Clean State Energy Actions 2011 Update. maryland

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1 Energy Efficiency Appliance/Equipment Efficiency Standards Building Energy Codes Utility Demand-Side-Management Utility Rate Realignment Energy Savings Targets/Energy Efficiency Resource Standards Minimum energy efficiency standards for nine categories of appliances Residential and Commercial: Maryland Building Performance Standards based on the 2006 IECC, mandatory statewide Residential and Commercial: Updated code to 2009 IECC mandatory statewide 15% demand side management by 2015 based on 2007 baseline Requires an electric company to include procedures for the competitive selection of heating, ventilation, air conditioning, or refrigeration service providers in its electricity savings and demand reduction plan (SB 1095) Decoupling in natural gas and electricity markets Goal to reduce per capita consumption and peak demand 15% by 2015 The Community Energy Loan Program provides financing for local governments and nonprofit organizations to identify and implement energy conservation improvements; SLAP is a revolving state agency loan program to be used for energy performance contracting or improvements The Maryland Strategic Energy Investment Fund will direct proceeds from the RGGI auction to energy efficiency and renewable energy programs as well as bill payment assistance for low income consumers Offers an income tax credit nonresidential and residential multifamily buildings of at least 20,000 sq. ft. that are constructed or rehabilitated to meet criteria set forth by the U.S. Green Building Council or other similar criteria (newly constructed buildings must be located on a qualified brownfields site, or in a priority funding area, and not in a wetlands area) The Change a Light program encourages Marylanders to change at least one incandescent light bulb to a compact fluorescent light bulb annually; Home Performance with Energy Star is a market transformation program to train and certify contractors to provide whole-house diagnostics and improvements to customers homes; the weatherization program provides assistance for low income energy efficiency improvements Allows for Property Assessed Clean Energy (PACE) financing (HB 1567) Required the Department of Housing and Community Development to encourage the construction of new residential structures that are high performance homes. Highperformance homes are those that meet or exceed a LEED silver rating (HB 630). Established a rebate program administered by the Maryland Energy Administration for energy efficiency improvements in single-family residences in Maryland through the Home Performance with Energy Star Program. Created a sales and use tax holiday for certain energy-efficient appliances, beginning in Localities in Maryland have suspended most PACE programs due to the The Federal Housing Financing Agency s (FHFA) July 2010 concerning the senior lien status associated with most PACE programs.

2 Clean Electricity Renewable/Alternative Energy Portfolio Standards and Goals Net Metering and Interconnection Standards Requires that 20% of the state s electricity supply come from renewable sources by 2022; utilities demonstrate compliance by acquiring renewable energy credits (RECs) Altered the renewable energy portfolio standard by increasing the percentages of electricity sales that must be met in specified years through the accumulation of renewable energy credits from certain sources, redefines a specified renewable energy credit, increases the maximum allowable alternative compliance payment, subject to a certain limitation (COMAR et seq.) Accelerated the annual solar energy requirements and the solar alternative compliance schedule, will take effect in 2011 (SB 277) Increased the annual percentage requirements under Maryland s Renewable Energy Portfolio Standard (RPS) for electricity from solar energy sources between 2011 and 2016 to 0.5% (SB 277). Expanded the definition of a Tier 1 renewable sources to include waste-to-energy and refuse-derived fuel (S.B. 690). Included energy from a specified solar water heating system as an eligible resource for meeting the renewable energy portfolio standard (S 717). Interconnection standards for all eligible systems up to 2 MW; systems owned or leased by residents, businesses, schools or government entities that generate electricity using solar, wind or biomass resources are eligible for net metering until the aggregate capacity of all net-metered systems reaches 1,500 MW; developing interconnection standards for all distributed generation Extended net metering policies to micro-combined heat and power systems and third-party ownership structures (HB 1057, SB 981) Extended net metering to qualifying fuel cell electricity generation equipment, effective October 2010 (HB 821) Revised how customer-generators are compensated for net excess generation (NEG) (HB 801) Requires NEG to be carried forward from month to month as a monetary credit whose value is determined by the prevailing market price Customer-generators may also receive payment for NEG remaining at the end of a 12 month period Maryland Public Service Commission (PSC) developing regulations to implement the revision, including a method for determining the value of NEG credits PSC to convene a working group to address time differentiated crediting, as well as meter aggregation and credit transfers for agricultural, non-profit, and governmental customer-generators Extended net metering policies to closed conduit hydro facilities (SB 271).

3 Shale Gas Development, Regulation and Policy The governor signed an executive order establishing the Marcellus Shale Safe Drilling Initiative to assist state policymakers and regulators in determining whether and how gas production from the Marcellus Shale in Maryland can be accomplished without unacceptable risks of adverse impacts to public health, safety, the environment and natural resources. The advisory committee will submit its recommendations for best practices for all aspects of natural gas exploration and production in the Marcellus Shale in Maryland by August 1, A final report which will include findings and recommendations relating to the impact of Marcellus Shale drilling including possible contamination of groundwater, handling and disposal of wastewater, environmental impacts, impacts to forests and important habitats, greenhouse gas emissions and economic impact will be issued no later than August 1, The Maryland Strategic Energy Investment Fund will direct proceeds from the RGGI auction to energy efficiency and renewable energy programs as well as bill payment assistance for low income consumers; offers rebates for residential and commercial geothermal heat pump property; provides financial incentives to homeowners, businesses, local governments and non-profit organizations that install solar waterheating systems or solar-electric systems Offers a production tax credit for electricity generated by wind, geothermal energy, solar energy, hydropower, small irrigation power, municipal solid waste and biomass resources; offers a corporate income tax credit for photovoltaics, wind turbines and fuel cells that serve a green whole building, a green base building, or green tenant space; provides a property tax exemption for residential solar energy systems; requires that solar heating and cooling system be assessed the same as traditional sources for tax purposes; exempts from the state sales tax all wood or refusederived fuel used for residential heating purposes Provides grants for small wind energy systems through the Windswept program Created an income tax credit of $0.03/gallon for purchases of biodiesel used for space heating or water heating Residential wind energy equipment and devices that use solar thermal electric energy are eligible for property tax exemption (HB 1171) Sales tax exemption for residential wind energy equipment Revised the definition of solar energy equipment so that other systems in a net metering type arrangement could also be sales tax exempt Reopened the Windswept Grant Program application period in 2009 to provide funds for the installation of wind energy systems of at least 1 kw (over 20 kw approved on a case-by-case basis) Revised corporate tax credit for renewable energy systems (HB 494) Extends the facility in service deadline from 2010 to 2015 Sets a minimum tax credit limit of $1,000 Makes excess tax credits refundable Established a fund for the management of coal combustion by-products, authorizes the Department of the Environment to establish and collect fees (HB 1556) Authorized political subdivisions to enact an ordinance or a resolution establishing a Clean Energy Loan Program to provide loans to residential and commercial property owners for the financing of energy efficiency and renewable energy projects (HB 1567)

4 (continued) Allows for Property Assessed Clean Energy (PACE) financing (HB 1567) Provided rebates via the Mid-Size Wind Energy Grant program, for the installation of non-residential wind energy systems from kilowatts (kw). Offered rebates for mid-sized solar photovoltaic systems at $500 per kw and for solar water heating systems at 15% installed cost. Created rebates for residential and non-residential geothermal systems of offered $2,000 and $7,000, respectively. Extended the income tax credit for purchases of biodiesel used for space heating or water heating until 2017 (SB 959). Created a solar energy grant program to offer rebates for residential and non-residential solar PV (up to 20kW) and thermal systems. Exempted sales of electricity generated by specified solar energy or wind energy equipment for use in residential property or for supply to the electric grid from the sales and use tax (SB 398). Localities in Maryland have suspended most PACE programs due to the The Federal Housing Financing Agency s (FHFA) July 2010 concerning the senior lien status associated with most PACE programs. Alternative Fuels & Vehicles Infrastructure Enhancement and Evaluation Established the Maryland Electric Vehicle Infrastructure Council to develop an action plan to facilitate the successful integration of electric vehicles into the transportation network, to assist in developing and coordinating standards for streamlined permitting and installation of residential and commercial EV charging stations and supply equipment, to develop a statewide charging infrastructure plan, including public charging stations, and to increase consumer awareness and demand for such vehicles. The Council will submit a report with its recommendations by December 1, 2012 (SB 167). Offered ethanol and biodiesel production tax credits Created a state income tax credit for tax years 2011, 2012, and 2013 only, for 20% of the cost of qualified electric vehicle recharging equipment. The limit per recharging device is $400 (HB 163). Created a grant program to aid the installation of electric vehicle recharging stations Created a credit against the motor vehicle excise tax for certain qualified plug in electric drive vehicles purchased between July 1, 2010 and June 30, This is a three year program and each vehicle is eligible for up to $2,000. Offered tax credits of up to $2,000 for use against the excise tax imposed for the purchase of qualified plug-in EVs. Allowed permitted plug-in EVs to operate in Maryland HOV lanes regardless of the number of occupants. Exempted Hybrid Electric Vehicles that obtain a fuel economy rating from the U.S. EPA of at least 50 miles per gallon during city driving from certain mandatory motor vehicle emissions and inspection testing requirements until September 30, Launched The Maryland Hybrid Truck Initiative to deploy 143 hybrid trucks this year to be split between five Maryland companies. The hybrids are expected to cut up to 460,000 gallons of petroleum and cut 262,610 pounds of greenhouse gas emissions each year, all the while creating more than 200 jobs (ARRA funded).

5 (continued) Required the Public Service Commission to establish a pilot program for electric customers to recharge electric vehicles during off-peak hours, requires the program to include incentives for residential, commercial, and governmental customers to recharge electric vehicles in a specified manner, provides that incentives may include credits on distribution charges, and rebates on the cost of charging systems, demand response programs, or other approved incentives (S 179). Allowed an income tax credit for 20% of the cost of qualified electric vehicle recharging equipment for the taxable years The credit is limited to $400 per individual recharging system (HB 163). Lead By Example Appliance/Equipment Efficiency Building Efficiency Green Power Purchasing Alternative Fuel and Vehicle Fleets Requires all new energy-using products in state buildings to carry the Energy Star label or be in the top 25% in energy efficiency when products with labels are unavailable The Maryland Energy Administration provides loans through the State Agency Loan Program to state agencies for cost-effective energy efficiency improvements in state facilities; requires energy consumption in state buildings by reduced by 5% by 2009 and 10% by 2010 relative to a 2005 baseline; LEED or Green Globes certification required for all capital projects over 5,000 sq. ft.; the Green Buildings Act requires all new schools and state buildings to meet the LEED Silver standard; the Clean Energy Schools program is working towards have a renewable demonstration project in at least one school in each county in Maryland Enabled the adoption of the International Green Construction Code (IGCC) by all local governments across the state (HB 972). At least 6% of the electricity consumed by state-owned facilities must be generated from green energy sources, such as wind, solar, landfill gas, and other biomass resources At least 50% of state vehicles must use a minimum biodiesel blend of B5 beginning in fiscal year 2008; the state will revise fleet policy and purchasing guidelines to offer more flexibility in purchasing, where practical, low emission vehicles and AFVs for its fleet; the state must help develop the refueling and maintenance infrastructure required to make using certain types of AFV use practical GHG Emissions GHG Policies Participant in Climate Registry; utility cap through RGGI; Climate Action Plan in progress, due 2008: the Climate Change Commission will assess the possible impacts of climate change; calculate Maryland s contribution to the climate change problem; work together with various state agencies, energy providers, business leaders and other groups to develop a greenhouse gas reduction strategy; and develop a plan for reducing the state s vulnerability to sea level rise and other effects of climate change; RGGI participant; adopted CA vehicle emissions standards Requires the Department of the Environment to publish and update an inventory of statewide greenhouse gas emissions for calendar year 2006, and develop a specified plan to reduce greenhouse gas emissions and develop renewable energy (SB 278) Requires the state to reduce statewide greenhouse gas emissions by 25% from 2006 levels by 2020 Requires specified erosion protection projects to include specified nonstructural shoreline stabilization measures, requires the Department of the Environment, in consultation with the Department of Natural Resources, to adopt regulations

6 Clean Energy RD&D Partnerships, Grants, Awards, and Dedicated Funding Created income tax credits of up to 10% to individuals or corporations for qualified research and development expenses for cellulosic ethanol technology. The total amount of the credit may not exceed $250,000 per calendar year. Clean Energy Economic Development Task Force, Workforce Development, Incentives, Analysis, Etc. In April 2008, created the Maryland Strategic Energy Investment Program to provide grants and training funds for clean energy jobs - Trained 2,000 Marylanders for green jobs in the sectors of manufacturing, construction, environmental technology and solar energy through a $5.8 million grant from the U.S. Department of Labor. Opened the Maryland Clean Energy Center in 2009 to promote and coordinate the expansion of the green economy Requires the Secretary of Budget and Management to develop and implement a plan for hiring current and former Family Investment Program recipients, their children, foster youth and certain obligors Requires that the job skills enhancement program include job training for employment in energy efficiency and renewable energy industries Maintains the Maryland Green Registry, a free, voluntary self-certification program for organizations of all types to promote their best practices for environmental protection The registry provides checklists and innovative ideas to encourage members to take further action The Maryland Energy Administration (MEA) created the Clean Energy Economic Development Initiative (CEEDI) Support Program to assist in achieving the goal of 100,000 green-collar jobs by 2015 Uses this program to help attract emerging clean energy companies and to expand existing clean energy companies including the generators, component producers and the associated supply chain producers To implement this program, MEA has issued guidelines and application instructions in line with DOE parameters on its website All grant awards are expected to be performance based with payment made against attainment of certain pre-determined milestones Trained 2,000 Marylanders for green jobs in the sectors of manufacturing, construction, environmental technology and solar energy through a $5.8 million grant from the U.S. Department of Labor

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