Net Metering

Summary

Maryland’s net-metering law has been expanded several times since it was originally enacted in 1997. The net metering rules apply to all utilities -- investor-owned utilities (IOUs), electric cooperatives and municipal utilities. Residents, businesses, schools or government entities with systems that generate electricity using solar, wind, biomass, fuel cell, closed-conduit hydroelectric, and micro-CHP resources are eligible for net metering. The law permits outright ownership by the customer-generators as well as third-party ownership structures (e.g., leases and power purchase agreements). The provisions allowing for micro-CHP systems and certain third-party ownership structures were added in 2009. Net metering was extended to fuel cell electricity generation systems in 2010 and closed-conduit hydroelectric facilities in 2011.

 Other important details of Maryland's net metering policy include:

• Net metering is available statewide until the aggregate capacity of all net-metered systems reaches 3,000 MW. This limit was raised from 1,500 MW by S.B. 407 in 2021. The aggregate limit on net metering was 34.7 MW prior to the 2007 amendments. The local utility may, however limit the installation of distributed generation if the total generation in the network is beyond the threshold as provided in the State's  interconnection rules. As of June 2022, approximately 962 MW of net metered systems and 71 MW of community solar capacity was interconnected. 
• System size is generally limited to 5 MW (increased from 2 MW by CH581/HB 440 of 2022), except micro-CHP resources are limited to 30 kilowatts (kW). Systems must be primarily intended to offset all or a portion of a customer's on-site energy requirements and are limited in size to that needed to meet 200% of the customer's baseline annual electricity use.
  
• Local governments may own and/or operate several solar energy generating facilities on contiguous lots provided that each lot's capacity is no greater than 2 MW and aggregate capacity for the installation is no greater than 5 MW (Per authority in SB 508, 2021).
  
• Aggregation is allowed for 2 MW facilities, per HB 1188 of 2023, on the same or contiguous parcels up to a total of 14 MW. Aggregated facilities may not sell directly into the PJM market.
  
• Net excess generation (NEG) is generally carried over as a kilowatt-hour credit (i.e., at the retail rate) for 12 months. Compensation for any NEG remaining in a customer's account after a 12-month period ending in April of each year is paid to the customer at the commodity energy supply rate.
• Effective October 1, 2023, customers will have the option to choose to infinitely accrue credits in lieu of annual reconciliation payouts (S.B. 143 of 2023)
  
•  Customers own and have title to all renewable-energy credits (REC) associated with electricity generation by net-metered systems.
• Meter aggregation (either physical or virtual) is permitted for customers that use electrical service for agriculture, as well as non-profit organizations and municipal governments or their affiliates.
• The PSC must file with the Maryland General Assembly detailed annual reports (see 2018 Net Metering Report) describing the status of the state's net-metering program.

Utilities must install a meter at a customer's facility capable of measuring the flow of electricity in both direction (if necessary), and must offer net metering through a tariff or contract at non-discriminatory rates compared to those offered to customers that do not net meter. The net-metered customers are typically required to pay a monthly customer charge regardless of the amount of electricity generated. However the customers are billed only for the energy that they use, netted against the amount generated by the customer. SB 353 enacted in May 2015, allows a person or a company who is installing a solar generation facility on the customer’s property to submit application for interconnection with the electric distribution facility. While the solar installer might accept payment prior to the installation, they must refund the payment if the application for interconnection is denied.

Virtual Net Metering

HB 1087 enacted on May 2015 authorizes the Public Service Commission (PSC) to establish a three year pilot program for community solar projects in the State. Community solar projects must be sized 5 MW or less, and must have at least 2 subscribers. Customers of all rates classes including residential, commercial, and people in leases properties can participate in the community solar project. Value of electricity generated by the solar system is credited to its subscribers through virtual net-metering. Individual subscriber may not receive credit for more than 200% of the subscriber's baseline annual usage. Individual subscriptions are capped at 200 kW, and must be less than 60% of the total subscription of the particular community solar system.

Community solar energy system must be located in the same electric service territory as its subscribers. Any unsubscribed electricity from the community solar projects is sold to the electric company at the electric company’s avoided cost. The legislation allows any third party to finance, build or operate a community solar project. The PSC is required to adopt regulations to implement the pilot program before May 15, 2016. The PSC must also in consultation with the Maryland Energy Administration convene a stakeholder workgroup to study the benefits and costs of the pilot program and make recommendations on the advisability of establishing a permanent program by July 1, 2019. Total solar capacity installed under this pilot program shall count towards the total state net-metering cap of 3,000 MW. 

Customers with systems that meet all applicable safety and performance standards established by the National Electrical Code (NEC), the Institute of Electrical and Electronics Engineers (IEEE), Underwriters Laboratories (UL) and any other PSC requirements may not be required by utilities to install additional controls, to perform or pay for additional tests, or to purchase additional liability insurance.