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Good News and Bad News for Maryland Solar Hot Water Incentives

Which do you prefer to hear first? The good solar water heating incentive news in Maryland … or the bad solar water heating incentive news?

Frankly, the bad news is much less complicated, so let’s tackle that first.

The bad news: Maryland’s state rebate for residential solar water has been gutted reduced from $1,500 to $500, effective for applications received after 5 PM on June 2, 2011.


Click for larger image. Map from www.SRECtrade.com

The good news: Residential solar hot water systems installed after June 1, 2011, will qualify for SREC payments. Nice, eh? Err… Except, many readers may be  wondering what the heck an SREC is, and, more importantly, how much is it worth?

First things first: What is it?

  • An SREC (sometimes known as a “Green Tag”) stands for Solar Renewable Energy Certificate.
  • Similar to carbon credits, Maryland utilities are mandated to produce a certain amount of renewable energy every year.
  • If they can’t produce that clean power through their utility-owned wind and solar projects, then they have to pay for someone else’s clean power.
  • Thus, an SREC is a certificate that proves to the State that a solar system has generated 1 megawatt-hour (or 1000 kWh) of solar power. Of course, the utility needs a lot of these puppies, not just one or two.

And how much is an SREC worth?

Depends. Right now, there’s a market-based system, so the price can vary from month to month. These days, one SREC in Maryland is worth around $250, according to SRECtrad.com, a great SREC info resource.

Historically, Maryland only allowed the energy produced by solar PV systems to count as an SREC. But now, effective June 1, solar hot water systems also count… with some qualifications.

Eligibility requirements:

  1. Must be a Maryland residential solar hot water system that is NOT used for pool heating or Jacuzzis.  Only home water heating.
  2. System must be installed on or after June 1, 2011. (However, the program doesn’t start until January 1, 2012, so no cash generation until then.).
  3. The system must be certified OG-300 by the SRCC with collectors that are certified OG-100. (Check our online catalog for qualifying systems.)
  4. Since solar hot water production is generally measured in BTUs (British Thermal Units)
    1. The solar production must be measured by a meter that converts BTUs to kilowatt–hours, and
    2. The meter must meet the required standards of the International Organization of Legal Metrology. (Naturally, our SunReports meters meet all qualifications, the company confirms.)

So, ballpark, how much can a typical residential system earn in SRECS per year with a solar hot water system? Obviously, that’s going to vary by the type of panel, insolation, the yearly weather, location, etc.

However, a typical system with two collectors may produce around 4 SRECS a year, which means around $1,000 in a typical home owner’s pocket.

One more thing: Just in case you have a big house with a large system, the state limits your SREC payments to a maximum of 5 per year, so about $1,250 at current Maryland SREC rates.

So, although the upfront rebate has been substantially reduced, Maryland lawmakers have made up for it by making solar water heating eligible for SRECS. And don’t forget that residents will also qualify for the Federal Government’s 30% tax credit.

Spread the word, Maryland solar installers! SRECS (cash!) is coming to solar hot water.

This entry was posted in Solar Hot Water, Solar Rebates, Solar Tax Incentives, Solar Thermal Economics and tagged , , , , . Bookmark the permalink.

4 Responses to Good News and Bad News for Maryland Solar Hot Water Incentives

  1. Carter Lavin says:

    One benefit to this change is that the financing for solar hot water systems now comes from the SREC market (utilities) and not from rebates (state). So if MD were to face some serious fiscal problems, there would be no temptation to balance the budget by eliminating support for solar.

    This is why the solar market in NJ has been able to survive Chris Christie’s budget axe- most of the incentives go through the SREC market and not the state. Besides property and sales tax exemptions, NJ only pro solar budget expenditure is a million dollar rebate program for solar. Enough to help some projects get over the hump, but not enough to attract budget hawks.

    Good job for Maryland, Governor O’Malley, and MDV-SEIA for helping make this positive change

  2. Solar Fred says:

    Thanks for the extra info, Carter. Appreciate it.

  3. Pingback: Update on Recent State and Utility Solar Water Heating Incentives | Drop Your Energy Bill

  4. Peter Ross says:

    Thanks for the update on Good News and Bad News for Maryland Solar Hot Water Incentives | Free Hot Water Blog – Peter Ross