Why should we demand that at least half of our energy needs are met renewable sources by 2030? One reason is the economics!
Solar United Neighbors is currently fighting for the Clean Energy Jobs (or 50% RPS) bill under consideration in Annapolis. The bill (SB 732) moves Maryland in the right direction on energy policy in several important ways. It increases the percentage of energy used in the state that must come from renewable sources (renewable portfolio standard or RPS) from 25% to 50%, including a six-time increase in the amount of in-state solar energy produced in Maryland. It funds clean energy job training programs that will make sure our state continues to benefit from the rapid job growth in the renewable energy sector. And it will increase equity and fairness in the solar market for all Marylanders by helping to expand community solar, extending the benefits of solar to community members currently unable to enjoy them.
Because the bill includes so many important measures that each deserve to be examined, we want to take the time to explore several of the bill’s features and how they will impact Marylanders. Over the next few months, we will publish a series of blog posts exploring those features, their benefits, and why you should support the Clean Energy Jobs bill.
In this post, we wanted to start with the bottom line: economics.
Here’s how the Clean Energy Jobs bill could put more money in the pocket of every current and future solar homeowner.
As mentioned above, this bill would move our state’s RPS to 50% by 2030, up from the current 25% by 2020 standard. This means that in twelve years, fully 50% of the electricity used in Maryland will have to be generated in our state by a renewable resource such as the sun or wind. Included in that 50% standard is a robust carveout that 14.5% of our energy used must be generated by in-state solar, up from the measly 2.5% current standard. This shift will help current and future solar homeowners by giving the state’s Solar Renewable Energy Credit (SREC) market a needed boost. SRECs are a market-based incentive tied to the solar production of every system in Maryland that can be purchased on the market by energy companies seeking to abide by the current RPS law.
If you’re a current solar homeowner in Maryland, you already know that the value of SRECs in the state are between $5 and $10, despite much stronger markets in surrounding states such as New Jew Jersey and D.C., where SRECs are valued between $200 and $400. As we’ve written in the past, SRECs tend to be a particularly volatile solar incentive as they are subject to market whims. Maryland’s SREC market is a particularly stark case-in-point.
So how would the new RPS law make things better for solar homeowners in Maryland? Let’s compare our state to our neighbors in D.C., which already has a 50% RPS law on the books. An average 8kw residential solar system makes about 10 SRECs each year. In Maryland, that comes out to a measly $50 in additional earning for a solar homeowner. But in D.C., those same 10 SRECs can be worth as much as $4,000 due to increased demand on the market. And remember, this is each year—not just a one-time benefit. That difference can make or break the budget of a Maryland homeowner interested in trying to go solar or maximize the investment she’s already made in her system.
Beyond boosting the SREC market, the bill will also support job training to support hiring in the vibrant solar industry—where demand for installers and other professionals offers one of the most promising avenues for continued economic growth. The strong solar industry and mandatory solar production increase will also help more community members benefit from solar by incentivizing the expansion of community solar in Maryland. As clean, locally produced solar continues to expand for all Marylanders, the more we’ll all benefit from lower electric bills, more jobs, and better community health. Stay tuned for the rest of this blog series as we explore how these benefits from expanding Maryland’s RPS will impact all Marylanders!