Net Metering

Program Net Metering
Category Regulatory Policy
Implementing sector State
Last Update
State Maryland
Administrator MD Public Service Commission
Website https://www.psc.state.md.us/electricity/the-electricity-division/community-net-…
Technologies Solar Photovoltaics
Sectors Residential

 NOTE: As a part of the Exelon PHI merger, the PSC initiated a grid modernization proceeding to ensure the electric distribution system in Maryland is customer centric, affordable, reliable and environmentally sustainable. The working groups in the proceeding proposed pilot program for Time Of Use (TOU) rates with changes in net metering compensation. The TOU will track on-peak and off-peak consumption and production separately, and each nets separately. In June 2018, the PSC the approved the pilot programs to be rolled out by April 2019. 

Maryland’s net-metering law has been expanded several times since it was originally enacted in 1997. The net metering rules apply to all utilities -- investor-owned utilities (IOUs), electric cooperatives and municipal utilities. Residents, businesses, schools or government entities with systems that generate electricity using solar, wind, biomass, fuel cell, closed-conduit hydroelectric, and micro-CHP resources are eligible for net metering. The law permits outright ownership by the customer-generators as well as third-party ownership structures (e.g., leases and power purchase agreements). The provisions allowing for micro-CHP systems and certain third-party ownership structures were added in 2009. Net metering was extended to fuel cell electricity generation systems in 2010 and closed-conduit hydroelectric facilities in 2011.

 Other important details of Maryland's net metering policy include:

  • Net metering is available statewide until the aggregate capacity of all net-metered systems reaches 1,500 MW. This limit is approximately 10% of the peak demand in 2014. The aggregate limit on net metering was 34.7 MW prior to the 2007 amendments. The local utility may, however limit the installation of distributed generation if the total generation in the network is beyond the threshold as provided in the State's  interconnection rules. As of September 2018, approximately 772 MW of net metered systems were installed. 
  • System size is generally limited to 2 MW, except micro-CHP resources are limited to 30 kilowatts (kW). Systems must be primarily intended to offset all or a portion of a customer's on-site energy requirements and are limited in size to that needed to meet 200% of the customer's baseline annual electricity use. 
  • Net excess generation (NEG) is generally carried over as a kilowatt-hour credit (i.e., at the retail rate) for 12 months. Compensation for any NEG remaining in a customer's account after a 12-month period ending in April of each year is paid to the customer at the commodity energy supply rate.
  •  Customers own and have title to all renewable-energy credits (REC) associated with electricity generation by net-metered systems.
  • Meter aggregation (either physical or virtual) is permitted for customers that use electrical service for agriculture, as well as non-profit organizations and municipal governments or their affiliates.
  • The PSC must file with the Maryland General Assembly detailed annual reports (see 2018 Net Metering Report) describing the status of the state's net-metering program.

Utilities must install a meter at a customer's facility capable of measuring the flow of electricity in both direction (if necessary), and must offer net metering through a tariff or contract at non-discriminatory rates compared to those offered to customers that do not net meter. The net-metered customers are typically required to pay a monthly customer charge regardless of the amount of electricity generated. However the customers are billed only for the energy that they use, netted against the amount generated by the customer. SB 353 enacted in May 2015, allows a person or a company who is installing a solar generation facility on the customer’s property to submit application for interconnection with the electric distribution facility. While the solar installer might accept payment prior to the installation, they must refund the payment if the application for interconnection is denied.

Virtual Net Metering

HB 1087 enacted on May 2015 authorizes the Public Service Commission (PSC) to establish a three year pilot program for community solar projects in the State. Community solar projects must be sized 2 MW or less, and must have at least 2 subscribers. Customers of all rates classes including residential, commercial, and people in leases properties can participate in the community solar project. Value of electricity generated by the solar system is credited to its subscribers through virtual net-metering. Individual subscriber may not receive credit for more than 200% of the subscriber's baseline annual usage. Individual subscriptions are capped at 200 kW, and must be less than 60% of the total subscription of the particular community solar system.

Community solar energy system must be located in the same electric service territory as its subscribers. Any unsubscribed electricity from the community solar projects is sold to the electric company at the electric company’s avoided cost. The legislation allows any third party to finance, build or operate a community solar project. The PSC is required to adopt regulations to implement the pilot program before May 15, 2016. The PSC must also in consultation with the Maryland Energy Administration convene a stakeholder workgroup to study the benefits and costs of the pilot program and make recommendations on the advisability of establishing a permanent program by July 1, 2019. Total solar capacity installed under this pilot program shall count towards the total state net-metering cap of 1,500 MW. As of June 2018, 116 Community Solar projects have been proposed with total capacity of 189 MW. 

Customers with systems that meet all applicable safety and performance standards established by the National Electrical Code (NEC), the Institute of Electrical and Electronics Engineers (IEEE), Underwriters Laboratories (UL) and any other PSC requirements may not be required by utilities to install additional controls, to perform or pay for additional tests, or to purchase additional liability insurance.


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