Does Maryland Buy Back Solar Energy?

Net metering allows homeowners with solar panels to receive credit for any excess energy they generate that gets fed back into the grid. Maryland has had net metering policies in place since the early 2000s, allowing residents with solar installations to effectively “sell back” surplus electricity to their utility providers.

The specifics of Maryland’s net metering program have evolved in recent years. In 2017, the Maryland General Assembly increased the net metering cap from 1,500 megawatts to 1,800 megawatts across the state’s utilities. Utilities are required to provide net metering until the program cap is reached.

Most of the state’s major utility companies currently offer net metering buyback programs, with some limitations and stipulations depending on the specific provider. Generally, net metering credits homeowners at the full retail rate for energy fed back into the grid.

Current Net Metering Policy

Maryland’s current net metering policy allows utility customers with solar panels or other renewable energy systems up to 2 MW in capacity to receive retail rate credits for any excess electricity they generate and send back to the grid. This policy is in effect statewide.

Under net metering, customers only pay the utility for their “net” energy usage each month – that is, the amount of electricity consumed from the grid minus the amount fed back to the grid from their system. Their monthly bill is simply their regular retail electric rate multiplied by their net usage. Any excess credits roll over month-to-month indefinitely.

The main utility companies in Maryland like Pepco and BGE must offer net metering to eligible customers. There are no charges or fees related to interconnecting a net metered system.

Utility Company Requirements

In Maryland, the three main utility companies that offer net metering are Baltimore Gas and Electric (BGE), Potomac Electric Power Company (PEPCO), and Potomac Edison. All three utility companies are required by state law to offer net metering programs, but there are some differences in their specific requirements:

Pepco requires customers to fill out an interconnection application prior to installing solar panels. Systems up to 10 kW qualify for a simplified process, while larger systems have additional requirements. Pepco does not limit the number of net metered systems.

BGE also requires an interconnection application. Systems up to 10 kW can qualify for BGE’s 10 kW fast track process. BGE currently limits net metered systems to 1,500 MW of aggregate capacity.

Potomac Edison requires customers to submit a generator interconnection application, interconnection agreement, and certificate of completion. They currently do not limit the number of net metered systems.

Grid Supply Percentage

According to the U.S. Energy Information Administration, approximately 11% of Maryland’s net electricity generation came from renewable energy sources in 2022. The main renewable sources supplying Maryland’s grid are hydroelectric power, wind, solar, and biomass. In recent years, solar and wind generation have been increasing their contribution.

As of December 2022, renewable energy accounted for about 13% of Maryland’s total electricity generation, with nuclear at over 40%, natural gas around 40%, and coal providing the remainder. The state passed legislation in 2019 to source 50% of its electricity from renewable sources by 2030 as part of its Clean Energy Jobs Act.

Maryland’s renewable portfolio standard also requires utilities purchase specified amounts of energy from renewable sources. This policy aims to continue expanding renewable energy’s share of the state’s electricity mix through 2030 and beyond.

Cost Savings

Net metering provides significant cost savings for Maryland homeowners with solar panels. When solar panels generate more electricity than a home is using, the excess electricity is fed back into the grid. The homeowner then receives a credit from their utility company for this excess generation. These credits can be used to offset electricity usage at times when solar panels are not generating, such as nighttime.

According to the Maryland Office of People’s Counsel, the average cost savings from net metering for a homeowner in Maryland with a 5 kW solar array is around $1,000 per year. However, savings can vary based on system size, energy usage, utility rates, and other factors. Net metering allows solar homeowners to significantly reduce their electricity bills and recoup their solar investment faster.

System Size Considerations

The recommended solar system size for optimal savings in Maryland is usually between 6-8 kW for an average single family home, according to Maryland Energy Administration’s Guide to Solar. This system size will offset about 60-80% of a typical home’s electricity usage. Larger homes may need 10-12 kW systems to get to this offset level. The average Maryland home uses around 914 kWh per month, so a properly sized system will account for 550-730 kWh of that usage.

It’s important to right-size your system based on your actual electricity consumption patterns. Oversizing can lead to excess solar generation that does not get credited at the full retail electricity rate. Undersizing results in needing to pull more grid electricity than necessary. Work with reputable local solar installers to analyze your utility bills and size an optimal system.

Future Outlook

The future of net metering in Maryland remains somewhat uncertain. In 2015, the Maryland Public Service Commission instituted a pilot program to evaluate the costs and benefits of net metering as installed solar capacity grows (Maryland PSC Pilot Program). This pilot will help inform future policy decisions regarding net metering as the state approaches the 1,500 MW cap.

Some proposed changes under consideration include moving to a “buy-all, sell-all” model where customers would sell all solar generation back to the grid and buy all electricity needs at retail rates. Another option is moving to a “value of solar” tariff that compensates solar exports based on an analysis of their value. However, no changes have been formally adopted yet.

The Maryland Energy Administration projects continued strong growth in solar installations, estimating over 2,200 MW of solar will be online by 2030. However, the future of net metering remains a crucial policy question as a major driver of solar adoption for Maryland residents and businesses (Maryland Energy Outlook). Many industry experts expect net metering to continue evolving but remain available in some form to provide fair credit for excess solar generation.

Going Off-Grid

Going completely off the grid with solar power in Maryland is possible but involves careful planning and consideration. Here are some key factors to weigh if you’re interested in disconnecting from the grid entirely:

Battery Storage Capacity – To disconnect from the grid, you’ll need a large battery storage system to store excess solar energy for use when solar panels aren’t producing, like at night. Determine your household’s energy needs during non-production hours to size your battery storage accordingly.

Net Metering Policy – Maryland’s net metering policy allows grid-tied solar customers to receive credits and payments from utilities for excess energy fed back into the grid. Going off-grid means losing out on these potential savings.

System Costs – Installing solar panels, inverters, battery storage and the infrastructure for off-grid operation can be very expensive compared to grid-tied systems. Make sure to analyze the return on investment timeline.

Reliability – Being disconnected from the grid means you lose the backup reliability it provides if your solar system fails or has issues. Make sure you’re comfortable dealing with potential power outages.

Permits – There may be additional permitting requirements for off-grid solar installations. Research your local utility’s regulations if considering this option.

With proper planning, going off the grid with solar is achievable in Maryland. But carefully weigh the pros and cons compared to staying grid-tied before deciding.

Financial Incentives

Maryland offers a few key financial incentives that help make going solar more affordable for residents.

The federal solar Investment Tax Credit (ITC) allows homeowners to deduct 30% of the cost of installing a solar energy system from their federal taxes. This tax credit applies to both residential and commercial solar installations and remains in effect through 2032 before being reduced in future years (1).

Maryland has a state tax credit called the Solar Energy Grant Program that provides grants worth up to $5,000 for residents who install new solar panel systems. The grant amount depends on the system’s size. To qualify, the panels must be installed on your primary residence in Maryland (2).

Some local utility companies and municipalities also offer their own rebates and incentives. For example, Baltimore Gas and Electric provides a rebate of $0.25 per watt for solar panels installed on homes or small businesses (3).

Overall, the various federal, state, and local incentives in Maryland can cover up to 50-60% of the upfront costs of a new solar panel system. Talk to local solar installers to learn about incentives that apply to your specific situation.

(1) https://www.forbes.com/home-improvement/solar/maryland-solar-incentives/

(2) https://www.energysage.com/local-data/solar-rebates-incentives/md/

(3) https://www.sunrun.com/solar-by-state/md/maryland-solar-incentives

Conclusion

In conclusion, Maryland’s net metering policy provides benefits for solar customers by allowing excess solar energy to be exported back to the grid for credit. Utility companies are required to offer net metering up to a certain grid supply percentage, allowing solar customers to offset much of their energy usage. While system sizes are capped under net metering, cost savings can still be substantial. The future of net metering in Maryland remains positive, though some changes to state policy and utility company requirements may occur. Going completely off-grid is possible but not necessarily the best financial decision for most homeowners. Overall, net metering in Maryland provides an excellent opportunity for solar customers to reduce their utility bills and support renewable energy.