Maryland Finds a Way to Build Big Solar

In a recent joint announcement, Constellation Energy Group and Mount St. Mary’s University of Emmitsburg, MD described plans for what could become the nation’s third largest photovoltaic power plant.  The project serves as an example of the level of solar deployment that can be achieved with a favorable climate of incentives from state and federal sources.

part of  Mount St. Mary’s campus 

Clean Horizons

The project is being developed under Maryland’s Generating Clean Horizons initiative, which was launched a year ago to spur the development of large-scale commercial renewable energy projects.   The initiative specifically calls for projects that encompass long-term power purchase agreements (PPA), under which customers would agree to purchase power at a price that is fixed, or that increments per an agreed schedule, over an extended term (in this case, twenty years).   

Constellation Energy will build, own and operate the 17.1-megawatt DC, $60-million solar farm on 100 acres of Mount St. Mary’s 1400-acre campus.  The university will receive income from leasing the land and will purchase 1.2 megawatts of electricity from the facility.  The rest of the power will be sold to University System of Maryland under a similar PPA.

Constellation Energy is a traditional, not a renewables-only, energy company.  It supplies wholesale and retail markets, and includes nuclear, natural gas and coal in its portfolio.  But it has made commitments, recently, to energy efficiency and clean energy projects in its home state of Maryland.  It has agreed to develop a $140-million, 70-megawatt wind energy project in Garrett County and recently completed construction of a $1-billion air quality scrubber at its Brandon Shores power plant.  Baltimore Gas and Electric, the company’s regulated utility in Central Maryland, announced that it has received federal matching dollars to develop an advanced Smart Grid system.  And the company has developed some 10 megawatts of PV systems in Maryland to date, so it is no stranger to clean energy development.

Thomas H. Powell, president of Mount St. Mary’s, which offers a minor in environmental studies, said about the project:  “Our students will be on the forefront of responsible land use and creation of renewable energy resources.  Frederick County will benefit not only from our generation of clean energy but also from the reduction of dependence on more traditional use of coal, natural gas and fossil fuels. “

Besides the Mount St. Mary’s installation, Maryland’s Generating Clean Horizons program has resulted in awards to two 55-megawatt wind farms, one onshore and one offshore, and a separate 10-megawatt project under a small business provision.

Why PPAs?

The use of long-term PPAs for government entities such as state universities is a useful way of lowering costs for these bodies, which aren’t able to take advantage of tax-based incentives.  The 30% federal investment tax credit is enjoyed by the private entity that builds, owns and operates the facility—Constellation Energy.  So Constellation’s motivation may be, in large part, to reduce its tax liability, but the net effect is large-scale deployment of solar faster than might be achieved without the PPA mechanism.  Most importantly, if PPAs were to be extended to state and federal government departments throughout the country, we could see an explosion of clean energy projects nationwide.