Community Solar – Highlighting state incentives to expand community solar opportunities
By David Comis, Senior Energy Program Manager
This is part 6 of a 7 part series on community solar.
Please note, the comments in this blog are the personal opinions of the author and do not represent the views of the Maryland Energy Administration or the State of Maryland.
The Maryland Public Service Commission (PSC) is the program manager for the Community Solar Pilot Program. At his time, the Maryland PSC does not offer any monetary incentives to help establish the program.
After reviewing the PSC-implemented Community Solar Pilot Program, the Maryland Energy Administration (MEA) offered two incentive programs to help encourage the development of community solar arrays directed towards low-and-moderate income (LMI) subscribers. Incentives were provided in two ways. The first program, the Community Solar LMI-Power Purchase Agreement (PPA) grant, was established to help subscriber organizations offer subscriptions to LMI households that 1) provided deep discounts below the utility’s standard offer service rates, 2) encouraged short subscription terms, or allowed subscribers to easily get out of an agreement if necessary, and 3) provided funding to help subscriber organizations validate the income of low or moderate income subscribers. The funding provided to the subscriber organization locks in deeply discounted energy rates to LMI subscribers over a 20 year period. Subscribers may retain their subscriptions over this 20 year period as long as they pay their bills within a timeframe required by the subscriber organization.
The second MEA program, the Community Solar Guaranty Grant, is designed to remove the perceived financial risk associated with the LMI subscribers. Higher financial risk results in higher interest rates from the lending institutions, or financier. The Guaranty Grant ensures the payment from a LMI subscriber during the first seven years of array operation, reducing financier risk… by removing the “added” financial risk, the LMI project should receive an interest rate comparable to a non-LMI project.
Both incentive programs are available for all projects receiving capacity under the LMI category. In addition, projects in the Small, Brownfields, and Other (SBO) category that subscribe at least 51% of their energy to the LMI community are also eligible to participate in both incentive programs.