Posted on
May 29, 2019
New Law
This past weekend Maryland Governor Larry Hogan did not veto the Clean Energy Jobs Act which is now law. It requires at least 50% of the electricity in Maryland be derived from Tier 1 renewable sources which are at least 14.5% in-state solar by year 2030. It provides an immediate stimulus for solar by increasing the demand in 2019 to 5.5% up from the old requirement of 1.95%
Big Win for Owners and Investors in MD Solar
This law is a boon for owners of existing solar in MD, new investors of solar and any of the associated businesses involved in the development of solar projects.
SRECs; Then and Now In MD
SREC’s are the primary funding sources for solar in MD. Flett Exchange has run a market for MD SRECs since July of 2009. At that time the goal was to obtain 2% solar by year 2022 and SREC prices on Flett Exchange were $370 for MD SRECS. During the last 10 years the price to install solar decreased significantly and the 2% goal in MD was achieved quicker than expected. The state legislature and governor in MD were unsuccessful in putting new solar growth targets into law for a few years. This resulted in a slow-down of new solar development and the prices for SRECs decreased in response. Prices for MD SRECs dropped below $30 in 2016 and traded under $10 until recently. Due to the anticipated and eventual passage of this Clean Energy Jobs Act SREC prices have moved up above $60 as of today. We provide historical pricing on our website for your reference based on our Flett Exchange Daily Settlement price. Current owners of Solar in MD are taking advantage right now and selling their SRECs as the prices rise on the Flett Exchange MD SREC spot market via immediate delivery and payment.
What’s Next for Solar in MD?
The major take-away of this new law is that it creates a strong, long-term goal for demand for SRECs which is what solar investors look for. As opposed to other states, it takes a well-balanced approach by protecting ratepayers by way of a lower compliance payment which starts at $100 and gradually decreases to $20.23 by year 2030. This is important in that solar investors want to be confident that the mandates are less likely not to be rolled back due to rate increases. The following is a table comparing the previous solar mandates to the new ones implemented via the Clean Energy Jobs Act:
|
Old Cost Cap |
New Cost Cap |
Year |
Old % Solar |
New % Solar |
|
$150 |
$100 |
2019 |
1.95% |
5.5% |
|
$125 |
$100 |
2020 |
2.5% |
6.0% |
|
$100 |
$80 |
2021 |
2.5% |
7.5% |
|
$75 |
$60 |
2022 |
2.5% |
8.5% |
|
$60 |
$45 |
2023 |
2.5% |
9.5% |
|
$50 |
$40 |
2024 |
2.5% |
10.5% |
|
$50 |
$35 |
2025 |
2.5% |
11.5% |
|
$50 |
$30 |
2026 |
2.5% |
12.5% |
|
$50 |
$25 |
2027 |
2.5% |
13.5% |
|
$50 |
$25 |
2028 |
2.5% |
14.5% |
|
$50 |
$22.50 |
2029 |
2.5% |
14.5% |
|
$50 |
$20.235 |
2030 |
2.5% |
14.5% |
How do you Sell SRECs if you own Solar in MD?
Flett Exchange is celebrating a decade of servicing Maryland solar owners this summer! We look forward to the next ten years and assisting our current and all future Maryland Solar investors. We offer a do-it-yourself SREC service for those who don’t mind handling the GATS meter readings and transfers. If you sign up you gain access to our exchange 24x7 for immediate transfer and payment. For those who want a hassle-free full-service brokerage we offer Flett REC Manager. We will handle all of your meter readings, SREC minting in GATS and process your sales and payments immediately upon SREC creation. We are efficient at what we do so we have low fees to match. Our goal is to help you maximize your revenues on your solar investment! Sign up for either service on our website.
DISCLAIMER: Maryland SREC prices are volatile. Buyers and sellers of SRECs must do their own research. The above projections are subject to change as market dynamics change.