Solar Power in Maryland

While Maryland may be famous for blue crab and Chesapeake Bay lighthouses, something else has been lighting up the landscape in this Mid-Atlantic state the last several years.

You might never guess it but Maryland has become one of the nation’s solar powerhouses. This is due to the combined efforts of the Governor O’Malley, the Maryland legislature, and the Maryland citizenry who have all exhibited a contagious can do attitude when it comes to meeting, and sometimes exceeding, solar goals.

In 2011, the Solar Energy Industries Association (SEIA) recognized Maryland as one of the leading states in the U.S. for solar projects. In fact, the SEIA estimated that Maryland has increased its solar capacity by an amazing 20,000% in a short span of 5 years!

This dramatic increase occurred between 2006 and 2011 and is due in large part to the numerous incentives, mostly in the form of rebates and tax credits, Maryland offers consumers and businesses who invest in solar PV and in solar hot water. In fact, Maryland has been recognized as one of the top states in giving incentives. Initial investment costs can sometimes deter otherwise interested parties from starting solar projects. Incentives, which essentially refund part of the start-up costs, go a long way toward over-coming this initial hurdle. As a result, many solar projects get done in Maryland because of the generous incentives offered that would have never gotten done otherwise. The governor and the legislators view this investment in Maryland solar energy as a critical investment in the future.

The Maryland Energy Administration (MEA) offers a $1000 rebate to those who install residential solar PV systems. They also offer a $500 rebate for the residential installation of solar hot water systems. Businesses also qualify for rebates to help defray start-up costs. Commercial solar PV installations receive $60/kilowatt, up to a maximum of $6000. Commercial solar thermal systems receive an incentive of $20/square foot, up to a maximum of $5000. In 2007, the Maryland Legislature also voted to give those who install solar a property tax credit. This allows residents to make their homes more valuable by installing solar without having to pay higher taxes to do so.

Maryland solar energy got its biggest boost from its very ambitious Renewable Portfolio Standard (RPS). As enacted in 2004, the RPS mandated that by year 2022 at least 20% of the power used in Maryland would come from renewable sources. The RPS was amended in 2007 to require utilities to get at least 2% of their renewable energy from solar power. On April 11, 2012 the the legislature voted to amend the RPS once more and to accelerate the growth of solar energy. The new goal is to reach the 2% solar energy threshold by 2020 instead of 2022 and Maryland is right on track to do so.

Because of the laws that have been enacted in Maryland, the utility companies are motivated to purchase solar energy from their customers because otherwise they will have to pay more. Maryland’s net-metering rules were amended in 2007 and are quite favorable to the investor in solar PV. Net-metering allows a solar PV system to be connected directly to the grid. Once connected, if the customer generates more kilowatts of electricity than they use, the utility companies are then required to credit the customer’s account for the surplus at the same rate the customer would pay the utility company. For obvious reasons, this is a very popular program.

Another way Maryland solar investors can recoup some of their investment is by selling renewable energy credits (SRECs). For every 1000 kilowatts generated with a solar PV system, one SREC is issued. The value of these SRECs are market driven so the value fluctuates but currently they are worth between $200 and $350. A typical 5 kilowatt solar PV system will generate between five and six kilowatts per year so most solar PV investors can make more than $1000 with SRECs.

The MEA is investing heavily in Maryland solar power projects and using these public funds to leverage substantial private investments. Maryland was one of the first states to require renewable energy be used in their government buildings. In 2001, they mandated that 6% of the energy used in their government buildings come from renewable sources. This included solar projects. For the last decade, the MEA has continued to fund government, commercial, and residential solar projects more heavily than most states. It is no wonder that Maryland solar power is not only thriving but leading the nation.