Solar Incentives in Maryland and How to Sell Your SRECs
Picture taken from a Solar PV Array MSSI installed in Sykesville, Maryland.
Wondering exactly what incentives are available to homeowner’s who purchase their solar PV arrays here in Maryland? We know there is a lot of misleading information out there and we want to help. The purpose of this article is to provide you with a little bit of our reliable and knowledgeable expertise on solar-panel installations here in Maryland and what kind of opportunities there are for paying down the system you invested $20,000 – $50,000 in faster.
Residential Renewable Energy Tax Credit
Most are aware of the federal 30% tax rebate. This rebate was scheduled to end in 2016, however it was recently extended! This means if you plan on going solar in the near future, and have your system fully installed and paid in full by December 31st, 2019 you will receive a 30% tax credit! After 2019 the credit is reduced to 26% until 2020, then 22% in 2021, and finally 10% thereafter.
In order to qualify for this federal tax credit you must have a tax burden/taxable income. If you are unable to apply the full credit amount for the tax year in which your array was installed, you’ll have the opportunity to roll the remaining value in to the next year, thanks Uncle Sam!
The State of Maryland also has an incentive for residential and commercial solar within the state. The Maryland Energy Administration will mail you a $1000 dollar check (unfortunately taxable) for installing solar on your home or property. In order to qualify for this grant you must own your own home or land, if the property is in any type of Trust ownership, it must be revocable and it must be your primary residence. Once your system has been fully installed and paid for, MSSI will submit the grant application, and you should receive your check within 4-6 months.
Most solar panel arrays here in Maryland are grid-tied systems are tied into the grid through your electric meter. Your utility installs a net meter that has the ability to track electricity moving through the meter from the grid to the house and reversely, electricity moving from the house to the grid.
Example of a PEPCO Net Meter. A net meter runs forwards and backwards, tracking net usage.
This has several benefits. The first is that you the opportunity to use the grid as storage space for extra energy you create during the day. When your system generates excess energy during the daylight your meter will “spin” backwards and in the evening it will spin forwards as energy is pulled from the grid. The net meter is able to tally the amount of net energy you have used vs.generated. At then end of the month excess energy your system has generated is credited towards your next month’s bill. In addition to saving money on your electric bills, net metering cuts out the need for expensive and inefficient battery storage systems to store your excess power.
The second benefit of Net Metering is the possibility of being paid for the excess PV solar energy that your system has contributed to the grid. While solar panels save money, only systems sized that generates over 100% of their usage will be paid for the energy that their systems generate. Generally, utilities in Maryland pay between 7 – 8 cents a kWh hour. Utilities will not pay for amounts of electricity that are worth less than $25.
Local County Incentives
Also within the state of Maryland 4 counties offer a local property tax incentive:
- Anne Arundel County and Harford County offer $2,500 towards your property taxes.
- Baltimore County and Prince George’s offer $5,000 towards your property taxes.
As with any local government, each of these localities has an annual budget reserved for this purpose. The wait time for the credit to be applied varies depending on the amount of applications which were submitted.
Another monetary incentive (besides saving money on your electric bill) are what are known as SRECs.
SREC stands for Solar Renewable Energy Credits. Not every state offers these, luckily Maryland does! SRECs are essentially a commodity, like a stock. The credits were implemented as a part of the state’s Renewable Portfolio Standard. This standard requires electricity suppliers to use renewable energy sources to generate a minimum portion of their retail sales. Electricity suppliers demonstrate compliance with the standard by accumulating renewable energy credits equivalent to the required percentages. If a company is unable to produce this green energy themselves, they have two options, either pay a penalty, or pay a lower price to purchase SREC’s from other sources.
When you own your solar system, MSSI works to certify your home as a solar utility, allowing the “green value” of the way you now produce energy to be translated in to these SREC’s.For every 1,000 kilowatt hours of “green” energy you produce, you will generate one credit, whether you use the energy or not. Credits can be sold on an open market based on the year they were generated and the going price.
Picture taken from a Solar PV Array MSSI installed in Fort Washington, Maryland.
So how do you ensure that you are taking full advantage of SREC sales opportunities?
To track these credits, you will be set up with an account on a website known as PJM-GATS. Depending on the size of your solar array you will have the option of accruing these credits based on an estimation, or on actual production
Each one of these credits has a shelf life for up to 3 years from the date they were created.
With MSSI you have the flexibility to control the sales of your own credits, you can sell them one credit at a time or save them up and sell them in bulk. In 2015 credits were selling between $150-$180 a piece! Just like the stock market these prices change as supply and demand fluctuate. If you do not currently see a price you like you are able to wait and see what the market is doing.
*How To Sell Your Credits
When it comes to selling these credits you have several options.
1. The first one we believe is the more passive way of selling. Just like Craig’s list, PJM-GATS has bulletin boards in which you can post SREC’s for sale. This lets potential buyers know you are trying to sell however many credits from whichever year they were generated. Once you have posted you sit back and wait for a buyer to contact you. The bulletin is not very active, so keep an eye as you may not get a response before the expiration of your credits.
Bulletin board on the PJM GATS website.
2. The next option, our preference, is to actively look for a buyer. There are several sites out there for you to create an account on, these sites are typically user friendly, with “sell now” pricing clearly displayed. The credits are typically sold to an aggregator or broker, who collects the small portions of accumulated residential credits, and then sells them in bulk to the larger organizations. Please refer to:
Once you have a buyer lined up, with an agreed upon price, the transaction occurs back in your PJM-Gats account. Some buyers will ask for your log-in information to complete the transaction on your behalf, others will provide detailed instructions on how to complete the transaction yourself.
3. Another option is to hire a company to manage and sell your credits on your behalf. With this option you typically agree on a percentage based fee, which the company will retain for their services. They will then control when to sell the credits, and send you payments as transactions are finalized.
Hopefully, this helped to clear up any confusion and gave you a clearer picture of what incentives are available to residents who choose to invest in solar for their homes here in Maryland. We use the Database of State Incentives for Renewables & Efficiency and recommend it as a source of reliable information.