Maryland’s community solar pilot program continues to face challenges as it seeks to scale up.

As of mid-June, subscriber organizations had applied for authorization to build 711.5 MW of solar generation. But five years into the seven-year pilot, the state has brought only 43 projects totaling 59 MW of capacity online, one-tenth of the 600 MW allowed.

The Maryland Public Service Commission (PSC) summarized the pilot’s status in a recent report to the state legislature, saying community solar has potential and deserves more resources despite its slow growth.

The problems are not unique to Maryland. About 40 states operated community solar programs as of the end of 2021, led by Florida at 1,636 MW, with all but nine states totaling less than 100 MW. In New Jersey, just 17 of 150 approved projects have been installed, with a combined capacity of 35.6 MW, or about 15% of the total capacity awarded. (See NJ Celebrates Completion of First Phase 2 Community Solar Project.) 

What accounts for the anemic actual capacity despite the intense interest?

“The pilot has attracted significant development interest and continues to grow in the number of projects and capacity, but the commission acknowledges that local solar policies and permitting processes have impacted [community solar] development,” PSC Communications Director Tori Leonard said. “Siting projects can be challenging due to local policies and a lack of additional financial mechanisms to build projects on preferred sites such as brownfields and rooftops.”

Subscriber organizations surveyed by the PSC said they were hampered by local zoning, supply chain problems, staffing issues related to the COVID-19 pandemic and challenges related to utility interconnections.

“While community solar has experienced strong growth in recent years, including in Maryland where installations have tripled since the start of 2020, land use obstacles remain the greatest barrier to further community solar deployment,” Scott Elias, director of Mid-Atlantic state affairs for the Solar Energy Industries Association, told NetZero Insider.

“There is well-organized opposition to solar development on agricultural land at the county level, which means the ability to site solar projects varies widely from jurisdiction to jurisdiction,” he explained. “Siting of ground-based projects is a significant limitation to program implementation, and the added cost and limited incentives for sites on parking lots, brownfields and commercial rooftops for community solar have limited their utilization.”

Potential Unfulfilled

About 97% percent of the energy in Maryland’s pilot has been subscribed to residential subscribers who have seen discounts of five to 10% below retail rates.

In addition to rate savings, the pilot projects could contribute to the renewable energy portfolio standard (RPS) capacity required for photovoltaic solar. Maryland currently has about 1,550 MW of solar, about a quarter of the 6,200 MW needed to meet its RPS requirements in 2030.

The PSC said community solar also can provide system benefits by deferring distribution capacity investments. “However, in order to realize these benefits, there must be some certainty that a DER [distributed energy resource] will be available and producing energy at the interconnected circuit’s peak in order for its capacity to be used in distribution planning,” it said.

The PSC said the muted response had made it difficult to draw conclusions on community solar’s costs and benefits.
“The limited number of operating projects hampers the ability to draw conclusions in areas such as energy market impacts, transmission benefits, impacts to the price of locational marginal pricing energy, and impacts to the standard offer service,” it said.

Projects in Operation

Among the companies trying to make the pilot a success is Summit Ridge Energy, which is developing 90 MWdc in Maryland, enough to power 12,500 homes and businesses. The company says it is the largest owner-operator of community solar assets in the U.S.

Denver-based TurningPoint Energy says it is the leading greenfield developer in the Maryland pilot and will have 40 MWdc of projects in operation in the state by the end of 2023.

On April 30, Summit Ridge and Cedar Ridge Community Church held a ribbon-cutting ceremony to celebrate the completion of a 2.5-MWdc community solar project in Montgomery County. The church signed a 25-year lease on eight acres of its 30-acre property with TurningPoint. At least 30% of the electricity generated by the project must go to low-and-moderate income (LMI) households, Franny Yuhas, director of development for the Mid-Atlantic region at TurningPoint, said in an interview.

On April 21, WeSolar and the University of Maryland Medical System announced a partnership to develop a solar farm in Baltimore City to provide power to the hospital’s facilities and city residents. Michael Schwartzberg, a spokesperson for UMMS, said in an email that the location for the project is yet to be determined.

“Our company’s mission is about equity,” WeSolar CEO Kristal Hansley said in a statement. “Our main goal is to reduce the bills of low-to-moderate-income customers by at least 25%.” WeSolar touts itself as “the nation’s first community solar provider headed by a Black woman CEO,” and says it helped with more than 100 MW in customer acquisition contracts in the Northeast.

The partnership calls for UMMS to pay $10,000 monthly for up to 18 months to help with construction of the solar farm, which is projected to generate 8 MW. UMMS has committed to purchasing up to half of the output. Once the farm is operating, UMMS employees who earn less than $67,000 will be able to buy solar energy for their residences from the BG&E grid at a discount of up to 25%.

Program Extended

Maryland’s community solar program started in 2017. It was originally supposed to run for three years, but in 2019 that was extended to seven years, and it is now set to run until 2024. (See Maryland PSC Seeks to Expand State’s Community Solar Pilot.)

The program could receive a boost from Maryland’s Climate Solutions Now Act of 2022, which provides tax exemptions for community solar projects. New projects are exempt from paying county or municipal property tax as long as they provide at least 50% of their electrical output to LMI customers at rates that are at least 20% lower than the rates charged by the local electric utility company, and are located on a rooftop, parking facility canopy or brownfield, said Susan Casey, a spokesperson for the Maryland Department of the Environment.

The PSC says that when the pilot ends, there should be “a full benefit-cost analysis … in a similar manner to other state programs, such as EmPOWER Maryland,” the state’s energy efficiency program. When the General Assembly is considering future legislation, the commission says, it should seek to maximize LMI consumers’ participation and benefits; coordinate potential projects with electric utilities; and pair projects with energy storage. Better coordination with utilities and the addition of storage could “increase both grid and market benefits,” the report says.

The PSC also says the legislature should investigate local planning and development requirements and seek more funding to lower ratepayers’ costs and locate projects in preferred locations like brownfields and rooftops.

The PSC submitted the report July 1 to the Senate Finance Committee and the House Economic Matters Committee, with public comments due by Aug. 22. The commission will now consider further steps, Leonard said. Linda Forsyth, chief of staff to Senate Finance Committee Chair Delores Kelley (D), said that the committee “won’t be holding any hearings or briefings regarding this issue in 2022.” With Kelley retiring at the end of her term in January 2023, further action will happen only after the Senate president replaces her, Forsyth said. C.T. Wilson, chair of the House Economic Matters Committee, did not respond to a request for comment.