Solar Energy

RPS Goals

Maryland’s RPS requires that 2% of the state’s energy come from solar, by 2020. In terms of installed capacity, the 2% solar goal amounts to over 1,200 MegaWatts (MW) of solar energy which can be met by net-metered systems supplying energy to homes and businesses, and utility-scale systems supplying energy to the power grid. 

At the end of 2012, Maryland had 106 MW of installed capacity, with net-metered and utility-scale solar each contributing about half of that capacity. 

If each sector grows at the same rate, the solar energy growth trajectory through 2020 could resemble the graph shown at right. Of interest: By mid-March, Maryland had nearly 120 MW of grid-connected PV—about 10% of its 1,200 MW goal.  So, Maryland still has to meet 90% of its solar goals in 6.75 years.

 

Market Sectors

Net-metered solar—meaning solar energy systems, under 2 MW, placed near where they are supplying energy to a home or business—has many benefits:

      • It allows consumers to save money by offsetting conventional electricity at full retail rates.  Solar photovoltaics (PV) typically have a payback of around 7 years, after which the consumer receives virtually free electricity for 13-23 years. 
  • Maryland’s thriving solar industry has created 2,000 jobs by 2013—most of them associated with smaller, net-metered solar energy projects.  The solar industry will create over 10,000 jobs by 2018.
  • A German study examined the “value creation” of different kinds of clean energy to a community’s economy. Translating those results to Maryland, a model 5 MW solar PV system costing $9.6M would create $16.1M in value to the local economy from taxes, profits, and job income.
  • A wide deployment of net-metered solar throughout the state will reduce peak energy demand from conventional power plants since solar energy production is highest on hot sunny days, coinciding with the highest level of cooling demands from air conditioners.

Utility-scale solar—in the form of large “solar farms”—has added a significant amount of solar energy recently.  In 2012 alone, two solar farms have added 45 MW of capacity.  Utility-scale solar also has many benefits:

  • Economies of scale allow these larger systems to be installed at lower costs compared to smaller net-metered solar systems.  
  • Solar is a source of clean energy, producing zero greenhouse gas emissions. 
  • By displacing significant amounts of conventional energy, utility-scale solar also displaces the pollution and risks associated with conventional energy.
  • Utility-scale solar energy can provide a hedge against rising conventional energy costs for a large number of energy consumers.

A new class of solar energy consumers may be developing in Maryland.  For home owners without direct access to solar resources, “community solar” allows home owners to buy solar energy from a nearby PV system.

SRECs

A vital part of Maryland’s solar market development strategy has been to create a self-sustaining, free

market-based mechanism to incentivize solar generation.   

As noted above, Maryland’s RPS includes a goal of 2% for solar (electric or thermal) energy generated in-state.  For each MWh of solar energy generated, a Solar Renewable Energy Credit (SREC) is also generated.  SRECs have a useful life of three years, e.g. the year of generation and the following two years, during which the solar generator can sell the SREC to qualified electricity suppliers.  SRECs provide a valuable income stream to owners of solar energy facilities, small and large, and can contribute to off-setting investment costs.  

Electricity suppliers must purchase and retire SRECs in order to meet their compliance obligations under the law, or pay a Solar Alternative Compliance Payment (SACP) for any shortfalls in SREC purchases.

The State has taken several steps to maintain a steady and predictable SREC market, which solar developers need to finance projects.  Among those steps are:

  • The passage of legislation in May 2012 that accelerated the solar compliance requirements for the period from 2013 - 2020 moved up the 2% solar goal attainment date from 2022 to 2020. The requirement ramps up progressively over time in annual increments from an initial requirement of 0.005% in 2008, to 0.025% in 2010, and so forth towards the ultimate 2% by 2020 requirement.  
  • A policy position that SRECs associated with the 16 MW PV system at Mount St. Mary's University would most likely not be introduced into the market, but sold only as a “last resort,” e.g. in case of dire financial circumstances.

Industry Partnerships

MEA actively engages with the local solar industry to improve compliance issues, to encourage local manufacturing, to incentivize project development, to initiate targeted workforce training, and to analyze policies to further develop the solar market.  

  • MEA’s Sunburst Initiative helped public building owners and managers add 8.9 MW of solar PV to the State’s portfolio by 2012, primarily through partnering agreements between State agencies and private sector parties.  MEA will provide ongoing technical assistance to the Department of General Services and the University System of Maryland as they procure competitively sourced solar. 
  • MEA is working closely with the Maryland-DC-Virginia Solar Energy Industry Association to engage Maryland counties and other authorities having jurisdiction on expedited and standardized permitting and inspections of solar energy projects. 
  • MEA worked with the local solar industry to analyze the costs, benefits, and efficacy of “Community Energy Generating Facilities” as one way to allow home owners without direct access to renewable resources to still be able to purchase renewable energy from nearby installations. 
  • MEA is working closely with Department of Business and Economic Development (DBED) and several renewable energy industries to train the workforce of tomorrow, to meet the expected surge in renewable energy installations over the next few years.
  • MEA created the Clean Energy Economic Development Initiatives in partnership with Maryland Clean Energy Center and DBED to attract emerging clean energy companies, such as thin-film solar manufacturers and other component manufacturers, which could cluster and grow Maryland’s solar expertise through economic development loans and grants. 

 

Sustainability Frameworks

Solar energy, combined with Geothermal Heating & Cooling (GHC) systems, can contribute to sustainability goals set by programs such as the U.S. Green Building Council’s Leadership in Energy and Environmental Design (LEED), Net Zero Energy Homes and Buildings, and the Living Building Challenge. 

 One elementary school in Richardville, Kentucky leveraged green design with solar energy and GHC to become the nation’s first Net Zero Energy School, which means that the school generates more energy than it consumes over the course of a year.   

 Apply for a Solar Grant

Questions?

Contact Clean Energy Program Manager Doug Hinrichs via email at dhinrichs@energy.state.md.us or phone at 443-694-1465.