Last month, the Maryland Public Service Commission proposed draft guidance for regulating the state’s new community solar pilot program. While the regulations are not final, this is a strong affirmation of Maryland’s commitment to creating a more inclusive and equitable clean energy economy.
Most importantly, the draft regulations set aside 30% of the total project cap for solar installations that serve low and moderate income households, the working families of our community. This is a big deal.
Over the last five years, the solar market has grown twelve fold and now provides enough energy to power 5.4 million homes. 2016 is projected to be an even bigger year for solar, with an estimated 16 Gigawatts of new capacity coming online. The residential market is a primary driver of this solar explosion, with four straight years of over 50% annual growth. However, the benefits of solar are not reaching the working families among us.
While they make up 40% of the population, working families only account for 5% of all residential solar installations. This problem is even more acute in Maryland. According to the Center for American Progress, only 1% of residential solar has been installed in Maryland communities where median household incomes are below $40,000.
Unfortunately, current market and policy failures make the cost saving potential of residential solar inaccessible for many of these families. Low home ownership rates, challenging credit requirements, high upfront costs, and strict rooftop structural requirements present significant barriers for low and moderate income households looking to go solar. However, community solar presents a powerful opportunity to overcome these challenges and to bring the cost savings, jobs, and community benefits of renewable energy to the 49% of Americans who can’t take advantage of rooftop solar.
Following the lead of states like Colorado and California, the Maryland General Assembly ambitiously pushed out a community solar pilot program that will allow households to own or subscribe to a small share of a larger solar system that is sited in their community, but not on their property. The household then receives a credit on their monthly utility bill for the amount of electricity that their share of the system produced. This innovative model for deploying solar allows families to take advantage of the cost savings of solar without having to own their home, install equipment on their property, or to meet onerous credit requirements.
However, there are three forces conspiring to make community solar a product that, similar to traditional rooftop solar, primarily benefits the more affluent in Maryland.
- Maryland is only launching community solar as a pilot program with a cap on the number of available projects, leading to immense competition among developers and giving an advantage to large players serving easy to reach customers.
- The majority of projects are focused on serving the most financially stable communities to mitigate the risks of developing grid scale solar.
- As the market is not yet settled and the regulatory environment remains unclear, most developers are looking to execute relatively straightforward projects with an emphasis on serving the most reliable and profitable customers.
Therefore, the 30% set aside for projects that serve low and moderate income households is an essential step towards ensuring that the benefits of community solar are widely shared throughout Maryland. If adopted, the Public Service Commission’s draft guidance will be a major step forward for Maryland in their efforts to create a more equitable clean energy economy.
To read more about Groundswell’s efforts to bring community solar to working families in Maryland and beyond, please click here.
If you’re interested in reading the full text of the Maryland community solar law, click here.