Author: MD DOE Staff Published: 8/17/2026 Maryland Department of Energy
Maryland Energy Administration
Due to a significant shortfall in available SRECs, ACPs accounted for a significant portion ($86.6 million) of the total $438.8 million RPS compliance costs in 2022.
Maryland’s Renewable Portfolio Standard (RPS) requires utilities to source a growing share of electricity from renewable sources, including a solar carve‑out mandating 14.5% of energy to come from instate solar by 2028.
Because of permitting delays, land costs, and PJM interconnection queue issues, the supply of Maryland‑specific solar generation has not kept pace with demand, driving up the market value of Maryland Solar Renewable Energy Certificates (SRECs) kilowattlogic.com.
To comply, retail electricity suppliers must either buy SRECs or pay Alternative Compliance Payment (ACP). The ACP schedule for 2025 is set at $1,000 per megawatt‑hour (MWh) psc.maryland.gov. This cost is embedded into the fixed‑price contracts offered to residential and commercial customers.
For a typical Maryland household, the pass‑through is calculated as:
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- ACP rate: $1,000 / MWh
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- Average residential annual usage: ~12,000 kWh/year
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- Annualized ACP cost: $1,000 × (12,000 kWh ÷ 1,000 kWh/MWh) = $12,000/year
This $12,000 figure is the total ACP cost for a household, not a per‑kWh surcharge. In practice, the ACP is spread across the customer’s electricity bill over the contract term, so the effective per‑kWh adder is roughly $0.83/kWh (12,000 ÷ 12,000) kilowattlogic.com.
Key points:
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- The $1,000/MWh ACP is the statutory cost for non‑compliance; utilities pass it on to customers if they cannot meet the RPS via cheaper renewable sources psc.maryland.gov.
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- The $0.83/kWh adder is the estimated per‑unit impact on a typical residential bill.
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- The actual amount a household pays depends on their usage, contract terms, and whether the supplier has “carved out” compliance costs to present a lower energy price.
In summary: In 2025, Maryland RPS pass‑through costs for MD residents were effectively about $0.83 per kWh (or roughly $12,000/year for an average household) due to the $1,000/MWh ACP kilowattlogic.com+1.
Maryland RPS Solar Carve-Out Cost Impact 2026 | KilowattLogic
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RENEWABLE ENERGY PORTFOLIO STANDARD – psc.maryland.gov
INTRODUCTION This document constitutes the annual report of the Public Service Commission of Maryland (Commission) …
PUBLIC SERVICE COMMISSION OF MARYLAND RENEWABLE ENERGY
PORTFOLIO STANDARD REPORT
With Data for Calendar Year 2022
In compliance with §7-712 of the Public Utilities Article, Annotated Code of Maryland
Table 5 Total Cost of RECs per Year (2017 – 2022)
Table 4 Average Cost of RECs per Tier (2008 – 2022) Year Tier 1 Non-Solar Tier 1 Solar Tier 2 2008 $0.94 $345.45 $0.56 2009 $0.96 $345.28 $0.43 2010 $0.99 $328.57 $0.38 2011 $2.02 $278.26 $0.45 2012 $3.19 $201.92 $0.44 2013 $6.70 $159.71 $1.81 2014 $11.64 $144.06 $1.81 2015 $13.87 $130.39 $1.71 2016 $12.22 $110.63 $0.96 2017 $7.14 $38.18 $0.48
2018 $6.54 $31.91 $0.66 2019 $7.77 $47.26 $1.05 2020 $8.24 $66.10 $1.06 2021 $14.36 $72.59 $6.45 2022 $17.80 $57.80 $7.42
As demonstrated by Table 5, the aggregated cost of compliance with the Maryland RPS Program in 2022 displays a moderate decline from 2021. While costs had been moderately increasing with time, a spike in prices occurred in 2021. This was driven in part by an increase in the requirement for retired Solar RECs, resulting in large quantities of ACPs needing to be purchased.
Despite an increase in compliance costs for Tier 1 and Tier 2 RECs in 2022, with fewer Solar RECs being required to be retired, the overall cost of compliance was reduced.
9 | Page Table 5 Total Cost of RECs per Year (2017 – 2022) Tier 2017 2018 2019 2020 2021
2022 Total REC Costs Tier 1 $50,045,621 $56,406,247 $79,320,505 $99,836,127 $187,346,301 $246,480,883 Solar $21,275,664 $27,351,388 $55,166,116 $122,943,987 $144,411,601 $101,384,663 Tier 2 $687,785 $1,049,293 $58,899 $386,590 $959,225 $4,382,570 ACPs $55,032 $67,796 $7,730,223 $52,240 $77,129,013 $86,584,883
Total $72,064,102 $84,874,724 $142,275,743 $223,218,944 $409,846,140 $438,832,999 Total
RECs Retired Tier 1 7,006,113 8,627,737 10,210,275 12,117,585 13,045,432 13,849,611 Solar 557,224 857,232 1,167,329 1,859,976 1,989,505 1,753,987 Tier 2 1,448,567 1,599,819 55,879 366,260 148,702 590,330
Total 9,011,904 11,084,788 11,433,483 14,343,821 15,183,639 16,193,928 RPS
% Required Tier 1 11.95% 14.30% 15.20% 22.00% 23.30% 24.60% Solar 1.15% 1.50% 5.50% 6.00% 7.50% 5.50% Tier 2 2.50% 2.50% 2.50% 2.50% 2.50% 2.50% Total 15.60% 18.30% 23.20% 30.50% 33.30% 32.60%
Due to a significant shortfall in available SRECs, ACPs accounted for a significant portion ($86.6 million) of the total $438.8 million RPS compliance costs in 2022.
Prior to 2021, reliance on ACPs had been limited.
Table 6 Results of the 2022 RPS Compliance Reports
RPS Compliance Year Tier 1 Non-Solar Tier 1 Solar Tier 1 IPL Tier 2 Total 2022 RPS Obligation 13,796,451 3,181,323 0 592,758 17,570,532
Retired RECs 13,849,611 1,753,987 0 590,330 16,193,928 ACP
Required $677,490 $85,859,393 $0 $48,000 $86,584,883 Note: Some electricity suppliers retired more RECs than required.
RECs are valid to demonstrate RPS compliance for the calendar year in which they were generated and in the following two calendar years.
20 Figure 1 aggregates the Maryland RPS tiers on the basis of generation year. For the 2022 compliance year, 55.0 percent of RECs retired were generated in 2022; 32.6 percent were generated in 2021; and the remaining 12.5 percent were generated in 2020.
This data conveys that RECs are in high demand as they are most often retired in the year of their generation. 20 COMAR 20.61.03.01C (unless the REC is diminished or extinguished before expiration
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Maryland RPS Solar Carve-Out Cost Impact 2026 | KilowattLogic
Feb 22, 2026 · Some aggressive retail suppliers strip RPS and SREC costs out of their initial “Fixed Pr