Maryland Governor Martin O’Malley (D) faces a long hard trail to the White House in 2016. As a small-state executive who led during hard times, he has few signature initiatives to sell nationally. Perhaps the only policy arena where he can truly point to a lasting achievement is the environment. He should redouble his efforts to make Maryland a renewable energy leader—for a better climate, better public health, and better jobs. The Governor can burnish his green legacy with one last burst of initiative on behalf of the solar industry.
The Maryland solar industry has prospered under Gov. O’Malley’s watch. His pro-solar administration has been a catalyst to this growth. In 2011, nearly one thousand solar PV systems were installed in Maryland, representing 21.6 MW of solar energy capacity. The Old Line State ranks 8th in the country in number of solar systems installed, above the states of Florida and Hawaii. There are currently more than one hundred solar-related businesses operating in the state, from installers to consultants. The Maryland Energy Administration’s (MEA) residential and commercial solar grant has helped thousands of middle-class families and small businesses afford the high up-front cost of a solar PV system. The state’s Solar Renewable Energy Credit (SREC) program has rewarded families and businesses with annual dividends for their environmental stewardship.
To reaffirm his bona fides as a green energy advocate, Gov. O’Malley should address the soft costs of solar as well as the up-front installation bills. The administrative cost of going solar in Maryland is high enough to discourage even the heartiest of green advocates. The MEA application for solar grants is laden with software glitches and typos. It often takes months to amass all necessary documentation. The Maryland Public Service Commission’s SREC application adds an additional paperwork burden for every new solar customer. If a solar system owner lives in a certain county, they may be eligible for a county property tax credit, too—adding a third form to their paperwork. This trio of applications, each submitted to a different destination, each duplicating multiple fields and supporting documentation, can be improved.
Gov. O’Malley prides his executive office on efficiency and accountability—those imperatives are symbolized by the StateStat initiative. His staff has tried to emulate the Mark R. Warner gubernatorial administration in Virginia, a paragon of results-based efficiency. The waste and inefficiency of the state’s solar incentive structure should concern the O’Malley administration. Centralization of state solar grants, property tax incentives, and SRECS within the office of MEA would drastically reduce the administrative cost of going solar. StateStat should target the bureaucratic snafu in the state solar incentives structure.
At the federal level, energy policy managers are cutting the soft cost of solar because they recognize its impact. In 2011, U.S. Energy Secretary Steven Chu unveiled the SunShot initiative, aimed at lessening the burden of solar paperwork required for incentives, permitting, and arranging a grid connection. The Department of Energy estimated that administrative burden constituted 40 to 50 percent of the total cost of owning and operating a rooftop solar system. Non-module costs of solar have not declined as much as module prices in recent years; the Solar Energy Industries Association identifies these secondary costs, including paperwork costs, as a “significant opportunity for continued price reduction.”
Reducing the administrative barrier for incentives would stimulate the Maryland solar market by speeding up the payback for solar system owners. It would allow the MEA to accomplish more with less. It would encourage old solar customers to refer friends. It would boost morale, too, for solar businesses and their partners in state government. Paperwork reform would surprise green energy CEOs who are accustomed to being ignored by regulators.
Germany, the world’s largest solar market, has long enjoyed the benefits of light bureaucracy in its renewable sector. The country added a record number of panels last year after cutting subsidies, thanks in part to the low administrative burden for solar incentives. Historically, dozens of American politicians, from Florida Democratic Governor Lawton Chiles to Republican president Ronald Reagan, have won popular affection by inveighing against bureaucratic burden.
Gov. O’Malley has probably attacked waste in every government sector besides the environment. He should seize the opportunity to centralize solar incentives and cement his legacy as a solar champion and a green economy leader. “Solar energy means Maryland jobs,” he said recently. “There will be a day when solar panels will be as common as shingles on roofs.” A solar revolution could also help secure his political future.