Open for Business: Maryland’s Brighter Tomorrow Act Paves the Way for More Solar Energy Investment in Maryland

On May 10, 2024, Maryland Governor Wes Moore signed the Brighter Tomorrow Act (the “Act”) into law. The Act expands the types of solar facilities that qualify for subsidy, improves the level of subsidy, and through many ancillary provisions, increases access to subsidies, as well as benefits to workers and persons of low to moderate income. Below, we synthesize how the Act can generate additional revenue for a new solar generation project in Maryland.

What You Need to Know:

• Maryland is offering 150 percent SREC credit for generation of new solar power in Maryland.
• Maryland is offering additional tax rebates for new solar projects in Maryland.
• Interested projects going online after July 1, 2024, should consider certifying their projects with the PSC, and the PSC will issue guidance on this certification process in the coming weeks.

The Act Expands Subsidy Created by the Maryland Solar Renewable Energy Credit (“SREC”) Program

In Maryland, load serving entities supplying electricity to retail customers (including non-utility retail providers and utilities providing standard offer service) must purchase renewable energy credits to meet the State renewable portfolio standards (“RPS”), which is the threshold set by the legislature governing the mix of renewable versus traditional energy. In Maryland, solar facilities generating renewable energy also generate SRECs, which can then be sold to load serving entities for additional revenue to the renewable generating project. The Act provides that, for certain solar electric generation facilities, SRECs will be credited at 3 SRECS for every 2MWh of renewable energy (150 percent) generated instead of the traditional 1:1 ratio and be available for the 15-year duration of the enhanced subsidy. While the Act provides the above enhancements, it does not impair the existing net-metering and SREC program in Maryland. The program is capped at 300 MW for systems under 20KW and 270MW for systems between 20KW and 5MW.

Projects wishing to take advantage of this 150 percent SREC subsidy program must have their project and SRECs “certified” by the Maryland Public Service Commission after July 1, 2024, by demonstrating compliance with the following qualifications and criteria:

• Be located in Maryland; 
• Be eligible for inclusion in Maryland’s “RPS”; 
• Be placed in service between July 1, 2024 and January 1, 2028; 
• Be less than 5MW total capacity, and qualify if
  • 20KW or less of total capacity;
  • 20KW-2MW of total capacity if the system is used for aggregate net metering; or 
  • 20KW-5MW of total capacity if the system is located on a rooftop, a parking lot canopy or a brownfield site.

The Act Expands the Real Estate and Property Tax Abatement Subsidy

1. The Act makes nonresidential solar energy generating systems approved for a CPCN by the PSC or approved as a certified SREC (after July 1, 2024) that are constructed on the rooftops of buildings or on parking facility canopies not subject to Maryland State real estate valuation or corporate property taxes.
2. The Act extends the deadline for Community Solar Energy Generating Systems to obtain eligibility for property tax exemption to December 31, 2030, and expands the size of Community Solar projects that can qualify for property tax exemption (Community Solar provides a vehicle for electric customers that cannot install solar on their own premises to subscribe to purchase credits at a discounted rate from a solar facility developed in the same utility service territory that the customer can then apply against its electric bill).
3. The Act permits local governing bodies to further reduce assessment of any real property for purposes of property tax if the real property includes a parking facility with a solar energy generating system on its canopy.

Miscellaneous Provisions

In addition to the above subsidies, the Act contains several provisions to consider when developing a solar project in Maryland: 

• Prevailing Wage. All solar facilities with a generation capacity of greater than 1MW must pay workers in excess of Maryland’s Prevailing Wage threshold.
• Projects up to 5MW now may qualify for Net Meter Aggregation. Net meter aggregation means paying “behind the meter” for energy produced and consumed at non-contiguous properties owned or operated by the same person. This benefit is limited to farms, state and local governments and nonprofits.
• The Act Provides Grants for Solar Being Developed by or for Low- to Moderate-Income Households or in Low- or Moderate-Income Neighborhoods. The Act requires the PSC to create a program and develop low- to moderate-income criteria to facilitate low- to moderate-income persons to receive $750 per KW of nameplate capacity for solar, up to $7,500 per system. A third party may apply on behalf of the customer by presenting the contract with the customer and agreeing to undertake various consumer protection and reporting requirements.
• The Act mandates that local governments adopt automated solar permitting software with web-based platforms to reduce confusion and increase the tracking of residential permits for residential solar energy systems, residential energy storage systems, and panel upgrades.
• The Act expands the usable life of an SREC from three years to five years.
• The Act provides for rights to install barriers on the roof of a house to protect against animal damage to solar panels or the roof of the house.
• Although the Act expands projects eligible for certain subsidies to 5MW, projects greater than 2MW must consider whether they will also need a Certificate for Public Convenience and Necessity from the Maryland PSC, and we can assist with this nuanced analysis.