Maryland Governor Martin O’Malley signed the Renewable Energy Portfolio Standard - Geothermal Heating and Cooling bill (SB 652) into law, making Maryland the first state in the nation to allow utilities to claim credits for the installation of geothermal heat pumps (GHPs). The measure passed the state legislature on April 13.

The legislation makes GHPs an accepted technology for utilities to use toward earning Renewable Energy Credits (RECs) under the state’s Renewable Portfolio Standard (RPS).

Geothermal heat pumps address one of the biggest consumers of U.S. energy – buildings.  Buildings account for more than 70 percent of the nation’s electricity usage, and geothermal heat pumps have the potential to reduce energy use by as much as 40 percent to 70 percent in a typical building. 

On signing of the measure, GEO president Doug Dougherty says, “We applaud Governor O’Malley, the Maryland Energy Administration, the Maryland Public Utility Commission and the legislature for their collective vision in recognizing geothermal heat pumps as a renewable source of energy with the new GHP law.”

The Maryland RPS stipulates that electricity suppliers (utilities and competitive retail suppliers) use renewable sources of energy like wind, solar and biomass to generate a minimum portion of their retail sales, in annual percentage increments to a level of 20 percent by 2022.

Electricity suppliers demonstrate compliance with the RPS by accumulating RECs that are issued by the state for the renewable power they provide to their ratepayers. With the new law, GHPs offer yet another option for utilities to meet their renewable energy purchase requirements and earn RECs under the state’s RPS mandate.

Among many industry and agency stakeholders, the Geothermal Exchange Organization (GEO) lent support and written testimony that were crucial to the success of the measure. The Maryland GHP legislation is the first of its kind in the United States.

Maryland and regional government and industry stakeholders now are forming the Mid-Atlantic Geothermal Industry Consortium (MAGIC) to educate surrounding states about the value of GHPs a compliance measure for their renewable energy purchase requirements.

“GEO will use the Maryland GHP law as a model for the nearly 40 other states that have mandated Renewable Portfolio Standards,” Dougherty notes.