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Jan 08, 2020

Community Solar in Maryland: Net Metering and the Community Solar Pilot Program

Maryland has long been a clean energy leader and redoubled its efforts in 2019 by increasing its Renewable Portfolio Standard (RPS), and creating the largest solar carve-out in the country. In passing the Clean Energy Jobs Act, Maryland committed to generate 50% of its electricity from renewable sources by 2030, of which 14.5% must come from solar resources.

In order to demonstrate compliance with the state’s solar carve-out, the state’s regulated utilities must procure and retire a set number of solar renewable energy credits (SRECs) each year from eligible solar projects. For each megawatt-hour of electricity generated from a solar project, the system owner receives one SREC, which represents the environmental benefits of that solar generation. These SRECs can then be traded in a market, providing a source of revenue for project owners.

Maryland continues to use net metering as the mechanism for compensating solar owners/lessors for the energy generated by their systems. Net metering allows electric customers throughout the state to offset their energy use with the energy generated from their own solar systems. For net metering customers, energy produced but not used on-site is sent to the electric grid in exchange for credits that can be applied to future utility bills. The system owners/lessors continue to receive electricity from their local utility grid and their monthly electric bill is based on the difference between their system’s solar generation and their own electricity usage.

How does Maryland’s net metering work with community solar? In 2017, Maryland launched a three-year community solar pilot program which provides an opportunity for electric utility customers to support renewable energy through virtual net metering.

Like net metering, virtual net metering allows Maryland electric customers to receive credits on their utility bill from solar projects that are not located on-site, such as community solar farms. Nexamp community solar subscribers receive virtual net metering credits based on the production of their share of the solar farm. These credits help offset the community solar subscriber’s electricity utility charges and Nexamp charges for the credits at a 10% discount.

Like many other community solar programs, Maryland structured its program to ensure that residents that have historically been shut out of the clean energy economy renewable energy would benefit, setting aside a portion of the program’s capacity for projects serving low- and moderate-income customers. Given the success of the initial years of the pilot program, just this past year, Governor Larry Hogan signed into law HB0683, which modified and extended the state’s community solar pilot program through 2024.

To learn more, watch Nexamp’s guide to community solar

By increasing their renewable energy goal and extending the community solar pilot program, Maryland is representing a commitment to clean energy for the future.

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