Maryland Cost Allocation Method (MCAM) Explained: What It Means for Your Solar Project

If you’re planning to go solar in Maryland, there’s a policy change you need to know about. It’s called MCAM, the Maryland Cost Allocation Method, and it affects the cost of connecting your solar system to the utility grid.

Most people haven’t heard of it yet. Some find out for the first time when they see a line item in their solar proposal that wasn’t there a few years ago.

To ensure this guide reflects what’s happening in Maryland’s solar market right now, we had it reviewed by Warren Miller, Paradise Energy’s Director of Sales & Marketing. Warren works directly with Maryland solar customers every day and has a front-row seat to how MCAM is affecting real projects across the state.

Here’s everything you need to know about MCAM, how it affects your solar installation costs, and why solar is still a smart investment in Maryland in most cases.

What Is MCAM?

MCAM stands for Maryland Cost Allocation Method. In plain terms, it’s a new way of handling the cost of grid infrastructure upgrades that are sometimes required when a property connects solar panels to the utility grid. That connection process is called interconnection.

The Maryland Public Service Commission (PSC) approved MCAM regulations in April 2026, with final rules taking effect on May 1, 2026. All four major investor-owned utilities in Maryland are now implementing it.

Why Did Maryland Create MCAM?

To understand MCAM, you first need to understand the problem it was designed to fix.

The Old Model: “Causer Pays”

Before MCAM, Maryland used a “causer-pays” model. The idea was simple: if your solar system triggered a grid upgrade (say, a transformer on your street needed to be replaced to handle the new energy flow), you paid for it. All of it.

That could mean tens of thousands of dollars in unexpected costs on top of your solar project. In many cases, those costs made the project financially unfeasible before construction even started.

There was another problem: the next solar customer to connect after those upgrades were completed benefited from them at no cost. One customer absorbed the full bill. The next customer owed nothing.

The New Model: Shared Cost Allocation

MCAM eliminates the causer-pays model and replaces it with a proportional cost-sharing approach. Instead of one customer getting stuck with the full bill, those grid upgrade costs are now spread across all solar customers connecting to that part of the grid, based on the size of their system.

The larger your system, the more you contribute. It’s a shared cost model designed to be more predictable and more fair.

Which Utilities Are Implementing MCAM?

MCAM applies to all four major investor-owned utilities in Maryland:

• BGE (Baltimore Gas & Electric)
• Delmarva Power
• Pepco
• Potomac Edison

In addition to the investor-owned utilities mentioned above, Maryland has two main electric cooperatives, Choptank Electric Cooperative and Southern Maryland Electric Cooperative (SMECO).  

Currently, Southern Maryland Electric Cooperative (SMECO) has also implemented an MCAM rider that became effective on May 1, 2026.  As of the date of this blog, Choptank Electric Cooperative has not implemented an MCAM rider.  

If you’re in Maryland and connecting solar to any of these utilities, MCAM applies to your project. Each utility sets its own fee structure based on its own infrastructure costs, and those fees are re-evaluated every year.

What Does MCAM Actually Cost?

For SMECO, there is a $54.22 per kW fee for primary (P-CAM) and a $1.87 per kW fee for secondary (S-CAM) customers. Most of Paradise Energy’s customers will be subject to the secondary fee. 

For the investor-owned utility companies, MCAM fees are charged in two ways depending on your customer type and system size.

Residential solar customers pay a flat fee per meter (per application). Commercial solar customers pay a per-kilowatt (kW AC) fee based on system size.

Here’s the current fee structure for each utility:

A Note on Primary vs. Secondary MCAM

You may hear the terms “P-CAM” and “S-CAM” referenced in your project documentation. Here’s a simple way to think about it.

The power grid has two layers: primary voltage lines (larger distribution lines that run through neighborhoods) and secondary voltage lines (smaller lines that connect directly to your building). MCAM addresses both layers separately.

Secondary MCAM (S-CAM) is what matters for most homeowners, farmers, and small commercial customers. It’s a flat fee per application for residential customers and a per-kW fee for small commercial customers connecting at secondary voltage.

Primary MCAM (P-CAM) applies to larger commercial or utility-scale projects connecting at primary voltage.

How Much Will MCAM Add to My Solar Project?

In most cases, MCAM adds roughly 8%- 10% to the total project cost for commercial solar installations.

For a project that doesn’t require any grid upgrades, which is the case for the majority of residential installs, that’s a real increase that wasn’t there before.

For projects that would have required expensive utility upgrades under the old model, MCAM can actually mean lower costs. Your interconnection costs are now predictable up front, and you’re only paying your proportional share rather than the full bill.

Real-World Examples

Scenario A: Projects that benefit from MCAM: A 120 kW commercial system that would have needed a $25,000 transformer upgrade under the old rules. Under MCAM, the fees came out to approximately $19,920, roughly $5,000 less than the old model would have cost.

Scenario B: Projects that pay more under MCAM: A 280 kW commercial system that would have required a $36,000 upgrade incurred MCAM fees of $46,480, over $10,000 more than the old model would have cost.

MCAM can cut both ways. The key takeaway is that your costs are now predictable from day one.

How Does MCAM Affect Residential, Commercial, and Agricultural Customers Differently?

Residential customers see the impact as a flat fee per application. At BGE, that’s $125. At Pepco or Delmarva Power, it’s closer to $230. For a typical home solar system, this is the simplest MCAM scenario.

Commercial and agricultural customers pay per kilowatt of system capacity. A larger system carries a higher dollar amount in MCAM fees. The percentage impact is similar across the board (roughly 8% to 10%), but the total cost grows with system size.

For example, a 100 kW commercial system in BGE’s territory would carry an MCAM fee of approximately $6,859. That same system in Potomac Edison’s territory would carry a fee of approximately $16,600.

This is why your specific utility territory matters when evaluating solar costs. A Paradise Energy solar consultant can walk through the exact MCAM fee for your project based on your location and system size.

Frequently Asked Questions About MCAM

Does MCAM change whether I should go solar right now?

No. All major investor-owned utilities in Maryland have already implemented MCAM. There’s no deadline to beat or urgency specific to MCAM. The rules are in place, and your installer can tell you exactly what your fees will be in your project quote. Solar is still a very good investment in Maryland.

Will MCAM slow down my interconnection approval?

Actually, the expectation is the opposite. MCAM is designed to reduce the number of interconnection rejections due to upgrade cost disputes, thereby helping speed up the process.

Are there any exemptions from MCAM?

Yes. MCAM applies to all distributed energy resource (DER) interconnection requests for secondary-voltage connections in Maryland. Notable exemptions include projects on a dedicated facility that would not benefit any other customers, and projects participating in Maryland’s Community Solar pilot program.

Is the MCAM fee the same at all utilities?

No. Each utility sets its own fee structure based on its historical upgrade costs and projected application volume. BGE, Delmarva Power, Pepco, and Potomac Edison each have different rates for both residential and commercial customers, as shown in the table above.

Will MCAM fees change over time?

Yes. Each utility re-evaluates its MCAM fees annually and adjusts them accordingly. The fee structure included in this article reflects current rates at the time of publication.

Is MCAM good or bad for solar customers?

That depends on your specific situation. If your project would have triggered expensive grid upgrades under the old model, MCAM is likely better for you. If your project doesn’t require upgrades, you’re contributing to the shared cost pool and will see a modest increase in project cost. 

The longer-term concern is that MCAM may incentivize system designs that include more upgrades, since those costs are now distributed, which could gradually push overall solar costs higher across the board.

How does Maryland’s approach compare to other states?

Maryland is ahead of the curve. Many states still use full cost-causer, which can make solar economically infeasible if a customer happens to be the first on a circuit that needs upgrades. Maryland’s proportional cost-sharing model is considered a consumer-friendly approach.

Is Solar Still Worth It in Maryland?

Yes. Surprise: a solar company saying solar is still worth it. But as electricity rates continue to rise, the case for solar only gets stronger. 

MCAM adds a line item to your project cost, but it doesn’t change the financial case for solar. The federal Investment Tax Credit (ITC), Maryland’s incentive programs, energy savings, SRECs, and long-term protection from rising utility rates — none of that changes because of MCAM.

What does change is that your interconnection costs are now predictable from day one. That’s actually useful when you’re planning a project.

Ready to See What Solar Looks Like for Your Property?

Whether you own a home, a farm, or a commercial building in Maryland, Paradise Energy Solutions can walk you through exactly what MCAM means for your specific project and show you what your investment looks like, with all costs included. Request your free solar site assessment to get started.