Maryland Solar Energy Credits Start Year with New High
Solar Renewable Energy Credits (also known as SRECs), hit a new high in Maryland to start 2020. For a home or business that has a $200 monthly SMECO electric bill, that will typically translate into cash incentives that are usually around $1,200 to $1,400 per year.
Maryland is one of several states with a regulation called renewable portfolio standard (RPS). An RPS requires Maryland electric utilities to produce a specific percentage of electricity from renewable sources. Utilities that fall short, can purchase large quantities of credits from brokers who make smaller credit arrangements with home and business owners.
In January 2020, Washington, DC-based SolSystems, one of several SREC brokers, set the price of SRECs at $77 per megawatt of solar energy produced. This marks four straight months of increase from the $62 October price, but that is a far cry from the $15 price per credit just a year ago.
The spike began when the Maryland legislature overwhelmingly approved the 2019 Clean Energy Jobs Act, committing to 50% renewable energy by 2030. In the 2020 legislative session. Governor Larry Hogan (R) proposed legislation he calls the Clean and Renewable Energy Standard (CARES) to reach 100% renewable energy by 2040.
“Now is a perfect storm of incentives,” says Steven Tripp, of Leonardtown, Maryland-based Energy Select. “We figure there is at least a good ten-year run with these high SREC prices. Put that together with the federal tax credit that goes from 26% in 2020 to 22% in 2021 before it disappears in 2022, and this is the best time to get into solar.”
Tripp says that business about doubled for Energy Select in the last part of 2019 due in large part to the SREC increases and the expiring 2019 30% federal tax credit, “I guess the Clean Energy Jobs Act did what it was supposed to do!”