Marylanders exhaust solar, geothermal grants

Incentives made available for year gone in a month

July 26, 2008|By Laura Smitherman | Laura Smitherman,Sun reporter

Electricity prices were going up, environmentalism was in, and solar power companies were proliferating. But last year Maryland residents still didn't take the state up on all the financial incentives it offered for installing "green" power systems in their homes.

This year, however, Maryland residents flooded the state program with applications for grants to build solar and geothermal systems to help defray utility costs. Within a few weeks, more than $590,000 - all of the money available for the fiscal year that began this month - had been doled out.

State officials say the turnaround in demand was prompted by an increase in the grant amounts approved by the General Assembly during the winter session. Lawmakers raised grant amounts for systems that convert sunlight into electricity to as much as $10,000, up from $3,000, and tripled the amount residents could get for geothermal systems, which rely on the Earth's temperature to provide heating and cooling. Those grants are now as much as $3,000.

"In prior years, there wasn't enough of an incentive to enable people to justify the investment," said Malcolm Woolf, director of the Maryland Energy Administration. "When the new grant window opened, we got flooded with applicants in a way that's never happened before."

For the first time in the program's five-year history, there is a waiting list of dozens of residents seeking grants. While new funding will not be appropriated by state lawmakers until the next fiscal year, which begins in July 2009, state officials hope to be able to direct money to the program from the recently enacted Regional Greenhouse Gas Initiative.

Cap and trade

The program establishes a cap-and-trade system in which industrial businesses would buy pollution credits through auctions. State officials estimate that it could generate $140 million a year. About 10 percent of those proceeds could be used to supplement the program, Woolf said. The first auction is scheduled for September.

With federal tax credits and state grants, homeowners could nearly halve the price of the typical solar-panel system, which costs less than $30,000. Such a system could reduce a homeowner's electricity bill by up to a third.

Madeleine Arnheim of Easton said that with the state incentives, it made financial sense for her and her husband to install a solar panel system while renovating their home. The fact that they could reduce their electric bill, which totaled $500 this month, made the idea all the more attractive.

And, Arnheim said, they try to be environmentally friendly by recycling and using energy-efficient lightbulbs because they want to leave a better world to their seven grandchildren.

"We thought, 'Why not go one step further?'" she said. "It's going to be very exciting to see what it does - I plan on standing out there watching the electric meter go backward. But it's also something that's good for the future and the environment."

More needed

Environmentalists have applauded the state and federal help for homeowners, but they say more money needs to be allocated.

Not only has Maryland's program exhausted its funding, but some federal incentives are also scheduled to expire at the end of this year.

Gov. Martin O'Malley and the other governors signed a letter this week to congressional leaders asking them to extend for at least five years tax provisions that encourage the development of renewable energy and promote energy efficiency.

'Limited' program

Brad Heavner, director of Environment Maryland, said that while the higher grants are making it feasible for homeowners to install the solar and geothermal systems, the lack of funding has diminished the progress. "Now the program is effective but limited," he said.

State officials note that funding is still available for the so-called Windswept program, which provides grants of up to $10,000 to offset the cost of small wind turbines for residents in certain locations.

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