Public Utilities - Solar Energy Generating Systems and Solar Renewable Energy Credits (Affordable Solar Act)
HB0345, the Affordable Solar Act, makes broad changes to Maryland’s solar energy and renewable portfolio standard framework. It authorizes residents to purchase and install a defined “portable solar energy generating system” for residential use and bars electric companies from requiring prior approval, extra fees, or additional equipment for those devices, while also stating that such systems are not eligible to count toward renewable energy portfolio standard compliance and may not generate renewable energy credits.
The bill also creates a new category of solar credits, “SREC-II,” for qualifying distributed solar systems and qualifying utility-scale solar systems, and it revises the renewable energy portfolio standard to include solar generation from those systems. Beginning in 2028, the Public Service Commission would be required to procure SRECs and SREC-IIs through a new escrow-based mechanism, and electric cooperatives and municipal electric utilities would be allowed to satisfy their solar obligations through that procurement process. The bill further establishes two new solar incentive programs: a Distributed Solar Facilities Incentive Program and a Utility-Scale SREC-II Program, both intended to drive substantial new solar capacity through 2035.
In addition to the solar procurement and incentive structure, the bill shifts how alternative compliance payments are handled. Rather than sending certain compliance fees to the Maryland Strategic Energy Investment Fund, the bill directs them into a new escrow account administered under the Public Service Commission’s oversight. It also requires public service companies to report gross receipts information for large electricity customers and directs 75% of franchise tax revenue attributable to customers using more than 100 megawatts of electricity into the same escrow account. The bill amends tax and utility statutes to support this new financing and procurement structure and takes effect October 1, 2026.
The overall sentiment reflected in the bill materials is supportive of expanding solar access and accelerating solar deployment, as shown by the large group of sponsoring delegates and the bill’s framing as the “Affordable Solar Act.” Although no committee transcript or vote record is provided, the bill’s structure suggests a policy goal of lowering barriers to residential solar, expanding distributed and utility-scale solar development, and creating a more direct procurement system for solar credits. The emphasis on ratepayer cost limits, market segmentation, and long-term capacity targets indicates an attempt to balance growth with affordability.
The main points of contention likely involve cost allocation, utility compliance obligations, and the new labor and procurement requirements. Utilities may object to the mandatory procurement of SREC-IIs, the escrow-account structure, and the redirection of franchise tax revenue, while consumer advocates may scrutinize the nonbypassable surcharge and the bill’s impact on electric bills. Labor and community groups may support the prevailing wage, apprenticeship, local hiring, and community benefit agreement provisions, while some project developers may view those requirements as increasing project complexity and cost.
HB0345 would significantly amend Maryland’s Public Utilities and Tax-General laws by creating new solar credit definitions, new PSC procurement authority, and new compliance-payment and escrow mechanisms. It would alter the renewable portfolio standard so that certain solar obligations are met through SREC-II procurement for qualifying distributed and utility-scale systems, establish new incentive programs for up to 4,000 megawatts of additional solar capacity, and redirect certain compliance and franchise tax revenues into a dedicated escrow account rather than the Maryland Strategic Energy Investment Fund. The bill also affects electric companies, electric cooperatives, municipal electric utilities, solar developers, and large electricity customers, while adding reporting, labor, and community-benefit requirements for qualifying projects.
The bill appears generally favorable toward solar expansion and consumer access, with a strong pro-renewables and pro-development orientation. Its title, sponsor list, and detailed incentive structure suggest broad support among its introducers for accelerating solar deployment and making residential solar more accessible. At the same time, the bill’s cost controls, procurement rules, and labor standards indicate an effort to address affordability and implementation concerns, implying a policy approach that is supportive but tightly managed.
Likely areas of contention include whether the bill’s new escrow-funded procurement system and nonbypassable surcharge would raise customer bills, whether utilities should be required to procure SREC-IIs under a state-administered process, and whether redirecting franchise tax revenue is an appropriate funding mechanism. Labor provisions such as prevailing wage, apprenticeship requirements, local hiring, and community benefit agreements may be supported by labor and community advocates but opposed by some developers or utilities as increasing project costs or limiting flexibility. Another possible point of debate is the bill’s exclusion of portable solar systems from renewable credit eligibility, which may be seen as limiting the financial value of those systems even while easing installation rules.