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The Maryland legislature passed legislation that will raise the fine (Solar Alternative Compliance Payment) for power companies if they do not procure enough MD SRECs from solar owners. The current legislation sets a fine of $80 per SREC for 2021 and lowers each year to $20.35 by 2030. The bill raises that fine $15 to $20 each year. As of publication we are awaiting the Governor to sign it into law. The proposed fines are shown below.
The same bill also decreases the amount of solar that the energy companies have to procure. Taking into account the amount of solar installed in Maryland and the growth rate this should not have an effect on solar owner’s prices of their SRECs. The only way it will is if an unexpected amount of solar is installed in the next few years.
This is welcome news for solar owners in Maryland along with homeowners and businesses planning on installing a new solar array. The current SREC price caps were inhibiting solar development. We expect the rate of solar installations to increase in Maryland if this bill is passed.
Click here to view the full Amendments.
|
Energy Year |
SACP |
Proposed SACP |
RPS % Solar |
Proposed RPS % Solar |
|
2019 |
$100 |
$100 |
5.5% |
5.5% |
|
2020 |
$100 |
$100 |
6.0% |
6.0% |
|
2021 |
$80 |
$80 |
7.5% |
7.5% |
|
2022 |
$60 |
$60 |
8.5% |
5.5% |
|
2023 |
$45 |
$60 |
9.5% |
6.0% |
|
2024 |
$40 |
$60 |
10.5% |
6.5% |
|
2025 |
$35 |
$55 |
11.5% |
7.0% |
|
2026 |
$30 |
$45 |
12.5% |
8.0% |
|
2027 |
$25 |
$35 |
13.5% |
9.5% |
|
2028 |
$25 |
$32.50 |
14.5% |
11.0% |
|
2029 |
$22.50 |
$25 |
14.5% |
12.5% |
|
2030 |
$20.35 |
$22.50 |
11.5% |
14.5% |
The following is the text for the Amendments to Maryland Senate bill 65 2021-2022 legislative session:
SB0065/773192/1
BY: Economic Matters Committee
AMENDMENTS TO SENATE BILL 65
(Third Reading File Bill)
AMENDMENT NO. 1
On page 1, in line 2, strike “Qualifying” and substitute “Tier 2 Renewable
Sources, Qualifying”; in the same line, after “Biomass” insert “, and Compliance Fees”; in line 3, after the first “of” insert “altering the renewable energy portfolio standard for certain years; extending the eligibility of certain Tier 2 renewable sources for purposes of the renewable energy portfolio standard in certain years; altering the compliance fee for a shortfall from the required percentage of energy from certain Tier 1 renewable sources for the renewable energy portfolio standard in certain years;”; in line 7, after “Act;” insert “providing for the effective dates of this Act; making a conforming change;”; in line 11, strike “and” and substitute a comma; in the same line, after “(s)” insert “, and (t)”; in line 16, strike “and” and substitute “, 7–703(b)(16) through
(25),”; and in the same line, after “7–704(a)” insert “, and 7–705(b)(2)”.
AMENDMENT NO. 2
On page 1, after line 20, insert:
“Article – Public Utilities
7–701.
(a) In this subtitle the following words have the meanings indicated.
(t) “Tier 2 renewable source” means hydroelectric power other than pump storage generation.
7–703.
(b) Except as provided in subsection (e) of this section, the renewable energy portfolio standard shall be as follows:
(16) in 2021[,]:
(I) 30.8% from Tier 1 renewable sources, including:
[(i)] 1. at least 7.5% derived from solar energy; and
[(ii)] 2. an amount set by the Commission under § 7–704.2(a) of this subtitle derived from offshore wind energy; AND
(II) 2.5% FROM TIER 2 RENEWABLE SOURCES;
(17) in 2022[, 33.1%]:
(I) 30.1% from Tier 1 renewable sources, including:
[(i)] 1. at least [8.5%] 5.5% derived from solar energy; and
[(ii)] 2. an amount set by the Commission under § 7–704.2(a)
of this subtitle derived from offshore wind energy; AND
(II) 2.5% FROM TIER 2 RENEWABLE SOURCES;
(18) in 2023[, 35.4%]:
(I) 31.9% from Tier 1 renewable sources, including:
[(i)] 1. at least [9.5%] 6% derived from solar energy; and
[(ii)] 2. an amount set by the Commission under § 7–704.2(a)
of this subtitle derived from offshore wind energy; AND
(II) 2.5% FROM TIER 2 RENEWABLE SOURCES;
(19) in 2024[, 37.7%]:
(I) 33.7% from Tier 1 renewable sources, including:
[(i)] 1. at least [10.5%] 6.5% derived from solar energy; and
[(ii)] 2. an amount set by the Commission under § 7–704.2(a)
of this subtitle derived from offshore wind energy; AND
(II) 2.5% FROM TIER 2 RENEWABLE SOURCES;
(20) in 2025[, 40%]:
(I) 35.5% from Tier 1 renewable sources, including:
[(i)] 1. at least [11.5%] 7% derived from solar energy; and
[(ii)] 2. an amount set by the Commission under § 7–704.2(a)
of this subtitle, not to exceed 10%, derived from offshore wind energy; AND
(II) 2.5% FROM TIER 2 RENEWABLE SOURCES;
(21) in 2026[, 42.5%]:
(I) 38% from Tier 1 renewable sources, including:
[(i)] 1. at least [12.5%] 8% derived from solar energy; and
[(ii)] 2. an amount set by the Commission under § 7–704.2(a)
of this subtitle derived from offshore wind energy, including at least 400 megawatts of Round 2 offshore wind projects; AND
(II) 2.5% FROM TIER 2 RENEWABLE SOURCES;
(22) in 2027[, 45.5%]:
(I) 41.5% from Tier 1 renewable sources, including:
[(i)] 1. at least [13.5%] 9.5% derived from solar energy; and
[(ii)] 2. an amount set by the Commission under § 7–704.2(a) of this subtitle derived from offshore wind energy, including at least 400 megawatts of Round 2 offshore wind projects; AND
(II) 2.5% FROM TIER 2 RENEWABLE SOURCES;
(23) in 2028[, 47.5%]:
(I) 43% from Tier 1 renewable sources, including:
[(i)] 1. at least [14.5%] 11% derived from solar energy; and
[(ii)] 2. an amount set by the Commission under § 7–704.2(a)
of this subtitle derived from offshore wind energy, including at least 800 megawatts of Round 2 offshore wind projects; AND
(II) 2.5% FROM TIER 2 RENEWABLE SOURCES;
(24) in 2029[, 49.5%]:
(I) 47.5% from Tier 1 renewable sources, including:
[(i)] 1. at least [14.5%] 12.5% derived from solar energy; and
[(ii)] 2. an amount set by the Commission under § 7–704.2(a) of this subtitle derived from offshore wind energy, including at least 800 megawatts of Round 2 offshore wind projects; and
(II) 2.5% FROM TIER 2 RENEWABLE SOURCES; AND
(25) in 2030 and later[,]:
(I) 50% from Tier 1 renewable sources, including:
[(i)] 1. at least 14.5% derived from solar energy; and
[(ii)] 2. an amount set by the Commission under § 7–704.2(a)
of this subtitle derived from offshore wind energy, including at least 1,200 megawatts of Round 2 offshore wind projects; AND
(II) 2.5% FROM TIER 2 RENEWABLE SOURCES
7–705.
(b) (2) If an electricity supplier fails to comply with the renewable energy portfolio standard for the applicable year, the electricity supplier shall pay into the Maryland Strategic Energy Investment Fund established under § 9–20B–05 of the State Government Article:
(i) except as provided in item (ii) of this paragraph, a compliance fee of:
1. the following amounts for each kilowatt–hour of shortfall from required Tier 1 renewable sources other than the shortfall from the required Tier 1 renewable sources that is to be derived from solar energy:
A. 4 cents through 2016;
B. 3.75 cents in 2017 and 2018;
C. 3 cents in 2019 through 2023;
D. 2.75 cents in 2024;
E. 2.5 cents in 2025;
F. 2.475 cents in 2026;
G. 2.45 cents in 2027;
H. 2.25 cents in 2028 and 2029; and
I. 2.235 cents in 2030 and later;
2. the following amounts for each kilowatt–hour of shortfall from required Tier 1 renewable sources that is to be derived from solar energy:
A. 45 cents in 2008;
B. 40 cents in 2009 through 2014;
C. 35 cents in 2015 and 2016;
D. 19.5 cents in 2017;
E. 17.5 cents in 2018;
F. 10 cents in 2019;
G. 10 cents in 2020;
H. 8 cents in 2021;
I. 6 cents in 2022;
J. [4.5] 6 cents in 2023;
K. [4] 6 cents in 2024;
L. [3.5] 5.5 cents in 2025;
M. [3] 4.5 cents in 2026;
N. [2.5] 3.5 cents in 2027 [and 2028];
O. [2.25] 3.25 cents in [2029] 2028; [and]
P. [2.235] 2.5 cents in [2030 and later] 2029; and
Q. 2.25 CENTS IN 2030 AND LATER; AND
3. 1.5 cents for each kilowatt–hour of shortfall from required Tier 2 renewable sources; or
(ii) for industrial process load:
1. for each kilowatt–hour of shortfall from required Tier
1 renewable sources, a compliance fee of:
A. 0.8 cents in 2006, 2007, and 2008;
B. 0.5 cents in 2009 and 2010;
C. 0.4 cents in 2011 and 2012;
D. 0.3 cents in 2013 and 2014;
E. 0.25 cents in 2015 and 2016; and
F. except as provided in paragraph (3) of this subsection,
0.2 cents in 2017 and later; and
2. nothing for any shortfall from required Tier 2 renewable sources.
SECTION 2. AND BE IT FURTHER ENACTED, That the Laws of Maryland read as follows:”.
On page 4, in line 15, strike “through 2020”; in line 18, strike “2.” and substitute “3.”; in line 20, strike “3.” and substitute “4.”; in the same line, after “That” insert “Section 2 of”; and after line 22, insert:
“SECTION 5. AND BE IT FURTHER ENACTED, That, except as provided in
Section 4 of this Act, this Act shall take effect June 1, 2020.”.
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.