Geothermal qualifies for renewable energy credits in Maryland

Posted on: July 28, 2012

On May 22, 2012, Maryland Governor Martin O’Malley signed into law a bill that effectively makes Maryland the first state to approve geothermal heating and cooling systems’ eligibility for Renewable Energy Credits (RECs). RECs have been used for many years now and have proven to make renewable energy projects, including solar, wind, and water power, more economically viable. The primary driver of the legislation was lobbyist Jack Neil of Jack Neil Associates LLC, and it was sponsored by Senator Thomas Middleton, Chairman of Senate Finance Committee, and House Delegate Sally Jameson of the House Economic Matters Committee.

What are RECs?

Renewable energy credits are basically energy commodities that can be traded among companies. One REC represents one megawatt-hour (MWh) of electricity generated from an eligible renewable energy resource. You may have heard of carbon trading, where companies can barter with “carbon credits” designed to reduce pollution. RECs are similar, but deal in carbon-neutral renewable energy as opposed to pollution.

Why are RECs important for geothermal?

Geothermal heating and cooling systems are really just starting to get traction in the area, and are still expensive for many people. With the uncertainty of federal tax programs and future funding for Maryland’s energy grant programs, geothermal RECs provide additional financial incentives and should help the geothermal market sustain itself and enhance future growth. This is especially important because it comes at a time when huge efforts are being made to spread the word about the benefits of geothermal systems.

How can I claim RECs?

You will be able to apply for RECs with the Maryland Public Service Commission (PSC) and the PSC will determine your eligibility.

How will eligibility be determined?

The formula for calculating RECs was created by the PSC and involves converting your system’s BTUs to kilowatt-hours. If you own a geothermal system and want to apply for the REC program, you will need to provide data about your system to the PSC, including the type of residential structure, or, for commercial buildings, the size, uses, and activities that take place in your building. The PSC will then determine your eligibility from the information you provided, make their calculations, and award you your RECs.

What’s the future look like for geothermal RECs in Maryland?

We expect to see geothermal heat pumps continue to increase in popularity now that they’ve entered the REC program, especially as the Department of Energy and the Environmental Protection Agency found geothermal heat pump systems to be the most effective for space heating and cooling, and water heating.

Key lobbyist Jack Neil points out that the lobbying campaign started in 2010. The 2010 strategic blue print proved successful during the 2012 legislative enactment for the geothermal measures: not one negative vote in committees of jurisdiction or chamber floors and for the dozen related votes on Senate Bill 652 and House Bill 1186.

At Wheat & Sons we’ve been installing geothermal heat pumps in Maryland for years! We have all the experience necessary to make sure your geothermal heat pump installation is a success and we can help you benefit from the REC program today!