Maryland Legislature passes first of its kind storage tax credit

Maryland may soon boast the country’s first energy storage tax credit. The bill (SB0758 and HB0490) passed at the close of the 2017 Maryland Legislative session by wide margins. The bill is now awaiting signature by the governor. This new tax credit could help to make Maryland a leader in distributed storage across the country.

What’s in the law?

The law offers a state income tax credit for commercial and residential storage projects on a first come, first serve basis. The Maryland Energy Administration will issue tax credit certificates with a maximum program-wide allocation of $750,000 per year for projects installed starting after January 1, 2018 and before December 31, 2022. The maximum allocation of credit per project is 30% for the total installed cost for the energy storage system with a cap of $5,000 for residential systems and $75,000 for commercial systems.

Eligible energy storage systems are defined in the law as any “system used to storage electrical energy, or mechanical, chemical, or thermal energy that was once electrical energy, for use as electrical energy at a later date or in a process that offsets electricity use at peak times”. This means that the credit will support a wide variety of technologies, from traditional sealed lead-acid battery systems that have been around for decades to new lithium-ion batteries like the Tesla Powerwall and other offerings. It also supports non-electrical storage methods like compressed air storage and pumped water storage.

What can you do with storage anyway?

Storage provides electricity when the electric grid goes down through technologies like battery backup systems. These devices also offer what are called “ancillary services” to the electric grid. These services are currently offered at larger scales by third party providers who are compensated to provide help to the utility company at key moments to maintain the grid within the required ranges for system voltage and frequency.

Our electric grid is transforming. More distributed, renewable, and resilient energy resources are coming online. Utility grid operators, energy producers, and energy service providers will all need to coordinate to ensure that the grid continues to provide reliable electricity service. This means the value of distributed storage will continue to grow.

What does this have to do with solar?

Solar and storage is an ideal combination. Solar charges the storage at a fixed cost and keeps it ready for action when the grid is operating. If the grid goes down, energy storage takes over to provide energy. This could be for a home, a business, or a critical location in the community like a hospital, shelter, or community center. Larger storage installations can also provide other services to the grid and be paid for doing so. In the future, when smaller providers like homeowners are allowed to participate, they could too.

Installing a system for future storage connection

Pairing solar installations with battery storage is an attractive idea for many people who are thinking about going solar. Battery storage provides piece of mind that even if you are unable to get electricity from the grid (e.g. during a storm) you will still have power.

Despite this benefit, battery storage remains an expensive proposition for many. At the same time, the market for batteries is growing rapidly. This rapid growth is coupled with quickly declining prices. So, even if battery storage may not pencil out for solar customers today, it is possible it will in the near future. Fortunately, solar systems can be built with the addition of a future storage system in mind.

When building a system for future storage, it is important to make sure your grid-tied inverter’s power rating doesn’t exceed that of a future battery. Battery sizes range from 4,000-7,000 watts. So, let’s say you have a 9,000 watt system, you would want to purchase two smaller inverters, say 6,000 and 3,000 watt ones rather than one 9,000 watt inverter. This will allow you to rewire the electricity from the smaller inverter into your future battery system.

This can be accomplished through AC coupling. AC coupling refers to the interface between the solar array and the inverter. This takes place physically in your home’s circuit panel. The battery installer will add an additional breaker panel that covers the outlets that can be powered with the electricity stored in your battery system. These outlets will be the ones connected to critical loads such as a refrigerator.

There is an added cost to having two smaller inverters, rather than one larger inverter. The cost will vary, but expect to pay between $500 and $1,000 for the two smaller ones.

It is also possible to connect systems that use micro inverters to batteries. The key is to arrange the strings in a way that a portion of your system is set up to send electricity to a future battery system.

If you are thinking about adding battery back up, let your installer know before they install the system. This ensures they will design your system to be storage compatible and to minimize the additional work that would have to be done to install batteries when you do decide to add storage.

Baltimore residents form co-op to go solar together, get a discount

Neighbors across Baltimore have formed a solar co-op to save money and make going solar easier, while building a network of solar supporters. The group is seeking members and will host an information meeting on April 25, 7 p.m. at 2640 Space (2640 St. Paul Street, Baltimore, MD 21218) to educate the community about solar and the co-op process.

Baltimore residents interested in joining the co-op can sign up at the co-op web page. Joining the co-op is not a commitment to purchase panels. Once the group is large enough, MD SUN will help the co-op solicit competitive bids from area solar installers.

Co-op members will select a single company to complete all of the installations. They will then have the option to purchase panels individually based on the installer’s group rate. By going solar as a group and choosing a single installer, each participant generally saves up to 20% off the cost of their system.

Community solar program opens

Maryland’s community solar pilot program officially opened for business on April 10. This comes almost two years after the legislation passed in Annapolis and after extended work by Public Service Commission (PSC) staff and other stakeholders, including MD SUN. While the program is technically open, many steps and several months of work lay ahead before offerings will become available to the general public. We expect energy subscriptions to start to be available for potential customers by late summer or early fall.

What happens next?

Now that the program is open, there are several steps project developers must go through to build shared arrays before they can offer energy subscriptions to potential customers. Out of fairness and due to high interest in the program, the PSC has arranged for the initial application process to be done in a batch and with specific timing for each stage.

Apply for a Subscriber ID – April 10 through May 5

The PSC will accept applications from organizations that want to participate in the program. These “Subscriber Organizations” may be for-profit developers, non-profits, municipalities, individuals, or groups of individuals. Each applicant will need to fill out a Subscriber Organization form and provide information about who they are and their plans. After the initial May 5 deadline for this first batch, new Subscriber Organizations can still apply to participate in the program. They will be accepted on a rolling basis throughout the year.

Receive a Subscriber ID – End of May

The PSC will issue subscriber IDs to applicants in the initial batch. The Subscriber Organization ID will be used by the applying Subscriber Organizations to identify themselves to the utility company and to keep their information up to date with the PSC.

Apply for Interconnection – Early June

Each participating utility (Pepco, Potomac Edison, BGE, Delmarva) will begin accepting Interconnection Applications for projects that Subscriber Organizations wish to connect to the utility grid as part of this program. Each Subscriber Organization will need to provide their previously issued Subscriber ID.

Each utility will then review these technical applications to determine if the requested solar facility can connect at the location requested and whether any additional costs are required to make the connection. The results of these applications will get returned to the Subscriber Organizations over a period of a few days to up to several months. Turnaround time will depend on a variety of factors including the size of the system and where it will be located on the electric grid. Larger sized projects will typically take longer to review.

Apply to join the program – Mid June

Once the Subscriber Organization has a “conditional approval” from the utility company that it’s allowed to build an array in the location requested, the Subscriber Organization can request space for that particular project in the program in one of three categories (“Open”, “Low-to-moderate-income”, or “Small & Special”). Each category is meant to encourage a variety of types of projects and has limited space allocated to it for each year of the program.

When they apply to the utility for space they must provide two other things: 1) proof they control the location where the array is going (example: a property lease) and 2) proof that they have applied for initial permits in the jurisdiction where the project is to be located (example: zoning permits).

Access to the program – Late June through December

Once the utility has received an application from a Subscriber Organization for a particular project to get space in the program they will review the application to make sure all the requirements described above are met. If space is available in the category requested the project will be permitted into the program.

When can I subscribe to community solar energy?

After projects are given space in the program the Subscriber Organizations will begin building (often with partner developers) the solar project and soliciting “Subscribers” (customers) to participate in the project. The remaining work, which includes construction, final interconnection to the grid, and commissioning, will typically take between 6 and 12 months but could be shorter for some projects depending on size, location, and other factors.

While the project is being built, Subscriber Organizations will be able to offer subscribers contracts to purchase energy (kilowatt-hours or kWh). Potential subscribers will be able to review the terms and conditions of a particular offer and decide whether they want to sign up or look for options from other Subscriber Organizations. Offer details like the cost per kilowatt-hour, the length of the contract, fees, cancellation options, etc. will vary by Subscriber Organization.

The rest of the pilot program

In years two and three of this pilot program more community solar will be built. The procedure for assigning access to the program will likely be similar to what we have described above but could be modified by the Public Service Commission based on the experiences of the first year.

Energy advocates gather on Maryland’s energy future

The Marylanders for Energy Democracy and Affordability (MEDA) network held a summit last Friday on the campus of St. John’s College in Annapolis. A wide array of organizations and individuals attended to learn about the latest on efforts to transform Maryland’s energy grid. The goal is to turn a system built for the needs of the 20th century into an engine of equity, prosperity, health, and empowerment for all Maryland communities.

The summit featured a full day’s agenda on such topics as energy affordability; new products and services; climate change and resiliency; environmental justice and public health; and community planning. In the day’s opening keynote address, Dr. Arjun Makhijani presented his vision for a Renewable Maryland and the need to democratize our electricity system along the way so that everyone has the opportunity to participate and benefit.

Bob King of Whisker Labs and Karl Rábago of Pace Energy and Climate Center spoke about the new world of products and services that are coming on to the market during a morning panel. Both speakers have deep experience in electricity markets. They spoke to what’s possible as the grid transforms from a one-way delivery system to a two-way marketplace for energy where individuals, businesses, municipalities, utilities, and others can all provide necessary grid services. These new markets have the potential to shift us toward renewable energy while making communities, infrastructure, and businesses more resilient to the increasing impacts of climate change.

To cap off the day, Tim Judson of NIRS, Jill Tauber of Earthjustice, and Montgomery County Council President Roger Berliner spoke about the current Public Service Commission proceeding (“PC 44”), how it is structured, where it’s headed, and ways for interested parties to get involved. After the summit wrapped up, many participants re-convened at a nearby pub to continue the conversation.

Want to get involved?

MD SUN and a diverse network of public interest organizations and residents are a part of the MEDA network. Together, we are participating in the PC44 process as well as on the broader goal of creating a fair, equitable, and democratic transition to a clean, reliable, and affordable energy economy. Sign up for updates from the MEDA network and stay up to date on what’s happening with efforts to transform the grid for the 21st Century.

 

 

Maryland PSC looks at the value of solar for electric cooperatives

Last month, the Maryland Public Service Commission (PSC) released a study it commissioned that examines how solar should be valued on the electric grid. Concurrently, it opened Public Conference 48 to examine the issue. The report is an important step forward in Maryland’s public conversation on the value of solar and other distributed energy resources. Unfortunately, it contains flaws that severely impact the results and its usefulness as a policy-making resource.

What is “value of solar”?

A “value of solar” study is one that attempts to quantify the monetary value of distributed solar on the electricity grid by breaking it down into various categories. This includes the cost of generation, how much the utility avoids paying in fuel costs in the future, the reduction in distribution costs, transmission charges, infrastructure investment savings, environmental benefits, etc. These studies have been done in numerous states at the request of public service commissions, state legislatures and other bodies. While the construction and methodologies of these studies vary, most have found the value of distributed solar to the electricity grid to be higher than standard energy offerings in the area studied.

Flaws in this study

Recently, Earthjustice and the Pace Energy and Climate Center reviewed the study and submitted comments to the Commission on behalf of MD SUN, Chesapeake Climate Action Network, Fuel Fund of Maryland, and Institute for Energy and Environmental Research. The comments note the study looked broadly at the issue by including to review solar’s impact on job creation and pollution reduction. These areas tend not to be part of the standard categories for calculating the costs and benefits of utility provided energy. Despite this, there are several points of concern with the study.

  1. Solar facility lifespan assumed to be 20 years. Standard lifespan assumptions for solar are 25 years. Leaving five years off the asset’s life in analysis distorts its long-term value to the electricity system.
  1. Avoiding transmission costs is valued at zero. Distributed solar, by providing energy to loads near it, reduces the need for electricity transmitted from afar. Intuitively this must have a value but the report does not include it.
  1. Avoiding new distribution capacity is valued at zero. As in #3 above, energy provided to loads in or near a solar home or business reduces the usage of, and wear on, electric distribution equipment. This must have a value but the report does not include it.

Want to investigate more?

Check out all of the filings made by interested parties on the Public Service Commission’s website.

What happens next?

The study was requested by the Maryland legislature last year. The Commission is required to report back to the legislature on the study and public comments by the end of March 2017. A similar study will soon be commissioned by the PSC for the investor-owned utilities (Pepco, Delmarva, BGE, & Potomac Edison) as part of Public Conference 44 on grid reform. The results of both studies could be used to determine new pilot rate structures for solar homeowners and ultimately more widespread

A social evening on solar

The Bowie Solar Co-op held a Social Mixer at the Old Bowie Town Grille last week. Over a few hours, with the buzz of the first round of the NCAA basketball tournament on TVs in the background, a lively group of solar homeowners and those interested in going solar got to know each other. Those with solar shared their knowledge on the topic and how it has worked for them. Folks interested or already part of the co-op asked questions on topics ranging from how solar attaches to your roof to curiosity about warranties and financing options.

“I really enjoyed seeing everyone get to know each other starting with their common interest in solar” observed Corey Ramsden, Program Director for MD SUN. “At one point I overheard two solar enthusiasts discover that they were part of the same garden club too.”

The Bowie Solar Co-op opened up in January of this year and recently selected Standard Energy Solutions to work with the group. Right now the 64 members of the group are scheduling appointments with their selected installer and receiving proposals that include the co-ops bulk discount. Interested homeowners in Prince George’s County can sign up to join the group through May 31 at www.mdsun.org/bowie.

Using solar storage to mitigate natural disasters’ impact

Solar systems with battery backup have the potential to provide communities with much needed resiliency in the face of natural disasters. These systems can protect vulnerable communities from the disaster’s most immediate, devastating effects by providing power when the electric grid goes down. Over an extended period, solar powered system replenish — even if roads are cut off, or access to gas for traditional home generators is unavailable or hard to get.

While the need for solar plus storage is clear, what is less clear is if solar systems with battery backup is a realistic option for communities seeking to improve their resiliency. We decided to answer this question and explore what it would take to help a community deploy solar plus storage at a meaningful scale.

Working with our parent organization, Community Power Network, we conducted an in-depth analysis of the current “state of the art” of solar plus storage. It sought to determine if solar plus storage is a viable means to protect vulnerable communities from the impacts of climate change. We modeled the financial feasibility of these projects and identified means to scaling up their deployment.

The research demonstrated several important findings. The battery market is robust enough to support solar plus storage. Solar plus storage can be financially positive for the institutions that build these projects. This is especially true for commercial entities facing high demand charges in their regular electric bill. Despite this, interest on the private business side for solar storage remains low. This is due to a low level of knowledge about storage, the complexity of developing such projects, and a lack of incentive for businesses to invest in resiliency of any form. On the public side, municipalities in the study area were very interested in using solar storage as part of their resiliency goals. This is despite the fact that the economics of such projects were much less compelling for municipalities. This is due to the complexity of utilizing tax credits. Despite this interest from municipalities, solar plus storage is not currently included in the local resiliency planning.

The barriers to growing solar plus storage are not financial or technical. In order for this technology to flourish, the policy environment must change. Policy should look to create demand for solar plus storage projects in resiliency planning. It should require municipalities and strategic businesses that provide communications, food, medicine, and shelter to the infirm and elderly to plan for emergency when power is out and gas stations are closed for an extended time frame. This will encourage municipalities and private sector entities to think pro-actively about how their systems could become more resilient.

To read the full report, click here.

Bowie Solar Co-op selects installer

The Bowie Solar Co-op has selected Standard Energy Solutions to install solar panels for the 53-member group. Co-op members selected Standard Energy Solutions through a competitive bidding process over ten other firms.

Co-op members selected Standard Energy Solutions because of its competitive pricing, local experience, and strong warranties.

The co-op is open to new members until May 31. Residents across Prince George’s County interested in joining the co-op can sign up at www.mdsun.org/bowie. Joining the co-op is not a commitment to purchase panels. Standard Energy Solutions will provide each co-op member with an individualized proposal based on the group rate. By going solar as a group and choosing a single installer, participants can save up to 20% off the cost of their system.

Montgomery co-op celebrates success

The Montgomery County Solar Co-op celebrated its success at Rockville City Hall last week. Co-op members joined with representatives of Solar Energy World, and public officials like Councilmember Sydney Katz and Lisa Feldt, Director of the county’s Department of Environmental Protection, as well as Rockville City Councilmembers Julie Palakovich Carr and Mark Pierzchala. After some brief words from the officials, Corey Ramsden, MD SUN’s Program Director, presented awards to the co-op’s promotional partners and several co-op members who were the first to join the group and the first to sign a contract to go solar with the group. Attendees socialized, got to know each other, shared details about their solar installations, and the rapid of adoption of solar in the county.

The biggest ever

This co-op has the distinction of being not only the largest solar co-op in MD SUN history but also in the history of Community Power Network which has similar programs in the District of Columbia, Virginia, West Virginia, Ohio, and Florida. From May 2016 through September, 244 county residents signed up to join the co-op. Together, 88 group members installed a little over 790 kilowatts of solar generating capacity with an approximate investment value of $2.2 million dollars. By working through a co-op, MD SUN estimates group members saved close to $395,000 dollars.

The group received eight competitive bids from area installers. Over the summer, an all-volunteer selection committee selected Solar Energy World to work with the group. Through the fall, group members signed contracts with Solar Energy World to go solar with most of the installations completed by the end of December.

Thank you!

MD SUN would like to thank each and every member of the Montgomery Solar Co-op and each promotional partner for making this group a huge success through their enthusiasm and collective efforts. Special thanks to the homeowners who volunteered for the co-op’s selection committee, sharing their time to review each bid and select an installer on behalf of the entire group.

Promotional Partners:

Montgomery County Department of Environmental Protection
City of Takoma Park
City of Rockville
City of Gaithersburg
Poolesville Green
Adat Shalom Congregation of Bethesda