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A Bold Renewables Policy Lures Leading Solar Leasers to Maryland

The state's 20% renewable portfolio standard and various tax incentives have attracted three of the country's top solar leasing firms this year

By Maria Gallucci, SolveClimate News

Jul 18, 2011

Maryland's ambitious renewables goal and booming solar market have lured its third solar leasing firm this year, putting the state on track to substantially boost the rate of installations for rooftop systems.

, a San Francisco solar provider that owns, maintains and insures solar arrays and sells the electricity to homeowners, announced last week that it was teaming up with two Maryland installers to offer its services in the state for the first time.

The company can expect competition from other California firms eager to tap a promising new market.

SunRun's announcement came just weeks after Oakland-based said it would move into Maryland as part of an East Coast expansion that includes Delaware, Massachusetts, New Jersey and New York.

In January, SunRun's closest competitor, San Mateo, Calif.-based , acquired Clean Currents of Silver Spring to serve as its operations center for Maryland and the District of Columbia. SolarCity also offers residential solar systems for sale and lease through Home Depot stores in Maryland and D.C., plus four other states.

"That is a testament to the impact that the industry has had in the state," Ian Hines, a spokesperson for the , said of the leading solar companies' recent moves.

Hines said that his office was excited about the solar leasing model because it could allow more residents to purchase solar power from rooftop panels without paying tens of thousands of dollars in upfront equipment costs.

"We didn't particularly target [leasing] as a way to grow solar in Maryland, but that has been an organic outgrowth of the other successful policies that we’ve put in place," he said.

Those policies have helped to ramp up Maryland's solar capacity by nearly 20,000 percent — from 100 kilowatts in 2006 to more than 20 megawatts today. Solar jobs in that five-year frame are expected to jump from 900 positions to 1,200 at the end of this year.

In June, the (SEIA) formally recognized Maryland's solar growth, deeming it a national industry leader.

The state's solar push is driven largely by its renewable portfolio standard (RPS), which requires that 20 percent of its energy come from clean resources by 2022. Two percent of that total must come from solar electricity and water heating systems.

Maryland has offered various incentives to increase solar installations and multiply the number of solar renewable energy credits (SRECs) that state utilities can purchase to satisfy the RPS.

Project Sunburst, for example, offers grants of $1,000 per kilowatt to state and local government agencies and community colleges to help offset the cost of installing rooftop panels.

Hines said that since 2010, Sunburst has awarded more than $9.3 million in federal stimulus funds to nearly 9.5 megawatts of solar projects — enough to power 1,000 homes — and spurred $36 million in private investment while creating 80 jobs.

The state is also expected to issue 2,000 of its $500-per-kilowatt this year for systems under 20 kilowatts in size. That's five times the amount issued in fiscal year 2009, Hines said.

Massive utility rate hikes as high as 86 percent in parts of the state have also helped boost sales of solar power, which can cost 10 to 15 percent less than electricity from fossil fuel plants.

Maryland's "power rates, subsidies and sunlight make it a place where we can offer a good customer value proposition," SunRun CEO Edward Fenster told SolveClimate News.

The four-year-old solar provider has 11,00 customers across nine states, giving it the largest share of the nation's residential market for solar providers. Last year, SunRun provided one out of every eight solar installations nationwide, he said.

Fenster credited the Treasury's with giving his business part of the capital it needed to expand.

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