Legal Bulletins

The Maryland Utility RELIEF Act (HB 1532) passed on Tuesday, April 13, 20026. There’s a lot in this bill, let's focus on the NEM transition, particularly what it means for community solar projects under development.

The bill transitions from the current NEM program (NEM 1.0), which compensates behind the meter systems and community solar subscriptions at the full retail rate, to a successor program (NEM 2.0) that the General Assembly intends will provide lower compensation. The PSC must approve the NEM 2.0 framework by February 1, 2027, effective July 1, 2027. The combined capacity cap across both programs is 6,000 MW.

In the near term, the critical question for community solar developers is: how do projects under development grandfather into NEM 1.0? The path to NEM 1.0 grandfathering is clearly defined, but the clock is ticking.

Grandfathering into NEM 1.0

NEM 1.0 closes to new community solar projects effective July 1, 2027, or when the statewide 3,000 MW cap is hit, whichever comes first. But projects under development can still qualify if they meet two conditions by July 1, 2027: (1) the project holds a CSEGS program queue position, and (2) the developer has paid an initial interconnection deposit equal to 50% of the utility's estimated interconnection fees. Projects meeting those requirements must achieve COD by July 1, 2030.

For the DPL and PE territories, there’s a separate capacity limit: 150% of the combined rated generating capacity of CSEGS projects holding program queue positions (but not yet in service) as of April 1, 2026. If that cap is reached, the utility closes NEM 1.0 to CSEGS applications without queue positions.

Extension provisions

The PSC can extend both the July 1, 2027 queue position/deposit deadline and the July 1, 2030 COD deadline on a case-by-case basis where delays result from force majeure, government permitting delays, utility non-compliance, or where the system is waiting only on utility PTO. This extension ability is critical given widespread permitting and interconnection delays in Maryland.

Staying on NEM 1.0 until decommissioned

Qualifying projects (whether already on NEM as of July 1, 2027 or grandfathered) remain on NEM 1.0 until decommissioned (i.e., the full natural life of the project). NEM eligibility is lost earlier only if the system increases net power flow or AC output beyond its original interconnection, enters a new interconnection agreement, or is repowered.

Repowering is narrowly defined to mean replacement of more than 80% of the DC nameplate capacity of the PV modules originally placed in service. The definition carves out routine maintenance and repair (including replacement with similar or improved equipment), site maintenance, defect and casualty damage remediation, and replacements required by a governmental authority or utility.

Community solar developers with projects in Maryland should be taking stock of their pipelines now.

For more information or questions, contact David W. Beugelmans.

David W. Beugelmans 
410-576-4104 • dbeugelmans@gfrlaw.com