New Law in Maryland will Add Approval and Financing Requirement for Solar PV Systems 2 MW and Up

16 May 2013


Governor O’Malley of Maryland signed Senate Bill 0887 into law on Thursday, May 16th 2013, effectively adding a new approval process and financing requirement for certain large PV solar systems. The Bill will require systems that are 2 MW or larger to file for approval to construct from the Public Service Commission (PSC), six months ahead of construction. This will apply to systems that are exempt from obtaining a Certificate of Public Convenience and Necessity (CPCN), the licensing requirement for the construction of a generating station in Maryland.

Solar PV systems that meet either of the following criteria do not have to file for a CPCN:

a)    Does not exceed 70 MW; Produces onsite electricity; At least 80% of total electricity produced is consumed on-site

b)    Does not exceed 25 MW; At least 20% of total electricity produced is consumed on-site

With the new law in place, systems that are 2 MW or larger, and do not meet either of these two criteria, must seek the newly required approval from the PSC. The system will have to file for approval six months prior to construction. A “deposit” of one percent of total installation costs is an application requirement, and will be held in escrow by the PSC. Once the project begins construction, the deposit will be refunded. Systems will have 18 months to begin construction following approval to construct.

If construction does not begin within 18 months, the deposit will be lost, and allocated to the Maryland Strategic Investment Fund. It seems that the system would then have to re-apply for PSC approval to construct, including submitting a new deposit, to be reconsidered. There may be exceptions to this rule, if an extension of the initial 18 months is granted by the PSC. The Bill states that “The Commission may grant the [extension] request based on factors the Commission considers compelling, including the occurrence of events outside the person’s control.” The Commission has not yet issued guidelines or comments on how or when it plans to implement the law, or whether the law will apply to existing projects that have not yet reached COD.

The new requirement will not add any additional overall cost to solar projects; however, it will shift a portion of the installation costs to an upfront payment in the form of the deposit. The below table shows the hypothetical deposit—one percent of installation costs—for a range of system sizes. Assumed installation costs are what Sol Systems is currently seeing in the Maryland solar market.

Project Size (MW)

Install Cost ($/kW)

Install Cost ($)

Deposit ($)



$4.5 million




$10 million




$17.5 million




$35 million


Sol Systems is continually monitoring the activity of the Maryland PSC and General Assembly for important updates relevant to solar financing and SREC markets. Please contact with questions about the Maryland solar market.

 About Sol Systems 

Sol Systems is a boutique financial services firm that offers investor clients direct access to the renewable energy asset class and provides developers with sophisticated project financing solutions. Founded in 2008, Sol Systems focuses on meeting the most critical needs of the industry, including SREC monetization, capital placement, tax equity, and New Market Tax Credits. To date, the company has arranged financing for thousands of projects and facilitated hundreds of millions in investment on behalf of Fortune 100 companies, private equity, family offices and individuals.

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Amber Rivera

Amber Rivera