The "Renewable Energy Portfolio Standard - Renewable Energy Credits - Geothermal Heating and Cooling" bill (SB 652 and HB 1186) has passed in Maryland. The legislation effectively makes geothermal heat pumps (GHPs) an accepted technology available for Renewable Energy Credits (RECs) under the state’s Renewable Portfolio Standard (RPS) mandate.
The legislation is the first of its kind in the United States. The bill can be accessed here.
The Maryland RPS stipulates that electricity suppliers (all utilities and competitive retail suppliers) use renewable energy sources to generate a minimum portion of their retail sales, to a level of 20% by 2022. Electricity suppliers demonstrate compliance with the standard by accumulating RECs.
Among many industry and agency stakeholders, the Geothermal Exchange Organization (GEO) lent support and written testimony that were crucial to the success of the measure. GEO is the national trade association for the GHP industry.
"Passage of the Maryland legislation is a huge success for the geothermal heat pump industry," said GEO President Doug Dougherty. "Maryland becomes the first state in the country to recognize GHPs as a renewable energy source giving electric utilities credit for the thermal load avoided. This will be instrumental in gaining increased utility support and promotion of GHP technologies."
In late-2011, GEO started work with the Maryland Energy Administration (MEA) to change the state's policy and legislation regarding GHPs. Following a stakeholders meeting in early December, MEA increased existing incentive caps for GHP installations from $1,000 to $3,000 for residential units, and $10,000 for commercial units.
MEA Geothermal Program Manager Doug Hinrichs noted several reasons for including GHPs in the Maryland RPS:
- More technology options to meet renewable energy procurement mandates;
- Reducing "first cost" of GHPs for home and business owners;
- Increasing local economic development (well drillers, heat pump installers, HVAC industry); and
- Reducing the use of conventional energy, including coal, nuclear and fuel oil.
In March 7 testimony supporting the Maryland legislation, Dougherty said that GHPs are the least-cost means of earning RECs, and are proven to avoid more retail electricity sales during utility peak load periods.
"In other words, utilities that harness this distributed, thermal renewable energy resource at a scale large enough to earn Renewable Energy Credits will also improve their annual load factors. Higher annual load factors provide a downward pressure on electricity prices," said Dougherty.