Maryland will increase renewable generation standard to 25 percent by 2020

Maryland’s General Assembly voted recently to increase the state’s renewables generation target in its renewable portfolio standard (RPS) to 25 percent of retail electricity by 2020 from 20 percent by 2022, overriding a veto by Maryland Gov. Larry Hogan.

The legislation, the Clean Energy Jobs Act of 2016, will also raise the solar “carve-out” to 2.5 percent by 2020. It will create incentives for approximately 1,300 megawatts of new clean energy and is expected to lower greenhouse gas emissions by more than 2.7 million metric tons per year. The legislation is also expected to create 1,000 clean energy jobs annually through 2020.

“The Senate voted for the Clean Energy Jobs Act because it is sound economic and environmental policy,” Sen. Brian Feldman (D-MD), lead sponsor of the Senate version of bill, said. “Not only will this legislation create thousands of good-paying green jobs, it will put the State on the road to meeting our renewable energy goals – a vision shared by both Democrats and Republicans across Maryland.”

Maryland’s RPS is divided into two tiers. Tier one includes electricity generated from solar, wind, biomass, geothermal, fuel cells, ocean, small hydro and some qualified waste technologies, as two technology specific targets (or set-asides). Hydroelectric generation can be used to meet tier two requirements, which are currently set at 2.5 percent of sales. Tier two is set to expire in 2018.

From 2008 to 2015, Maryland’s renewable generation requirements have increased from 2.7 million Renewable Energy Credits (RECs) to 8 million. Over that same period, the compliance cost for the RPS has grown from a total of $3.26 million to $127 million, according to data from the U.S. Energy Information Administration.

During 2015, the average cost for solar RECs in Maryland was $130 per REC, which was nearly 10 times the cost of tier other nonsolar RECs. As the number of solar facilities in the state begins to grow, solar REC costs are declining. Some nonsolar REC prices, however, are becoming more expensive jumping from less than $1 in 2008 to almost $14 in 2015.