Maryland Develops Community Solar Incentive Program

by Womble Bond Dickinson
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For the 2018 fiscal year, the Maryland Energy Administration (MEA) is running its new Community Solar LMI PPA Incentive Grant Program in an effort to provide low and moderate-income (LMI) communities with the benefits of community solar projects. The program will function through a cost savings incentive initiative directed at solar subscriber organizations.

Only those subscriber organizations who have been assigned LMI capacity under the Maryland Community Solar Pilot Program launched in April 2017 or who subscribe 51% or more of their energy to LMI subscribers may participate. The April 2017 program was designed to help provide the LMI community with benefits similar to having solar modules on their own roofs and permit shorter contract periods (less than 20 years).

This new program focuses on subscriber organizations that can help with the goals targeted by the April 2017 program. The program has been allocated up to $3,500,000 to use for grants through the Strategic Energy Investment Fund, subject to availability. Subscriber organizations will receive grants based on incentive metrics.

A subscription incentive metric is measured by comparing the net present value of a potential subscription against the baseline rate. A term incentive metric is inversely related to the length of the term, such that shorter terms are incentivized more. The sum of the two incentive metrics helps determine the value of the grant a subscriber organization may receive. Incentives will only apply to the residential LMI-oriented portion of a given array. The MEA also requires that the term and rate structures survive the life of the applicable project.

A project must meet certain criteria to qualify:

  • Only one grant awarded per project.
  • The subscriber organization must provide sufficient guarantees that the terms of the LMI agreement will not change in a manner that is disadvantageous to the LMI subscriber over the 20-year period covered by the grant. The term limitations and subscription limitations must be included as mandatory requirements in contracts to sell the array or move operational control to another subscription organization.
  • The subscription agreement must be structured in a power purchase agreement model (little to no up-front cost to the subscriber: the subscriber pays the subscriber organization for energy credits credited to his/her electric bill on a $/kWh basis).
  • Projects must produce creditable power by June 1, 2019. (Creditable power is power provided to the electric utility which is used to compute the subscriber’s monthly energy bill). A count of LMI subscribers must be provided by the subscription organization to the MEA no later than June 1, 2019.
  • The subscription organization must provide a detailed explanation of how LMI subscribers were certified to their LMI category. If a third party provided the certification, the subscriber organization will provide a detailed explanation of how the third party conducted the verification.
  • Projects must be part of the Community Solar Pilot Program; subscriber organizations must have a subscriber number issued by the Maryland Public Service Commission.
  • The project must have been allotted capacity under the LMI category of the Maryland Community Solar Pilot Program, or be in another category and provide more than 51% of its energy credits to members certified as LMI.
  • The project must meet requirements of the Maryland Historic Trust.

The grant application deadline is May 15, 2018. Grant agreements must be executed by June 15, 2018. Construction and commissioning will be determined by the Public Service Commission and be no later than June 1, 2019.

[View source.]

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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