If at First You Don’t Succeed…
In May 2016, renewable energy advocates were surprised to see Governor Hogan veto the Clean Energy Jobs Act (SB 921/ HB 1106), which had passed the legislature with strong bipartisan support. The Clean Energy Jobs Act would have increased the states renewable portfolio standard and provided a modest increase to the solar carve-out.
However, after the Governor’s veto, hope was not lost. After passing with a veto proof majority, legislators were confident that an override would occur in early 2017. After months of waiting, the state legislature was successful in overriding Governor Hogan’s veto last week, and the Clean Energy Jobs Act will now become law. The Maryland Senate overrode the Governor’s veto in a 32-13 vote, and the veto override passed with a 88-15 vote in the House of Delegates.
What Does This Mean for Renewables?
With the Clean Energy Jobs Act approved as law, Maryland’s renewable portfolio standard will now be raised to 25% by 2020. This means that by 2020, 25% of the state’s electricity needs will be met from clean energy sources like solar and wind. This is a bump from the previous standard of 20% by 2022. The solar carve-out will also increase slightly from 2% by 2022 to 2.5% by 2020.
Such a modest increase in the solar carve-out may provide some initial relief to Maryland’s solar renewable energy credit (SREC) market, which plummeted in 2016 for a number of reasons, mainly higher than expected residential build, and to a lesser extent, the perception of the PJM interconnection queue. Before the passage of the override, Maryland SRECs were trading at $18, only slightly higher than Pennsylvania and Ohio, two markets that have experienced lackluster solar growth over the last several years. For reference, prices in Maryland were at $100/SREC only one year ago.
According to the Chesapeake Climate Action Network, the Act will incentivize 1.3GW of new clean energy in Maryland and could reduce greenhouse gas emissions by more than 2.7 million metric tons per year. And, while the override will not bring SREC values to early 2016 levels, this victory is an important first step in providing some relief to the market which is home to over 5,400 in-state solar jobs.
More importantly, it is yet another win for strong, local renewable portfolio standards. With this new act, Maryland joins other renewable policy success stories from 2016. Notably, we saw Ohio put an end to its RPS freeze, New York and Rhode Island aim for high renewable targets of 50% and 38.5% respectively, and Illinois sign into law a bill to make their RPS more effective. D.C., Oregon, and Michigan also increased their RPS standards in 2016. As other leadership states look to increase their renewable standards to 40% or even 50%, will Maryland lead or follow? Only time will tell.
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