Massachusetts’ previous Governor, Deval Patrick, had set a target for 1,600 megawatts (MW) of solar power in Massachusetts by 2020. We are currently at about 86MW. However, there is currently a restriction on installing any new solar power systems in Massachusetts that are over 10kW, which is the size of a system that can power an average home. Therefore, no new large systems can be installed for businesses, municipalities, or community solar farms, where multiple homes share one common system. As a result, it will be difficult to reach the target of 1,600MW of solar with just small roof top residential systems and no new large solar systems. To make matters worse, the federal ITC 30% tax credit is due to expire at the end of 2016, which is expected to further reduce installations of clean solar energy. Change is needed, and quickly.
Two weeks after the Massachusetts Senate passed an amendment to a climate change bill that would raise the net metering limit on solar electric systems over 10kW, Governor Baker filed a bill that would also raise the cap on solar systems, enabling an increase to the number of mid- to large- sized solar electric installations in Massachusetts. In An Act Relative to a Long-Term, Sustainable Solar Industry, the Baker administration addressed both immediate and long term concerns. The House has been working on a “comprehensive energy bill” that should also address the net metering cap.
There are some similarities between the Senate’s Amendment 18 to Bill S. 1973, approved on July 23, 2015, and the governor’s bill, proposed August 7, but also some major differences that will need to be resolved when the legislature comes back to their Fall session in September. The goal is to satisfy the need to quickly raise the cap to allow the larger projects to get started, but also create a fair system where non-solar electric customers do not have to pay more than their share.
Both bills will immediately raise the net metering cap, allowing projects to start with enough time to complete by the December 31, 2016 deadline for the federal tax credit, but the Senate’s plan raises the cap to the target of 1,600MW, basically doubling today’s cap, while the governor’s plan raises it by about 445MW; almost half of the Senate’s plan.
The bills also require Massachusetts’ Department of Energy Resources (DOER) to create a new incentive program to replace the existing SREC program once the 1,600MW target is reached, thus addressing longer term needs.
Where the plans differ greatly is the amount that the solar owner will get for net metering credits. Credits come from making more power than you use in a month. Since you’ll be making more solar electricity in the Summer than in the Winter, if you make more power than you use in July, you can carry the credits over to the less sunny months, and use the credit from extra power in December.There is no change for systems under 10kW, for low income housing projects, and municipalities, but for larger commercial systems, if you make more power than you use in a month, the credit for the extra power will be a fraction of what you pay for power. For example, if you pay $0.18 per kWh for electricity and are not a commercial system, you get a credit for $0.18 per kWh for extra. But if you are a commercial system, you will get wholesale pricing, which could be around $0.04 per kWh. This makes the economics of the system very unfavorable.
Power sent into the grid has benefit to the electric company. It helps handle peak load during the day, especially during the Summer when air conditioning loads are peaking, thus eliminating the need to build more fossil fuel power plants. Research has shown that the benefits to the utilities and customer that distributed solar generation brings, far exceeds the wholesale price. Some have shown that it even beats the retail price currently paid. This means that credits given to solar electricity producers are not taking money from non-solar ratepayers and giving it to solar owners. It is actually saving all ratepayers money, because the money the solar electricity is saving the electric company should be passed on to ratepayers as savings.
Hopefully all of these plans can be worked out in the Fall to create a program that allows Massachusetts to be one of the top solar states in the country, and continue to provide clean energy in an industry that employs over 10,000 people in the state. We urge you to contact your local Legislator and express your support for raising the net metering cap. You can find your Legislator at https://malegislature.gov/People/Search.