Maryland SRECs: What you need to know

If you're considering installing solar in Maryland, one incentive you should know is solar renewable energy certificates (SRECs). Maryland is one of the few states that offers this performance-based incentive to people generating solar electricity. Property owners in Maryland who buy and install a solar panel system can earn hundreds of dollars each year by selling the SRECs their system generates.

We describe how the Maryland SREC program works, explore current prices (and price projections) for MD SRECs, and discuss the future of the SREC program so that you can make a well-informed decision about going solar in the Old Line State.

Maryland's renewable portfolio standard (RPS) requires utilities to produce 25% of their electricity from renewable resources in 2020. The RPS also has a "solar carve-out," which mandates that 2.5% of that renewable electricity target must come exclusively from solar power.

SRECs are a mechanism used to track the amount of electricity that comes from solar. You generate one SREC for every megawatt-hour (MWh) of electricity your solar energy system produces. For example, the average MD homeowner buying a 9-kilowatt system typically generates about 10 MWh of solar electricity per year, equivalent to 10 SRECs.

Utilities purchase SRECs to comply with the solar component of the RPS. The owners of solar panel systems – from individual homeowners to large-scale solar developers – can sell their SRECs to utilities through the state's SREC market.

In Maryland, an SREC has a life of three years, meaning that SRECs you generated in 2021 can count towards 2021, 2022, or 2023 compliance periods. Only individuals who own (rather than lease) their solar energy system can sell SRECs into the MD SREC market.

The price of a single SREC isn't fixed in Maryland. It varies based on supply and demand within the market and can change daily. For reference, as of July 2021, Maryland SREC prices have remained at $77.50 since April 2021.

The future price of SRECs in Maryland depends on market conditions. Recently, the market has experienced an oversupply of SRECs, leading to much lower prices than witnessed in past years. However, some solar industry stakeholders expect the prices of SRECs to increase in MD, mainly depending on potential updates to the state's RPS.

An oversupply of SRECs caused relatively low SREC prices throughout 2018. However, in April 2019, Maryland legislators passed a bill requiring 50% renewable electricity generation by 2030. Outside of this general requirement, the bill includes the following:

• A 14.5% solar carve-out

• The addition of at least 1,200 MW of offshore wind

• A necessary assessment of the steps required to reach 100% clean energy by 2040 (once the 50% target is reached)

This bill, signed by Governor Larry Hogan in 2019, includes the most ambitious solar carve-out in an RPS.

The amount of money you'll receive from selling SRECs depends on the price you sell them for and how much electricity your solar panel system generates. The best way to estimate how much you can earn from SRECs is to evaluate multiple options. By joining the EnergySage Marketplace, you can compare quotes from local Maryland solar installers. These quotes will include an estimated SREC benefit based on the proposed solar panel system and the current SREC market values.