Members have been asking questions about community solar and the possibility of bringing that option to Southern Maryland. The cooperative has a responsibility to evaluate opportunities and initiatives and actively protect our members’ interests. We take that seriously.
When community solar was first introduced more than a decade ago, it was still being developed, and the cooperative determined that moving forward at that time would have put an undue burden on overall cooperative membership. We have continued to evaluate the program as it has evolved and at this time, the cooperative’s responsibility is to evaluate new programs not only for participants, but for every member who owns SMECO. We believe the current credit calculation would shift costs to members who do not participate, and we do not believe that is equitable.
SMECO has a long history of supporting renewable energy initiatives, including solar. We have a longer history of working to serve every member fairly across our service territory.
As a not-for-profit electric cooperative owned by our members, our responsibility is to ensure member funds are used to benefit the membership as a whole. We do not believe the current community solar framework fairly allocates costs among all members. It has taken more than a decade for the state to develop the community solar regulations and framework. Implementing community solar at SMECO would require new billing systems and upgrades, regulatory guidance, hiring additional staff, and developing a tariff to be considered at the Maryland Public Service Commission (PSC). All of these actions take time and cost money that would be recovered from our members.
A brief history
In 2015, the General Assembly established a pilot program for community solar. After deliberation in Annapolis, the pilot was limited to Investor-Owned Utilities (IOUs).
Electric cooperatives, like SMECO and municipal utilities, were not required to participate for several reasons, with the main reason being that we are not-for-profit entities with smaller customer bases.
- Our members bear the burden of increased costs from mandated new programs.
- We have smaller staff to implement and administer new programs.
- At the time, we did not know how the community solar credits would be calculated.
SMECO actively considered adopting a community solar program. Community solar allows customers who may not own their property, who choose not to install solar panels on their home or property, to participate in renewable energy. The concept is straightforward. A solar developer can build a facility in one part of a utility’s service territory and subscribers elsewhere can purchase a share of that facility’s output and receive a credit on their monthly utility bill.
The cooperative believes the credit calculation is unfair to our members as a whole. Community solar credits are treated the same as a typical net metering credit, where a customer would install solar panels in their back yard or roof and offset their home’s usage. Under a community solar arrangement, solar power is generated in one area, and a customer miles away can subscribe to it and receive credit.
With net metering, a customer receives credit for energy produced and the costs to distribute that energy. Community solar uses the same electric distribution infrastructure that all customers pay for. Members who do not subscribe to community solar should not bear a disproportionate share of the distribution costs to maintain our electric grid. This cross-subsidization at a time when infrastructure costs are at an all-time high is not appropriate.
SMECO is not anti-solar. On the contrary, SMECO has a long history of supporting solar initiatives.
- The cooperative has a 5.5 MW solar farm in Hughesville and has long-term power purchase agreements with other solar facilities.
- We adhere to the state’s Renewable Energy Portfolio mandates for solar, wind, and other green resources.
- SMECO has worked with hundreds of members to facilitate their solar interconnection requests to meet tax credit deadlines and other hurdles.
- We have worked in tandem with farmers who installed solar on their property and offset the usage of homes, irrigation systems, and outbuildings on the farm through aggregate net metering.
If you have any additional questions, please email info@smeco.coop.