In May 2023, Maryland passed HB 908 into law creating a permanent community solar program with significant improvements learned from the 7-year pilot.
The permanent program has no cap on capacity and mandates that at least 40% of each project’s capacity be reserved for LMI subscribers – a departure from the pilot program which was a separate category of the program’s capacity with a lower threshold of 30%. To the happiness of community solar advocates, Maryland has gone further than some states in crafting a program that aims to make LMI subscriber acquisition and billing easier. Namely, by allowing LMI subscribers to self-attest to their income status and the mandating of utility consolidated billing (UCB).
A low-income subscriber has been defined in HB 908 as having an annual household income that so at or below 200% of the federal poverty level and a moderate-income subscriber as gross annual household income is at or below 80% of state median income level. LMI subscribers may also be identified by the Environmental Justice Screening Tool as being in a census tract that is an overburdened or underserved community.
Additionally, the program addresses some of the siting restriction issues solar projects have been facing by expanding tax exemptions as well as incentivizing project development on rooftops, brownfields, or co-location with farmland.
The new program will be effective on January 1, 2025, with regulations to be formulated by the PSC by July 1 of that same year. Electric utilities must have consolidated billing operational by January 1, 2026. In the creation of permanent program rules, the PSC is directed to develop the structure in such a way that master-metered affordable housing projects can participate in and benefit from community solar.
Maryland began developing a plan to bring renewable energy into its mix back in 2002 with its first renewable portfolio standard, to minimize fossil fuel pollution in the state. After many revisions, the state now calls for 50% renewable energy by 2030 with a requirement of at least 14.5% coming from solar. The state first passed legislation to create a community solar pilot program in 2015, then a three-year pilot program which began operation in 2017. The program’s capacity was set at 1.5% of the state’s 2015 peak demand, or just shy of 200 megawatts (MW). In 2019, the program was extended another four years through 2024 and expanded to just over 400 MW, and again in 2021 to nearly 600 MW, still calculated as a percentage of peak demand.
By the end of 2022, 88MW of community solar, or approximately 15% of the program’s capacity, have come online. In Maryland, projects are called “community solar energy generation systems” (CSEGS). Though there is a backlog of accepted projects awaiting completion, the program is adding capacity slowly but surely. The primary issue in bringing projects online has been siting issues in Maryland’s relatively limited geography and local permitting and siting issues. This has in part prompted legislative action in 2022 to ease siting requirements and expand the maximum capacity of projects from 2 to 5 MWs, as well as prompting a local tax exemption for serving low- to moderate-income (LMI) electricity customers with agrivoltaics or projects built on other desirable locations like rooftops, brownfields, or landfills.
Though Maryland’s pace of community solar adoption has been relatively slow, the state has been effective at generating interest in the program and troubleshooting through legislation to ensure its continued success. The state has also positioned itself well to benefit from the federal government’s expanded Investment Tax Credit (ITC) for projects serving LMI customers with its existing carveouts for that customer class. Though the pilot program will end in December 2024, it has been extended twice before and will transition to a permanent successor program.
With nearly 600 MW, community solar capacity is split into three categories:
A small but significant amount of the overall program capacity is dedicated to serving LMI customers. In the LMI category, only 10% of a project’s capacity must be allocated to low-income subscribers, with another 20% open to either low-income or moderate-income subscribers. The remaining 70% of the available energy can be subscribed to by anyone.
However, the state has passed a bill in 2022 with an incentive to increase LMI subscriber participation in the program through HB 1039. This law exempts community solar projects from both county and municipal corporate property taxes if 50% of a project’s generation serves LMI households at a rate which is at least 20% lower than the base electricity rate and are located on a rooftop, landfill, or brownfield site.
Low Income: Subscriber’s gross annual household income is at or below 175% of federal poverty level for the year of subscription or is eligible for any federal, state or local assistance program that limits participation to households with the required income level.
Moderate Income: Subscriber’s gross annual household income is at or below 80% of the median state income for the year of subscription.
Subscriber organizations are responsible for verifying the eligibility of all LMI subscribers before receiving PTO. The Commission is also empowered to establish other ways to verify the status of LMI subscribers. LMI participants can be verified through the following avenues:
To participate in the community solar program, a subscriber organization – which is the term Maryland uses to refer to the owner of a project as well as actual subscriber organizations – must submit an application with the Maryland Public Service Commission (PSC) and receive a Subscriber Organization identification number.
Projects will then apply to the utility to be a part of the pilot program, with an interconnection agreement and community solar pilot application. Each participating investor-owned utility has an application process. Projects are selected from the list of subscriber organizations and are placed on a waitlist if the allocations for the year have already been awarded.
Find each utility’s application processes here:
|Residential Rate||See rate||See rate||See rate||See rate|
|C&I Rate||See rate||See rate||See commercial customer rates||See nonresidential rate table PDF|
*Table accurate as of October 2022
Maryland, one of the most densely populated states in the country, has an interest in balancing space-intensive solar development with the maintenance of farm and forest land. A local permitting exemption for utility scale solar has frustrated county and municipal stakeholders, manifesting in restrictive siting requirements for other types of solar development.
While this has impacted the speed at which CSEGS have come online, the legislature has successfully passed legislation in 2022 that allows for project development on contiguous lots and provided greater incentives for agrivoltaics, brownfield, cleanfill, landfill, and parking areas or structures. Pairing a project with battery storage capacity should also be implemented to maximize the benefit to the grid.
With the passage of the Inflation Reduction Act by Congress, Maryland’s community solar laws as written provide a solid foothold for projects to benefit from the ITC and PTC. With LMI carveouts in place, albeit smaller than the federal minimum of 50% LMI subscribers, Maryland project owners will realize significant reductions to their tax burdens, potentially up to 70%.
Baltimore Gas & Electric
Delmarva Power & Light Green Power Connection
Potomac Electric Power Company (Pepco) Green Power Connection
Potomac Edison Company