Renewable Energy in the States: Maryland Pt. II – Georgetown International Environmental Law Review


Renewable Energy in the States: Maryland, Pt. II

By Sam Eckland, Staff Contributor

The following memo provides an overview of the solar carve-out of the state of Maryland’s renewable portfolio standard (RPS) and its impact on recent solar growth on the state. Part I outlines the growth of RPS, and explains the credits and incentives which ensure compliance with the standard. Part II provides a history of solar capacity in Maryland, gives an overview of the market, and concludes with a recommendation for potential investment in solar projects sited in Maryland.

Growth of Solar Capacity in Maryland

From the 2007 RPS amendment to the close of 2013, Maryland’s solar capacity has grown from .1 MW to 173 MW of installed capacity.[1] Of that, over 40 percent comes from utility-scale solar installations, over 40 percent comes from commercial solar installations, and less than 20 percent comes from residential installations.[2] Despite the rapid growth of solar over the past half-decade, state capacity is still only at 14 percent of the projected 1200+ MW needed to satisfy the 2020 RPS requirement.

Accordingly, demand should remain high, particularly in light of aforementioned policy incentives, for expanded distributed PV solar generation, both commercial and residential. Looking further into the future, the reauthorizations of the Calvert Cliffs I and II nuclear facilities is set to expire in 2034 and 2036 respectively,[3] forcing the state to look for long term solutions to fill the current 40 percent energy supply that nuclear provides.[4] Given a 20-year expected life for PV systems, near-to-midterm solar installations may play a role of increasing importance in bridging this potential gap.

“Market stability, coupled with increasing demand driving the RPS, indicate solar investment in Maryland should provide stable SREC returns…”

With the growth of solar capacity has come a general stabilization in SREC prices. Prices of $400/MWh in late 2009, had by autumn of 2012 settled in roughly $130/MWh range where they remain today.[5] This price places Maryland as the median of regional SREC markets.[6] While SRECTrade predictions based on existing capacity show a roughly 16k oversupply of SRECs for the 2014 RPS requirement, when looking ahead existing capacity shows a 127k undersupply for 2015 and 285k undersupply for 2016.[7] Market stability over the past two years, coupled with the consistently increasing demand driving the RPS, indicate solar investment in Maryland should provide stable SREC returns in the near-to-mid-term.

Investment Recommendation

Maryland is a strong market for a distributed solar investment based on its favorable regulatory environment for solar energy, and stable but growing SREC demand. The solar carve-out in the state RPS will drive solar demand for new solar installations for at least much of the coming decade, and in-state buying requirements guarantee SREC offtake by Maryland energy suppliers until RPS requirements are met. Cash grants and net metering policies provide added upfront and long-term incentives for solar investment.Given that the Maryland legislature has several times amended these policies to strengthen them over the past decade, it is likely strong support will continue in the near term.

“Given that Maryland legislature has several times strengthened its policies over the past decade, it is likely strong support will continue in the near term.”

Additionally, the SREC market has provided consistent and predictable returns over the previous two years with expected near-term undersupply having the potential to increase returns. Although, based on traditional numbers, the Maryland SREC market may not provide the biggest returns in the region, an environment of relative regulatory certainty in Maryland makes it an attractive destination for solar development.


[1] StateStat, “Increase Maryland’s In-State Renewable Generation to 20% by 2022.”
[2] Maryland Public Service Commission, “Solar Energy Progress,”
[3] NRC, “Calvert Cliffs Nuclear Plant, Unit 1, Unit 2”;
[4] EIA, “Maryland Overview,”
[5] SRECTrade, “Maryland SREC Market Analysis.” (tool embedded in homepage).
[6] See SRECTrade, SREC Market Analysis, DC at $488/MW; MA at $271/MW; NJ at $150/MW; MD at $132/MW; DE at $55/MW; OH at $33/MW; PA at $20/MW.
[7] SRECTrade, “DC and MD SREC Market Update”