On April 8, 2019, the Maryland General Assembly passed Senate Bill 516 (SB 516), which has been entitled the Clean Energy Jobs Act. This legislation now moves on to Governor Hogan’s desk for review. The Governor may support the bill, but also has the option to allow it to go into effect on October 1, 2019 without his signature or to veto the legislation. This Bill has the support of both the Senate and the House. If the Governor vetoes the Bill, the Bill will likely reappear in the next legislative session and the veto will be overridden.
Once in effect, it will increase the Renewable Portfolio Standard (RPS) in Maryland from 25% in 2030 to 50% in 2030. A key component of this Bill is the increase in the Tier I solar carve out beginning in 2019 but a decrease in the Alternative Compliance Penalty (ACP). The changes in the solar carve out from SB 516, as well as the change in the ACP, are detailed below:
|
Year |
Current Solar Carve Out |
SB 516 Solar Carve Out |
Current Solar ACP
(per SREC)
|
SB 516 Solar ACP
(per SREC)
|
|
2019 |
1.95% |
5.5% |
$150.00 |
$100.00 |
|
2020 |
2.5% |
6.0% |
$125.00 |
$100.00 |
|
2021 |
2.5% |
7.5% |
$100.00 |
$80.00 |
|
2022 |
2.5% |
8.5% |
$75.00 |
$60.00 |
|
2023 |
2.5% |
9.5% |
$60.00 |
$45.00 |
|
2024 |
2.5% |
10.5% |
$50.00 |
$40.00 |
|
2025 |
2.5% |
11.5% |
$50.00 |
$35.00 |
|
2026 |
2.5% |
12.5% |
$50.00 |
$30.00 |
|
2027 |
2.5% |
13.5% |
$50.00 |
$25.00 |
|
2028 |
2.5% |
14.5% |
$50.00 |
$25.00 |
|
2029 |
2.5% |
14.5% |
$50.00 |
$22.50 |
|
2030 |
2.5% |
14.5% |
$50.00 |
$22.35 |
The solar renewable energy credit (SREC) market was trading around $22-$25 for each SREC before the announcement of this legislation. After the announcement of SB 516’s passing by the General Assembly, the SREC market has been trading around $50-$70/SREC. The SREC market is not particularly liquid, and SB 516 could have a significant impact on clearing prices and price volatility. The ACP, which is the theoretical “ceiling” on the SREC cost in 2019, will be $100/SREC upon this Bill going into effect. The bottom-line is that SB 516 will impact Maryland customers’ retail electricity costs for procurement and budgeting.
A link to SB 516 is provided here for reference: http://mgaleg.maryland.gov/2019RS/bills/sb/sb0516e.pdf
