Maryland GREC Market Overview

Maryland GREC Market Overview

Carbon Solutions Group (CSG) is focused on helping geothermal owners monetize Renewable Energy Credits (RECs). 

What is a GREC

GRECs are incentive credits that allow geothermal system owners to monetize the environmental benefits of their system's energy efficiency. Carbon Solutions Group (CSG) partners with local installers to create a seamless offering that gives your customers a direct line to collect their REC incentive without hassle.

Market Overview

Introduction of GRECs in Maryland RPS:

Introduction of Geothermal Heating and Cooling (GHC) in Maryland RPS: Maryland was the first state to include energy generated by Geothermal Heating and Cooling (GHC) technologies in its Renewable Portfolio Standard (RPS) as a Tier 1 renewable source. This inclusion was established through House Bill 1186 in 2012 with a carve-out being established in House Bill 1007 passed in 2021. GHC system owners are eligible to earn Renewable Energy Credits (RECs) equivalent to 1 MWh of electricity.

Market Forces:

The Maryland GREC market operates as an open market, with prices influenced by market forces such as supply and demand and the Alternative Compliance Penalty (ACP). The ACP serves as a soft benchmark for GREC values and is a fee paid by utilities for shortfalls in REC procurement. The ACP is set to decrease annually beginning in 2026.

ACP Rate and GREC Values: The ACP is set as a penalty for utilities that fail to meet their GREC procurement obligations and is currently a benchmark for market pricing. As of June 2023, the ACP is $100/REC and the market value of newly installed Maryland-generated GRECs was around $98.00 per GREC. The current prices are between $85-95 per REC. This value is significantly higher than Maryland-generated solar RECs, which averaged $59.00 per REC, reflecting the higher demand and scarcity of GRECs.

Eligibility for GRECs:

Systems installed on or after January 1, 2023, a person can receive GRECs based on the amount of thermal energy saved by a geothermal heating and cooling system if the person: 1) Owns and operates the systems; 2) Leases and operates the systems; or 3) Contracts with a third party who owns and operates the systems. 

Residential: To qualify for residential renewable energy credits (RECs) only, the geothermal heating and cooling system must be installed in a residential home that is not owned by a business. The system must meet ENERGY STAR standards (see Energy Efficiency Requirements for Geothermal Heat Pumps) and not feed electricity back into the grid. A single residential home qualified as low or moderate-income housing is also eligible for RECs under the new carve-out if the system was installed on the property on or after January 1, 2023.

Non-Residential: To qualify for non-residential RECs, the geothermal heating and cooling system must be installed in a non-residential facility. Non-residential facilities include commercial buildings and multi-family housing units. Supporting documentation must be provided to prove that the system is not for a single residential home. 

What Contract Options do we offer in Maryland?

Full Upfront - One Upfront Lump-Sum Payment

This option is one payment upfront. This is a pre-payment for the renewable energy credits generated over the system's useful life. We calculate this payment based on the system size (tons). The price is discounted from the current market price and payment is made within 30 days of all registrations being approved.

Market-Based - Current Market Rate Minus Commission

The timing and amounts of the payments will fluctuate with the market. We will sell your RECs (based on the actual production) at least once per year. Payments will be made within 45 days of the sale of the REC and a set 4% commission (10% for systems installed before 1/1/2023) will be deducted from your payment.

Example Payments

Registration Process

Overview of the Process and Timeline

The registration process begins once a system has been installed and the geothermal owner has signed a REC contract with CSG. From there CSG handles all aspects of registration of the system and payment to the customer.  After signing a contract with CSG, the registration process generally takes 6-8 weeks depending on the current regulatory administration processing time.

Required Information

• System Details

• Owner and Installer Affidavits

• Local building permit final approval and/or proof of paid invoice

• ClimateMaster Saving Calculator (Residential) /Installer’s Engineering Study (Non-residential)

• Schedule A (provided by CSG)

• *Corporate Entity Certificate of Good Standing

We appreciate the

opportunity to work with you.

Carbon Solutions Group

Contact Information

Phone: 1 (888) 316 GREC (4732)

Email: GREC@carbonsolutionsgroup.com