If you’re considering installing solar in Maryland, one incentive you should be aware of is solar renewable energy certificates (SRECs). Maryland is one of the few states that offers this performance-based incentive to people generating solar electricity. Property owners in Maryland who buy and install a solar panel system can earn hundreds of dollars each year by selling the SRECs their system generates.
This article describes how the Maryland SREC program works, explores current prices (and price projections) for MD SRECs, and discusses the future of the SREC program so that you can make a well-informed decision about going solar in the Old Line State.
How Maryland’s SREC program works
Maryland has a renewable portfolio standard (RPS) that requires its utilities to produce 25 percent of their electricity from renewable resources in 2020. The RPS also has a “solar carve-out,” which mandates that 2.5 percent of that renewable electricity target must come exclusively from solar power.
SRECs are a mechanism used to track the amount of electricity that comes from solar. You generate one SREC for every megawatt-hour (MWh) of electricity your solar energy system produces. For example, the average MD homeowner buying a 9-kilowatt system typically generates about 10 MWh of solar electricity per year, equivalent to 10 SRECs.
Utilities purchase SRECs to comply with the solar component of the RPS. The owners of solar panel systems – from individual homeowners to large-scale solar developers – can sell their SRECs to utilities through the state’s SREC market.
In Maryland, an SREC has a useful life of three years, which means that SRECs you generate in 2020 can count towards 2020, 2021, or 2022 compliance periods. Importantly, only individuals who own (rather than lease) their solar energy system are eligible to sell SRECs into the MD SREC market.
MD SREC prices (current and projected)
The price of a single SREC isn’t fixed in Maryland. It varies based on supply and demand within the market and can change from day-to-day. For reference, Maryland SREC prices as of January 2020 are around $70.
The future price of SRECs in Maryland depends on market conditions. Recently, the market has experienced an oversupply of SRECs, leading to much lower prices than witnessed in past years. However, some solar industry stakeholders expect the prices of SRECs to increase in MD in the future, mostly depending on potential updates to the state’s RPS.
Status of the Maryland SREC program
An oversupply of SRECs caused relatively low SREC prices throughout 2018. However, in April 2019, Maryland legislators passed a bill that would require 50 percent renewable electricity generation by 2030. Outside of this general requirement, the bill includes:
- A 14.5 percent solar carve-out
- The addition of at least 1,200 MW of offshore wind
- A necessary assessment of the steps required to reach 100 percent clean energy by 2040 (once the 50 percent target is reached)
This bill, signed by Governor Larry Hogan in 2019, includes the most ambitious solar carve-out in an RPS to date. This increase in the solar carve-out should raise demand for SRECs, likely resulting in higher SREC prices.
How you can benefit from Maryland SRECs
The amount of money you’ll receive from selling SRECs depends on the price you sell them for and how much electricity your solar panel system generates. The best way to get an estimate of how much you can earn from SRECs is to evaluate multiple options. By joining the EnergySage Solar Marketplace, you can compare competing quotes from local Maryland solar installers. These quotes will include an estimated SREC benefit based on the proposed solar panel system and the current SREC market values.