If you own a home with solar panels in Maryland, your system is already working hard to lower your monthly electricity bills. But thanks to Maryland’s Net Metering Flexibility Act (Senate Bill 143), homeowners now have a powerful new tool to maximize the financial return on their solar investment.
By understanding how your electric company handles your excess energy, you can stop leaving money on the table and keep the full value of the power your roof generates.
How Net Metering Works
Most solar setups in Maryland are tied to the grid using a system called net metering.
Think of the grid as a giant battery. During a sunny summer day, your panels will produce more energy than your home is currently using. Instead of wasting that power, your system sends it backward into the grid. For every kilowatt-hour (kWh) you send to the grid, you get a 1:1 credit to “pull” a kilowatt-hour back from the grid when the sun goes down.
This 1:1 exchange is advantageous for two reasons:
- Daily Balance: You can overproduce during the day and use those credits to power your home at night.
- Seasonal Balance: You can build up a surplus of kWh credits during the long, sunny summer months to carry your home through the shorter, cloudier days of winter.
The Annual April True-Up
Every April, utility companies (like BGE, PEPCO, Potomac Edison, or SMECO) would look at your account. If you had a positive balance of unused kWh credits, they would “settle up.” They would reset your kWh balance to zero and credit your account with a dollar value for your excess energy.
The problem? The payout wasn’t 1:1.
When you buy electricity from the utility, you pay the retail rate, which includes both the cost to generate the energy (commodity) and the cost to deliver it to your house (distribution). However, during the April true-up, the utility only pays you the commodity rate (The exact payout varies slightly by utility. To confirm the exact payout, refer to your utility’s specific rate structure).
Here is how that math hurts your wallet:
- Retail Rate (What you pay): ~$0.16 to $0.23 per kWh (depending on utility and usage)
- True-Up Payout (What they pay you): ~$0.08 to $0.14 per kWh
By forcing an annual cash-out, the utility effectively slashed the value of your stored energy almost in half, pocketing the distribution fees you avoided.
The Game Changer: Indefinite Rollover
The Net Metering Flexibility Act changes the rules in favor of the homeowner. You now have the right to opt out of the April true-up and choose indefinite rollover, also known as the indefinite accrual of net excess generation.
Instead of being forced to cash out your credits at the lower commodity rate, your excess kWh credits simply stay in your account forever, retaining their full retail value against future energy use.
| Feature: | April True-Up (Default): | Indefinite Rollover (The New Act) |
|---|---|---|
| Credit Value | Drops to commodity rate (~$0.08–$0.14/kWh) | Remains at full retail rate (~$0.16–$0.23/kWh) |
| Credit Lifespan | Cashed out and reset annually in April | Rolls over month-to-month indefinitely |
| Best For… | Those who want a small, annual cash rebate check | Maximizing long-term utility bill savings |
The Potomac Edison Case Study
Let’s consider a real-world scenario for a residential system in the Potomac Edison service area. Currently, Potomac Edison pays out roughly $0.08 per kWh for excess generation during an annual true-up.
- System Production: 28,000 kWh per year
- Household Consumption/Usage: 20,000 kWh per year
- Excess Generation: 8,000 kWh (28,000 – 20,000)
Scenario A: The April True-Up
If you stay on the default plan, your 8,000 extra kWh are converted to a cash credit at the lower commodity rate in April:
- 8,000 kWh × $0.08 = $640
This $640 is applied as a flat credit to your electric account, and your energy bank is wiped down to zero.
Scenario B: Indefinite Rollover
If you opt into indefinite rollover, those 8,000 kWh stay in your account as energy credits. You can apply them toward future electricity usage at the highly advantageous 1:1 retail rate.
Let’s say you draw on those credits a few years down the line. If the cost of electricity in Potomac Edison is $0.18 per kWh:
- 8,000 kWh × $0.18 = $1,440 saved
By simply changing your account settings, you preserved $800 in value!
The Hidden Benefit: Insulating Against Rate Hikes
There is another massive advantage to indefinite rollover: inflation protection.
Over the last few years, Maryland utility customers have faced consistent rate increases. When you take the April True-Up, you are locked into a fixed cash amount. That $640 payout will only ever be $640, and as electricity prices rise, that $640 buys you less and less power.
However, when you roll over your credits as kilowatt-hours, their financial value grows alongside utility rates. If the cost of electricity jumps to $0.22/kWh in the future, your banked 8,000 kWh are suddenly worth $1,760. By banking energy instead of cash, you effectively freeze your electricity costs and insulate your household from future utility rate hikes.
How to Opt-In
Because utilities benefit from the April true-up, indefinite rollover is not automatic, you must actively choose it. See below on how to make the switch:
- Baltimore Gas and Electric (BGE)
- Submit online form to gpcteam@bge.com, reach out via online form, or call 1-800-685-0123.
- Important Links:
- Potomac Electric Power Company (PEPCO)
- Submit online form to gpcbillingmailbox@pepcoholdings.com or call 1-800-424-8028.
- Important Links:
- Potomac Edison Company (PE)
- Submit online form to suppliersupport@firstenergycorp.com, change via online portal, or call 1-800-686-0011.
- Important Links:
Don’t See Your Utility Listed?
Unfortunately, the Net Metering Flexibility Act does not apply universally to every single power provider in the state. The law explicitly exempts certain types of utility models from being forced to offer indefinite rollover:
- Municipal Electric Utilities: City-owned electric utilities (like Hagerstown Light Department or Thurmont Municipal Light).
- Electric Cooperatives: Member-owned cooperative utilities.
Because of these exemptions, many Maryland cooperatives, such as SMECO (Southern Maryland Electric Cooperative), Choptank Electric Cooperative, and A&N Electric Cooperative, are not legally required to participate. For these providers, the decision to offer an indefinite rollover option is entirely voluntary.
FAQs
| Question: | Answer: |
|---|---|
| I consistently overproduce energy. Should I switch? | Yes. Homeowners who consistently generate more power than they use will see the most financial benefit. By opting for indefinite rollover, you stop selling your power back to the utility at a discount and start treating your grid connection like a long-term energy savings account. |
| I underproduce (I buy more from the grid than I make). Should I switch? | Yes, you still should. There is no penalty for switching. If you don’t overproduce, you simply won’t have a surplus when April rolls around, making the true-up process irrelevant anyway. However, if you ever reduce your usage or increase production (install energy-efficient windows, upgrade your insulation, or add more panels later), you will already be set up to capture 100% of the value of your new excess generation. No harm, no foul. |
| What happens to my banked credits if I sell my home or move? | You get cashed out. Your accrued credits do not simply disappear when you leave. According to the law, the electric company is required to pay you for any remaining accrued net excess generation within 15 days after your account is closed. |
| Is there a limit to how many credits I can bank over time? | No, but there is a limit on system size. While your energy credits can stack up indefinitely under the new rollover rules, Maryland state law restricts how large your residential solar system can be. Your system’s generating capacity cannot be built to exceed 200% of your home’s historical baseline annual electricity usage. |
| If I switch to indefinite rollover, does it mess up my SRECs? | Not at all. The Net Metering Flexibility Act only deals with how the utility credits your monthly electric bill. If you own your solar panels, you will still separately earn one SREC for every 1,000 kilowatt-hours of power your system produces. Your SREC income remains completely untouched and functions exactly as it did before. |
Take Control of Your Solar Investment
Maryland’s Net Metering Flexibility Act represents a shift in favor of clean energy producers. Instead of letting the utility companies buy back your hard-earned summer electricity at a discount, you now have the legal right to bank that energy at its full retail value forever.
Whether your goal is to insulate your household against inevitable utility rate hikes, prepare for an upcoming electric vehicle, or simply extract every single dollar of value out of your solar installation, opting into indefinite rollover is the smartest financial move you can make.
Don’t let your utility company wipe your energy credit balance clean. Take a look at your most recent electric bill, determine your provider’s specific opt-in deadline, and make the switch today.