Skip Navigation

The U.S. Department of Energy and the North Carolina Solar Center are excited to announce that a new, modernized DSIRE is under construction. The new version of DSIRE will offer significant improvements over the current version, including expanded data accessibility and an array of new tools for site users. The new DSIRE site will be available in the summer of 2014. Staff are currently working hard on the new DSIRE and are unfortunately only able to make minimal updates to the DSIRE website at this time. We apologize for any inconvenience and thank you for using DSIRE.

US Department Energy Efficiency and Renewable Energy
IREC North Carolina Solar Center
Home Glossary Links FAQs Contact About Twitter    Facebook
Maryland

Maryland

Incentives/Policies for Energy Efficiency

Printable Version
Local Option - Clean Energy Loan Program   

Last DSIRE Review: 07/09/2014
Program Overview:
State: Maryland
Incentive Type: PACE Financing
Eligible Efficiency Technologies: Locally determined
Eligible Renewable/Other Technologies: Locally determined
Applicable Sectors: Commercial, Residential, Low-Income Residential
Terms:Maximum financing amount locally determined
Authority 1:
Date Enacted:
Date Effective:
MD Political Subdivisions Miscellaneous Provisions §9–1501 et seq.
05/19/2009
10/01/2009
Summary:

Note: Beginning October 1st, 2014 local clean energy loan programs dormant since July 2010 can be reactivated based upon a provision in HB 202 that provides governments the option to collect on a property owner’s clean energy loan via surcharges on property tax bills.

 

Property-Assessed Clean Energy (PACE) financing effectively allows property owners to borrow money to pay for energy improvements. The amount borrowed is typically repaid via a special assessment on the property over a period of years. Maryland has authorized local governments to establish such programs, as described below. (Not all local governments in Maryland offer PACE financing; contact your local government to find out if it has established a PACE financing program.)

 

In May 2009, Maryland enacted legislation permitting counties and municipal corporations to adopt resolutions or ordinances establishing clean energy loan programs based on the "PACE" model. The legislation includes provisions permitting local governments to issue bonds to fund such financing programs. If adopted by a local governing body, the program allows local property owners to opt in to a renewable energy or eligible energy-efficiency loan program and repay the loan through a surcharge on their property tax bill. The surcharge remains attached to the property upon a change in ownership and is limited to the amount needed to recover costs associated with issuing bonds, financing the loans, and administering the program.

The authorizing legislation describes a series of details that must be included in the local legislation implementing such financing programs, although specific details are largely left at the discretion of the local government. Local governments may generally specify property owner eligibility, eligible improvements or technologies, and loan terms and conditions. However, the state legislation specifically prohibits commercial renewable energy projects larger than 100 kilowatts from participating in local clean energy loan programs. In addition, it dictates that local eligibility requirements for property owners address their ability to repay a loan through a process similar to mortgage loan approval. For a bond issuance, the local government may specify the principal amount, interest rate/variable rate, terms of sale, payment intervals, conditions for redemption before maturity, and other details as necessary. Bonds (serial or term) issued under this provision must mature no later than 40 years after their issue date.

 

The Federal Housing Financing Agency (FHFA) issued a statement in July 2010 concerning the senior lien status associated with most PACE programs. In response to the FHFA statement, most local PACE programs have been suspended until further clarification is provided. 

 

To address FHFA concerns, the Maryland legislature passed HB 202 that grants local governments the power to enact a surcharge on a clean energy system owner’s property tax bill to recover the cost associated with financing the loan and administering the loan program. Unpaid surcharges become liens on the property until paid. The bill also gives local authorities greater leeway work with private lenders to make loans to property owners under a local loan program.

HB 202 effectively allows local governments to re-start their PACE financing programs on October 1st, 2014.

NCSU - home
Disclaimer: The information presented on the DSIRE web site provides an unofficial overview of financial incentives and other policies. It does not constitute professional tax advice or other professional financial guidance, and it should not be used as the only source of information when making purchasing decisions, investment decisions or tax decisions, or when executing other binding agreements. Please refer to the individual contact provided below each summary to verify that a specific financial incentive or other policy applies to your project.

While the DSIRE staff strives to provide the best information possible, the DSIRE staff, the N.C. Solar Center, N.C. State University and the Interstate Renewable Energy Council, Inc. make no representations or warranties, either express or implied, concerning the accuracy, completeness, reliability or suitability of the information. The DSIRE staff, the N.C. Solar Center, N.C. State University and the Interstate Renewable Energy Council, Inc. disclaim all liability of any kind arising out of your use or misuse of the information contained or referenced on DSIRE Web pages.

Copyright 2013 - 2014 North Carolina State University, under NREL Subcontract No. XEU-0-99515-01. Permission granted only for personal or educational use, or for use by or on behalf of the U.S. government. North Carolina State University prohibits the unauthorized display, reproduction, sale, and/or distribution of all or portions of the content of the Database of State Incentives for Renewables and Efficiency (DSIRE) without prior, written consent.