April 11, 2019
Maryland’s Clean Energy Jobs Act was passed by the Maryland legislature on April 9, 2019. With a 95-40 vote in the House and a 31-15 vote in the Senate, the bill now awaits approval or veto from Maryland State Governor, Larry Hogan.
If you’re the owner of a solar system or are considering installing a solar system, you may be wondering what impact, if any, this bill will have. Turns out, the Clean Energy Jobs Act, if signed, might make solar an even more profitable investment for you and could put more money in your pocket!
The Clean Energy Jobs Act, also known as SB 216, creates a new and enhanced Renewable Portfolio Standard (RPS) for Maryland. An RPS is a state law that requires utilities to produce a certain amount of electricity through clean and renewable methods.
In Maryland’s Clean Energy Jobs Act, the RPS is 50% by 2030. This means that by the year 2030, Maryland will produce 50% of its electricity using renewable methods, like solar and wind.
This bill also has a significant carve-out for solar. Carve-outs are portions of an RPS that specify how much electricity needs to be created by a specific method of clean energy production. In the Clean Energy Jobs Act, solar’s carve-out is 14.8%, which means 14.8% of Maryland’s power will come from solar energy by 2030. The current national average of electricity sourced by solar is 2.3 to 2.4%, so this increase of 12.4% is a substantial one.
According to the bill, the solar carve-out will gradually increase year-by-year to allow for the steady installation of solar systems across the state. However, the clean energy improvements won’t just plateau in 2030. Also in the bill is a requirement for the state to examine pathways to 100% clean energy by 2040.
For Maryland to meet the solar carve-out requirement of 14.8%, utilities will need to purchase SRECs from solar system owners. SRECs (solar renewable energy certificates) serve as proof that a certain amount of solar energy was generated.
Utilities are required to have enough SRECs to meet the solar carve-out per the Clean Energy Jobs Act. SRECs can be acquired in two ways: the utilities produce solar energy, or they can purchase the credit from someone else.
Businesses, farmers, and homeowners with solar systems receive an SREC for each mWh (1,000 kWh) produced by their system. Utilities can then purchase these credits from the solar system owners, which helps them meet the state’s standards.
With a large solar carve-out in Maryland’s Clean Energy Jobs Act, utilities will need to purchase more SRECs. This will drive the cost of the SRECs up, meaning solar system owners receive more money per mWh.
More money always sounds good, but will the Clean Energy Jobs Act go into effect? Though Gov Hogan vetoed an RPS increase in 2017, he cited it was related to the cost of the bill. However, the outlook for the Clean Energy Jobs Act appears to be more promising. It’s approximated that the bill would bring in nearly $250 million to Maryland’s economy from the federal investment tax credits in just one year alone.
Additionally, the Clean Energy Jobs Act is projected to bolster the clean energy economy. It’s estimated the bill would spur on 20,000 new jobs in the solar industry and 5,700 jobs in other renewable energy industries.
Solar and clean energy advocates hope this will strike a chord with Gov Hogan, who, during the 2014 election, ran with the goal of changing Maryland’s reputation for being unfriendly to job creators.
The Clean Energy Jobs Act would also send a message to the growing number of companies who have made a commitment to operating on 100% renewable energy through RE100, such as Walmart, Johnson & Johnson, and Nike.
The people for Maryland are hopeful, too. A survey conducted in January 2019 shows that 64% of Maryland voters think Gov Hogan should support the bill.
If you’re considering solar, higher SREC prices mean a quicker payback and additional on-going income, which means investing in solar will give you more money in your pocket! Find out if solar right for you.