of General Services, and the University of Maryland collectively launched the Generating Clean Horizons initiative to increase the amount of installed clean energy in Maryland. In Generating Clean Horizons, Maryland committed to buy a certain amount of its own electricity needs at state facilities from renewable sources to meet the needs of state offices. Maryland government facilities purchase clean energy generated in Maryland at competitive prices, offered through contracts by private industry. This arrangement offers renewable energy developers the certainty needed to finance these new projects, which directly results in new jobs and tax revenue for all of Maryland.

For more information on renewable energy development in Maryland, visit Governor Martin O’Malley’s StateStat Delivery Unit website.

5. What is the Renewable Portfolio Standard, and what does it mean to me?

The Renewable Portfolio Standard (RPS) is a policy goal that specifies that 20% of the electricity sold in Maryland must come from renewable resources by the year 2022. At least 2% of the electricity must come from solar resources that are located in Maryland. The remaining 18% can come from other renewable technologies such as wind, biomass, landfill gas, anaerobic digestion, and other approved technologies located in the wider PJM region. Annual RPS requirements increase each year until the 20% requirement is reached in 2022.

The RPS is designed to provide a market incentive encouraging new renewable energy construction. RPS compliance is provided through a mechanism of Renewable Energy Credits (RECs). RECs represent 1,000 kWh of renewable energy generation. Each energy supplier serving Maryland consumers must purchase enough RECs to satisfy their RPS requirement. If an energy supplier does not purchase enough RECs, they must pay a penalty called an Alternative Compliance Payment. The penalty is routed back to MEA to use for additional clean energy grants.

The RPS is important as it encourages the generation of clean, non-polluting energy. It also makes Maryland’s electric supply more dependable because the resources are distributed. This eases congestion on the electricity distribution network and can increase the grid’s reliability in extreme weather conditions. For more about the distribution of electricity, see the question, "How does electricity reach my home?"

For more information on the RPS, visit the Public Service Commission’s Annual RPS Reports.

6. What is net metering?

There is a fundamental difference in how renewable energy systems produce electricity and how homeowners consume it. Solar panels don’t produce electricity at night, and wind systems produce the most electricity during the winter months. Because homeowners don’t consume electricity in the same patterns, it is unlikely that the system production and homeowner consumption will exactly match what is produced at a particular time. Net metering allows a customer with their own distributed generation renewable energy system to offset their energy production against their energy consumption over a period of time (typically a year).

When net metering is used, utilities must install electric meters that can move in two directions. Typically, your meter only spins in one direction, forward, to reflect your home’s use of electricity. In net metering, the meter spins forward when you are using more energy than your system is producing (such as at night), and spins backwards when producing more electricity than you are using (such as during cool spring days or when no one is home). The local utility allows the generation and consumption to “net” against each other for a defined period, and the customer only pays for the net amount used.

For example, if over the course of a month a homeowner consumes 1,000 kWh, and their renewable energy system produces 800 kWh, they will only be billed for the 200 kWh difference. If the homeowner produces more energy than they use, they can roll the kWh credit forward for up to 12 months to offset future consumption.

More information on net metering can be found on your local utility’s website. Search for the term "Net Meter" or "Net Metering."

7. How much money is available for renewable energy grants in Maryland?

MEA’s clean energy grant programs are funded through several different sources, such as federal stimulus funding (the American Reinvestment and Recovery Act, which is available through 2011), the Strategic Energy Investment Fund (SEIF), and from Alternative Compliance Payments contributed by electricity generators that do not meet the RPS.

 
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Sources

Governor O’Malley’s StateStat. Delivery Unit. Retrieved Nov. 2010 from
http://www.statestat.maryland.gov/gdu.asp

Maryland Energy Administration. Maryland Energy Outlook, Jan. 2010. Retrieved Dec. 2010 from
http://www.energy.state.md.us/documents/MEOFINALREPORTJAN2010.pdf

Maryland Office of the People’s Counsel. Consumer Corner. Retrieved Nov. 2010 from
http://www.opc.state.md.us/opc/ConsumerCorner.aspx

Maryland Power Plant Research Program. Electricity in Maryland – Fact Book 2008. Retrieved Nov. 2010 from http://esm.versar.com/pprp/factbook/factbook.htm

Maryland Power Plant Research Program. Maryland Power Plants and the Environment: A review of the impacts of power plants and transmission lines on Maryland’s natural resources (CEIR-15). Retrieved Nov. 2010 from
http://esm.versar.com/pprp/ceir15/intro.htm

U.S. Energy Information Administration (EIA). Maryland State Energy Profile. Retrieved from http://www.eia.doe.gov/state/state-energy-profiles.cfm?sid=MD.

Note: Energy 101 was last updated Thursday, March 17, 2011.

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