On May 22nd, 2019, Maryland Governor Larry Hogan announced his decision to let the Maryland Clean Energy Jobs Act pass without his signature. The Act increases Maryland’s Renewable Portfolio Standard to an aggressive 50% by 2030. Additionally, the solar carve out target increased to 14.5% by 2028 and the Solar Alternative Compliance Penalty (SACP) was adjusted to $100.00 in 2019 and 2020, and decreasing each year thereafter. In response to these anticipated, and now enacted, legislative changes, the SREC market in Maryland has experienced a significant upward swing from $11.00 to $65.00 since the beginning of 2019.

Electricity load that was signed under contract prior to the bill’s effective date of October 1, 2019, is not subject to the new compliance obligations. Our calculations assume that approximately 80% of the 2019 electricity load is under prior contract and therefore exempt, with 25% of that exempt load rolling into the new compliance obligations each year moving forward.

Solar build rates have been trending downwards over the last six months in comparison to the last twelve months. Assuming no drastic decrease in build rate, we expect the market to be oversupplied in 2019, and undersupplied each year thereafter. The enclosed analysis further details the implications of the Maryland Clean Energy Jobs Act and the potential responses from the MD SREC market.

On Friday, May 22nd, Governor Larry Hogan announced that he would let the Maryland Clean Energy Jobs Act (SB-516) pass without his signature. The Governor’s decision to let the bill pass puts Maryland at the forefront of a growing list of states with aggressive renewable targets. This legislation requires 50% of Maryland’s energy to come from renewable sources and 14.5% from in-state solar, by 2030. In addition to the 2030 targets, the bill mandates that the state conduct research on strategies to reach 100% renewable energy sources by 2040, among other initiatives.

The Governor supplemented his decision to let the bill pass unsigned with a letter to Maryland Senate President, Thomas V. Miller, expressing his concerns with the bill and affirming his promise to continue pushing for a cleaner portfolio of energy resources in Maryland. SRECTrade will conduct further analysis on the impacts of this legislation and publish a comprehensive SREC market analysis in the coming weeks.

Last week, on Tuesday, March 19, 2019, the Maryland Senate passed the Clean Energy Jobs Act (CEJA) 33-13. Senate Bill 516 most notably increases the Maryland Renewable Portfolio Standard (RPS) to 50% renewable energy by 2030. The bill also substantially increases the state’s Solar REC program bumping the 2019 solar requirement to 5.5% and increasing until it reaches 14.5% in 2028 and onward.

For the legislation to progress, the Maryland House Economics Matters Committee would need to bring it forward and be voted on favorably on the floor of the House. The bill would then ultimately be sent onward to Governor Larry Hogan’s desk. Governor Hogan will then need to sign the bill or let it pass without his signature to put the bill into law. While uncertainty remains on Governor Hogan’s view on the legislation, some believe his recently shared perspective demonstrates positive support.

Since the Senate voted in favor of the bill, the House hasn’t taken action on the matter yet. On Monday, March 25, U.S. Senator Chris Van Hollen (D-Md.) put his support behind the bill. Senator Van Hollen sent a letter to House Economic Matters Chair Dereck Davis explaining why time is of the essence. Specifically Van Hollen noted that delaying the legislation until next year could result in the loss of nearly $250 million in federal investment tax credit (ITC) dollars. Additionally, further delay could continue to hurt the solar jobs market in the state. Maryland lost 800 solar industry jobs in 2018, ranking it 47th in solar growth in the U.S.

As of now, the bill awaits action in the House. Not much time remains in the current general session, which is scheduled to adjourn on Monday, April 8. SRECTrade will continue to monitor these proceedings closely and update our partners and clients with any new information.