What is Geothermal Energy?
WHAT IS GEOTHERMAL ENERGY?
Geothermal Heating and Cooling (GHC) systems transfer thermal energy stored below ground through circulating pipes to heat and cool air and water. While photovoltaic solar panels generate electricity, GHC systems merely transfer energy by circulating air/water beneath the ground, capturing or dissipating energy as needed. While these two systems operate differently, they are both considered to be sources of renewable energy.
STATES OFFERING INCENTIVES FOR GEOTHERMAL ENERGY
Currently, Maryland is the only state with a specific Geothermal carve-out in its Renewable Portfolio Standard (RPS). This was a result of Maryland HB1007 which designated a specific Tier I mandate for Geothermal Energy. By 2028, Maryland aims for Tier I Geothermal energy to account for 1% of total consumption- ¼ of which must be provided by low-to-middle income (LMI) residential sites.
This legislation created a market for buying and selling Geothermal Renewable Energy Credits (GRECs) as well as a Clean Energy Rebate opportunity for residential Geothermal sites. Maryland is a nationwide leader in encouraging the adoption of GHC systems and provides numerous opportunities for homeowners to make their Geothermal system installation a profitable investment.
Systems installed after January 1st 2023 are eligible to produce GRECs according to the RPS. Systems installed before this date produce Tier 1 credits, but are unable to redeem them as part of the Geothermal specific carve out. For information on the current spot price for GRECs, click here.
The Maryland 2025 Residential Clean Energy Rebate Program (R-CERP) provides residents with a rebate of $3,000 for an installed GHC system (application deadline is November 30th, 2024). The state is expected to release a successor rebate program in early 2025 as well.
HOW TO GET PAID FOR YOUR GRECs
GRECs are transferred to Flett Exchange via PJM GATS. Investors must register with the state of Maryland before gaining eligibility for producing credits. Flett Exchange handles 100% of the system registration and state application as a complementary service to the investor contingent upon choosing Flett Exchange GREC Manager to manage the generation and sale of RECs.
Customers who were registered already can use the Flett Exchange DIY service to sell their GRECs.
The state uses an estimation procedure based on the ClimateMaster Savings Report to determine the annual GREC number produced for each system. The results of the report are contingent on site specific information like insulation quality, square footage, and the energy usage profile of existing heating/cooling systems within the house.
Choosing Flett REC Manager allows you to provide us with your installer, basic information about your home/system, and we will take care of the leg work of submitting your application to the correct authorities. Below is a list of all GREC application components and an overview of expected GREC income for various profiles.
Maryland's RPS governs a cap on the price of GRECs. The ultimate price you receive per GREC is based on supply and demand. Energy companies compete for your GRECs on Flett Exchange which ensures that you receive the highest price for your GRECs. Based on the ACP Schedule as outlined by the state, prices will slowly decrease over time, but are expected to remain around $90.00 through 2025.