What does the Maryland multiplier mean for SRECs?

Maryland lawmakers have proposed that qualifying projects receive 1.5 Solar Renewable Energy Credits (SRECs) for each megawatt-hour (1,000 kWh) of electricity generated instead of one SREC in order to combat a drop in pricing from the state Alternative Compliance Payment (ACP). 

If your system produces 10 recs, you’ll still count 10 recs toward your contracted amount. However, each 1 REC will transact as 1.5 RECs when they get sold to the utility, which raises the price overall and makes each REC more valuable. 

In Depth

SREC prices are set by the electricity market, by buyers and sellers. The buyers are the electricity suppliers and the utilities (offering Standard Offer Service to individuals who have not selected an electricity supplier other than their utility). They are required to present to the Maryland Public Service Commission certification of the number of SRECs bought during the year, which is calculated by multiplying their annual electricity sales by the solar content requirement from the state’s Renewable Portfolio Standard (RPS, commonly called the solar carveout).

The electricity supplier, or Standard Offer Service provider, can buy the SRECs on the open market, or, if they are unable to buy the required number of SRECs, they can pay a penalty at a rate set by state law, called the Alternative Compliance Payment (ACP). 

Senate Bill 783 Passes April 2024

Senate Bill 783 passed the Maryland legislature in April 2024. The bill increased the volume of SRECs per MWh generated for qualifying projects while improving tax incentives. 

The bill included these provisions: 

1. Certain solar projects will receive a 1.5x multiplier for SRECs generated (the prior version of the bill provided for up to 2x). 

2. To qualify, projects must be placed in service between July 1st of this year and January 1, 2028, and installed either on a rooftop, carport, or brownfield.

3. The expiration period for SRECs increased from 3 years to 5 years.

4. The bill creates a valuation and property tax exemption for non-residential solar projects installed on rooftops, or on carports in parking lots.

Resources: 

https://www.argusmedia.com/en/news-and-insights/latest-market-news/2536464-maryland-lawmakers-mull-more-srecs-for-small-projects

https://www.mdlcv.org/wp-content/uploads/2024/03/Brighter-Tomorrow.pdf