On May 30th, Senate Bill No. 65 (SB 65) went into law, which revised Maryland’s renewable energy portfolio standard (RPS). The bill increased the solar alternative compliance payment (SACP) which utilities must pay when they do not meet RPS requirements but decreased the percentage of energy that utilities must procure from Tier I renewable resources and from solar resources under the solar carve-out.
By increasing the SACP, the law effectively increased the “price ceiling” for solar renewable energy credits (SRECs), and therefore the likely price at which SRECs will sell. Currently, the SACP is $80 per SREC for 2021 and $60 per SREC for 2022. Before SB 65, the SACP was set to drop to $45 per SREC in 2023, then $40 in 2024 and $35 in 2025. SB 65 increased these price ceilings to $60 per SREC in 2023 and 2024, and $55 in 2025.
While the Tier I and solar carve-out requirement decreases may seem negative, the amended requirements paired with the SACP increase may positively impact Maryland SREC prices and Maryland solar build. The new requirements should help Maryland solar supply and demand move closer together. To date, Maryland’s actual solar supply has lagged behind the demand for solar. By decreasing utility demand and increasing supply incentives (SREC prices), solar project origination and generation should increase accordingly.
We are already seeing Maryland SREC pricing rise and expect solar project origination to increase as well. These developments are exciting and beneficial to homeowners, installers, and developers throughout Maryland.
To compare all the RPS and SACP changes in Maryland, please refer to the table below.
| Year | Old Solar Carve-Out | New Solar Carve-Out | Old Tier I Requirement | New Tier I Requirement | Old SACP | New SACP | Tier I ACP (Unchanged) |
|---|---|---|---|---|---|---|---|
| 2021 | 7.5% | n/a | 30.8% | n/a | $80.00 | n/a | $30.00 |
| 2022 | 8.5% | 5.5% | 33.1% | 30.1% | $60.00 | $60.00 | $30.00 |
| 2023 | 9.5% | 6.0% | 35.4% | 31.9% | $45.00 | $60.00 | $30.00 |
| 2024 | 10.5% | 6.5% | 37.7% | 33.7% | $40.00 | $60.00 | $27.50 |
| 2025 | 11.5% | 7.0% | 40.0% | 35.5% | $35.00 | $55.00 | $25.00 |
| 2026 | 12.5% | 8.0% | 42.5% | 38.0% | $30.00 | $45.00 | $24.75 |
| 2027 | 13.5% | 9.5% | 45.5% | 41.5% | $25.00 | $35.00 | $24.50 |
| 2028 | 14.5% | 11.0% | 47.5% | 43.0% | $22.50 | $32.50 | $22.50 |
| 2029 | 14.5% | 12.5% | 49.5% | 47.5% | $22.50 | $25.00 | $22.50 |
| 2030+ | 14.5% | 14.5% | 50% | 50.0% | $22.50 | $22.25 | $22.35 |