15,000 solar jobs, $600MM in salaries at risk in Massachusetts
Time to look at the wider benefits of solar to the MA economy
The solar industry in Massachusetts has been cranking away for nearly a decade and is on the verge of grinding to a halt. With solar’s future hanging in the balance, we should examine what the wider benefits of solar have been for the state.
The State’s main utilities, National Grid and Eversource, enjoy the monopolistic power in the territories that they control, and as such, whatever the price of electricity, they will ALWAYS make a profit. But what happens to the money that their customers pay them every month could have wider implications for the State’s economy.
Three scenarios for solar in the state’s future.
In the “do nothing” scenario, where solar is left to flounder, we’re going to see 15,000 people leaving the work force. Some may continue to reside in Massachusetts and pursue opportunities that demand their skills in neighboring States, like Rhode Island, Connecticut, and, most likely, New York. Others might have to move out of State in search of opportunities as far away as California. And others will need to leave the work force to re-train for a new industry altogether.
In that scenario, Massachusetts loses out. We lose workers, we lose renters, we lose customers, and we lose tax payers. These are respected jobs – electricians, carpenters, engineers – these are the people and skills we want in our state. A recent study found that the state has at least 15,000 employed by the solar industry, and those people earn at least $600 million annually. The broader energy efficiency industry has almost 100,000 employees – this is a full 2.5% of our Massachusetts workforce.
And note that the cascading effect of money in the economy – $600 million in lost payroll will likely have a ripple effect. Less people buying groceries means stores need fewer products on the shelves, fewer employees to help customers, and smaller deliveries from distributors. Economists have a term called ‘velocity of money’ – this describes how many times that $1 you spend will move through the economy. When a regular person spends $1 on food, or with an electrician, or fixing their car – that same dollar will be spent by vendors and suppliers further up the chain. That $600M loss will actually be closer to a $1.5B dollar loss to our economy.
Also in that scenario, Massachusetts rate payers will continue to struggle under the burden of some of the most expensive electric rates in the country. After meeting payroll, paying taxes, and, yes, reinvesting in repairs to our State’s aging infrastructure, lets ask, where does the rest of that money go? Out of state – and in the case of National Grid, out of country – and to their shareholders.
In the “do something” scenario, the solar sector of Massachusetts’ economy can continue to thrive. What it needs is movement in the states net-metering caps, to allow for larger-scale solar farms, which could be owned by the many residents who don’t have rooftops adequate for solar. This can be for any number of reasons – from tree cover or other rooftop obstructions, to the many condo dwellers whose HOA’s disallow on-premisis solar.
With the Pilgrim Nuclear Power Station scheduled to shutdown in a few years, the State is going to lose it’s biggest carbon-free electricity generator. Options for replacing that capacity are natural gas, with all of its CO2 implications or buying hydropower from Canada, which, while carbon neutral, would have the effect of sending Massachusetts’ dollars not just out of the state, but out of the country.
A third option that would keep as much of Massachusetts’ citizens money in the Massachusetts economy is to encourage battery-backed solar to fill that void. One of the biggest “gripes” against solar has been the fact that it is an “intermittent” power source, where panels only produce power when the sun is shining. Battery-backed solar solves that issue, and even better, the State is home to some promising battery companies (Aquion Energy that just won a $500,000 award from MIT for one).
We’ll need people who are smarter than me to figure this out, but what if an SREC-III program was designed that compensated owners based on their minimum hourly output over a 24-hour period? Utilities wouldn’t have to worry about net-metering any longer as homes and businesses would be able to use the power generated by their systems when they needed it, rather than send it on to their neighbors. By writing legislation that specifically promotes battery-backed solar, National Grid’s and Eversource’s suppliers could see much reduced load on their plants, alleviating the need to contemplate adding dirty generation sources to replace Pilgrim.
It could be a win-win for everyone. The utilities are going to have to invest in significant amounts of infrastructure to replace the shuttering of Pilgrim, and that money is going to come from Massachusetts rate-payers. With an SREC-III that specifically incentivizes battery-backed solar, that money would finance the next phase of the solar revolution, and revitalize an industry that’s about to come to a grinding halt.
It’s money that we’re going to have to spend anyways – why wouldn’t we want it spent keep existing jobs in the state, creating new jobs, support our local high-tech sector, reduce our carbon foot-print, and catapult Massachusetts ahead of California in leading the next phase of the solar revolution. I can’t think of anyone that would be opposed that isn’t in the pocket of one of a Big Utility.
Is the outlook for Solar cloudy in Massachusetts?
By almost every imaginable measure, Massachusetts’ solar movement has been a resounding success, yet its future is in doubt
Pushed forward by a number of tailwinds, including the Federal Investment Tax Credit, the State-imposed Renewable Energy Portfolio Standards (which created the SREC and SREC-II Programs), and some of the highest retail prices for electricity in the country – solar in Massachusetts has helped lead the way for the country in moving towards more environmentally sustainable energy generation.
In addition, job growth in the Bay State has been robust. The state has added over 15,000 solar employees and almost 100,000 clean energy and efficiency professionals. In fact, Massachusetts ranks only behind the much more populous California among states with the most people employed in the solar industry.
Unfortunately, this means that the Massachusetts’ solar industry has become a victim of its own success. Absent legislative support, what was a vibrant industry for the greater part of the last decade, is currently experiencing a dramatic slowdown. Parts of the state have been feeling it since last summer. Some view it as ironic that this is happening on the heels of December’s Congressional action at the Federal level, which recognized the environmental and economic benefits of solar, and encouraged the further growth in the industry, by extending the Federal Investment Tax Credit for another five.
First, State-imposed net-metering caps for National Grid’s territory were reached (almost a year ago), foreclosing the viability of most commercial-scale solar projects in National Grid’s service area, and killing off any hope for off-site community solar projects. Secondly, the Mass DOER announced in February that, thanks to an avalanche of applications received in the beginning of the year (two years worth in two weeks), the SREC-II program had reached its goal for larger 25kW sized projects, while limited space remains for projects smaller than 25kW.
Because of the way that the State has carved up the utilities territory, a solar facility in Williamstown can apply net-metering credits towards an energy meter in Worcester, while Pelham and its neighbor Belchertown are in different territories altogether.
This means that National Grid, which serves the most populous portions of the state, long ago reached its net metering capacity (indeed, should the caps be raised, there is a huge waiting list ready to gobble up anything that becomes available), while the more sparsely populated region served by Eversource WMECO has hundreds of usable sites for large-scale solar installations but relatively fewer potential customers. Additionally, the Eversource NSTAR territories have many potential customers, but no available land or roof space to put such systems on.
It’s true that even within the constraints of net metering caps, the truly motivated purchasers will still benefit from installing solar panels by reducing the amount of power they draw from the grid during daylight hours. However, that constraint has essentially foreclosed the hope for community solar, where the financially disadvantaged, those without homes and businesses without their own roof space, could have their energy needs served by off-site solar arrays.
Additionally, in the not-so distant future, the Pilgrim Nuclear Station, the state’s lone nuclear generation facility, will be shutting down. While some environmentalists have applauded the plants imminent closure, others that are focused on lowering CO2, say it will create a significant gap in the amount of clean electricity coming into Massachusetts’ power grid. The Pilgrim closing doesn’t slow what Massachusetts resident use, and without new legislative support for wind and solar, it would be too easy for utilities to use much more damaging coal and natural gas to fill that need, much like has happened in Vermont when Yankee Nuclear closed. This, in the end, means we will be releasing more CO2 than our fair share.
When the state legislature began discussing the future of net-metering in Massachusetts, it became clear that this would not be an easy task. This discussion was going on in the summer of 2015 when the Massachusetts Senate voted on a solar bill – moving on the Net Metering issue. The House ‘responded’ with a vote on the last day of fall session that offered drastically reduced energy credits to future solar owners Today, due to this brinkmanship, it is now a dire situation.
If we want to continue leading the way in the nation’s push toward a future driven by clean energy, we need to address the net metering situation immediately, and both sides need to be prepared for some give and take. If we want our solar professional to be able to maintain high quality, trained and experienced teams we need legislative consistency – the market does not appreciate uncertainty. There are plenty of successful Net Metering programs that we can research from around the globe if we need suggestions in how to structure. The Utilities, like Eversource and National Grid, are fighting tooth and nail against Net Metering – for obvious reasons: it’s a successful program driving competition.
More importantly, with the highly-successful SREC-II program having met its goals, the State should begin drawing out a follow-up program. Again, a lot has changed since SREC and SREC-II were devised, namely with the looming closure of Pilgrim, we will need to further incentivize the production of clean energy lest the utilities replace the lost capacity with high-carbon sources. Because of its Renewable Portfolio Standards, utilities in the State of Massachusetts have a legal requirement to meet energy efficiency goals.
Lastly, and this would probably require the most work from the legislature, we should work to devise support for community solar projects, and allow solar installations to net-meter against any electric meter in the state, regardless of which territory the target meter and the distributed generation facility are located. Community Solar is the genius of our State Solar programs – continual evolution and support of this program is the utmost importance.
Solar has grown by leaps and bounds over the last decade. The price of panels has fallen rapidly thanks to China’s manufacturing might, while the efficiency of solar panels has grown by leaps and bounds thanks in large part to ingenuity from U.S. based firms such as SunPower and SolarCity. For Massachusetts in particular, the last decade has seen the birth of dozens of successful companies and the creation of a large, skilled workforce. We have to ask ourselves, do we want to see Massachusetts continuing to lead the clean energy revolution, or witness an exodus of the jobs and businesses that have been serving Massachusetts so well for the last decade?
The Utilities OWN the Massachusetts House
It amazes me that something so important to the State of Massachusetts can be manipulated and controlled so easily by a couple of power companies.
“…the truth is the House squandered an enormous amount of time, probably by design.
The Senate voted to lift the cap during the summer, but the House waited until the day before the Legislature recessed for the holidays before reporting its bill out of the House Ways and Means Committee.”
Projects will be cancelled, I see them not move through on a daily basis, due to our Legislature not doing their job. And these people – still getting paid – will now force other people out of work. Electricians, salespeople, engineers and more. Because politicians purposely ignored their responsibility. One of the few programs in the country that bring solar power to those less well off, to those who cannot afford a home – that’s what we’re allowing our politicians to cut the throat of. They did it coolly – by simply not doing their job.
And of course – this ignores that more pollution will be put into the atmosphere, that more people will die of lung disease and that just a little bit more of our coastline will be given to the Fossil Fuel gods.
Stay Classy Massachusetts.
Next Step Living reaches over 10,000 reservations for community solar gardens
Even amid the strong growth of the U.S. solar market, community solar, where customers sign up for shares in remote utility-scale solar projects, stands out as an area of particularly rapid expansion.
In June GTM Research estimated that the U.S. community solar market would grow five-fold this year to reach 115 MW, and would grow to over 500 MW annually by 2020.
An announcement today by Massachusetts-based Next Step Living is in line with these trends. The company reports that it has reached nearly 11,000 reservations for community solar gardens, with more than 1,500 contracts for gardens expected to go live in late November in Western Massachusetts.
Next Step Living says that at these rates, Massachusetts residents are signing up for around 2 MW of solar PV per month.
In Massachusetts, community solar arrangements are supported through virtual net metering. Under this policy a utility customer can receive the bill credit benefits of net metering for a solar installation even if it is not located on the site where they consume the electricity.
As such, Next Step Living is building some of its PV projects in sparsely populated Western Massachusetts, and signing contracts with subscribers in National Grid and Eversource service territories which stretch across the state and include the Boston metro area.
On Tuesday, John Farrell at the Institute for Local Self-Reliance reported that 16 U.S. states now have some form of virtual net metering policy, up from only nine early 2014.
“I think it is the recognition by legislatures, that making sure that solar can be available to everyone is an important principle,” Farrell told pv magazine. “We’re also seeing utilities recognizing that community solar program may be a way to engage with their customers.”
Linden Hills Community Solar project underway
The Linden Hills Co-op has officially signed on as a host site for a community solar garden. Residents can purchase one share (one solar panel) to offset their home’s energy use through Xcel Energy bill credits.
The cost is $1,700 per share, as well as an ongoing annual fee, and the cost to reserve a share is $100.
The program is a partnership between Sundial Solar and Linden Hills Power & Light.
To receive more details or a reservation form, contact email@example.com.
‘Community solar’ is a hot business
Interest in solar energy is booming in Massachusetts, and it’s no different in Lunenburg.
At a recent Board of Selectmen’s meeting, representatives from Nexamp, a solar-energy provider, discussed a proposed community-solar project that would involve the development of a 500-kilowatt solar farm on Fisher Road in Fitchburg.
For this, Nexamp would treat Lunenburg as an “anchor tenant,” meaning that half of the electricity generated through net-metering credits would benefit the town, representatives said.
Ratepayers would have a 15 percent discount on every bill, they said.
At that time, Nexamp needed about 50 more people to sign up, and, according to Joseph Fiori, a Nexamp sales associate, they’ve been “inundated with requests from the community to join the program.”
Ideally, they’d like for everyone to join, but the number of customers needed will be met, and soon, he said.
The company is hoping it will have another project soon that it will be able offer to the community, he said.
“That’s kind of a wait-and-see,” he said.
Community solar is not like the panels you’d see on a roof, Fiori said. Both are “great investments,” but they’re different.
Amherst residents can still blaze a path to Solar for others to follow
The short of it is that the Town of Amherst should be applauded for going solar, no matter which path it chooses. I also understand that my proposal came in far too late in the process to have adequate time to be vetted properly by the Town, and that there are numerous uncertainties (including debt-financing) that would need to be addressed before moving forward, where as SunEdison has provided a straight forward path to reducing the Town’s carbon footprint and to provide a meaningful savings in the process.
However – the push to go solar doesn’t stop at our Town-owned buildings. If there was ever a town that could demonstrate not only to other communities in our Commonwealth, not to mention the country, its commitment to going green, I think Amherst is it. Therefore, I would like to propose that we investigate creating our own “community solar” project, whereby the owners of the project, whether they are homeowners, business owners, or renters, band together to create a PV array that they would receive ALL the benefits from.
There are many advantages to this method. By installing a PV array in a single, optimal location, it removes the requirement of each homeowner having a South-facing rooftop with minimal shading from surrounding trees. This means that all the residents of Echo Hill, Amherst Woods, and surrounding towns could all benefit if they so choose. Not only that, condominium owners such as those at Amherst Fields could have access to solar power despite both heavy tree-coverage and the shared ownership of their rooftops.
It is also a more cost-effective proposition to those that want to become involved than municipal ownership of a PV array. For one, residents and businesses pay taxes, and therefore would be able to qualify for the 30% Federal Investment Tax Credit. Secondly, “Community Solar” arrays provide greater benefits in the form of increased SREC production. Per state law, a land fill array has a 0.8 SREC multiplier, (it takes 1.25 MWh of solar production to create 1 SREC-II), whereas community solar has a 1.0 multiplier (meaning that 1 MWh produced by a community solar array creates 1 SREC). Lastly, on the basic of cost per watt of PV installed, a large-scale ground mounted installation should easily be 40% cheaper to build than numerous smaller roof-based projects.
Taken together, this means that the cost proposition I laid out before is even more compelling to residents. The benefit to those who participate would also be much more pronounced – rather than see perhaps a $500 reduction in their annual property tax bills, participants would see an immediate an ongoing reduction to their home utility bill, potentially far in excess of that amount on an annual basis, and would see an additional benefit from the sale of SREC-II’s generated by such a system over the 10 years that state law allows.
I have registered the domain amherstcommunitysolar.com and have reached out to an Amherst attorney familiar with Partnership Law, Real Estate Law and with experience with solar to discuss how to structure this in a trustworthy, accountable, and fair way, and would love to be a part of helping the residents of my town not only go green, but to lead the way to community solar by example. The domain will be live tomorrow, and I will begin laying out information for everyone interested to review as soon as time allows. In the meantime, if anyone would like to discuss further or get involved, please contact me via the new Amherst Community Solar website.
Hardware shortages may slow solar growth in 2016
- The rush to install solar before the 30% federal investment tax credit (ITC) reverts to its pre-2006 10% levels at the end of 2016 has sparked a backlog of orders for modules and inverters that could slow solar growth, ECT reports.
- The shortage is causing scheduling difficulties for electric cooperatives developing utility-scale and community solar projects with average delivery times set at six months from large manufacturers and distributors, and could be fully booked for 2016 by early December.
- The National Association of Rural Electric Cooperatives urged members to place 2016 solar hardware orders before the year’s end.
The bottleneck in orders has birthed concern from 14 electric cooperatives participating in the Department of Energy-sponsored Solar Utility Network Deployment Acceleration (SUNDA) project, which aims to increase co-op deployment of solar.
If the U.S. Congress doesn’t extend the ITC, it will drop to 10% for commercial solar investments and zero for residential solar investments in January 2017. Such a concern has pushed installers and customers to throw up solar panels before the tax credit sunsets, which is causing a backlog for orders and might depress growth in the solar sector.
For the co-ops and DOE program, the backlog could hurt the co-ops. The program developed a standardized development package of engineering designs, business models, financing and insurance options and optimized procurement. The goal: Cut engineering design costs 25%, consolidated procurement costs 10%, and insurance costs 25% and bring the total installed cost down to $1.60 per watt.
Community Solar: Two Paths forward in Massachusetts
Massachusetts has created a legal structure that says investor-owned utilities must allow Community Solar via Virtual Net Metering. There are two basic models – the Participant Ownership model and the Public Lease model. However a project is legally structured, the basic mechanics for delivering benefits to the projects participants is the same, thanks to virtual net metering.
Once a community solar project has been commissioned, the utility measures how much electricity is produced, and then credits the accounts of the beneficiaries (owners or participants) based upon their amounts of ownership. Seems simple enough on the surface, but it took a lot of legal work from the State Legislature to create that benefit.
Participant Ownership of Community Solar Projects
“Participant Ownership” is the term used when a system is constructed with monies from, and will be owned by, the homeowners who will benefit from a community solar project. The solar power system feeds its electricity into the power grid.
There are a couple of reason people would do this instead of installing their own modules. For one, community solar can be much more cost-effective than roof-mounted solar panels. While a rooftop install can cost between $4 and $5 per watt, a large-scale installation can see the price drop down to the $2 to $2.50 range. That’s a big difference. Secondly, many homes may not be ideal candidates for rooftop solar for a many reasons – tree coverage, a too-small or complex rooftop may impede installation. And third, condominium and apartment dwellers who are interested in solar simply may not own an actual rooftop to install panels onto.
There is still one more benefit for the Participant Model – the owners get to benefit from the three main benefits of going solar: SRECs, Tax Credits and Depreciation. These are VERY strong financial benefits – they are why solar power is being built in Massachusetts. These financial benefits mean your initial money invested will come back to you within three to five years.
The Public Lease Model
The second pathway to Community Solar is called the “Public Lease Model.” In this model, the customer simply signs up with a “Competitive Supplier” and sees their cost of electricity supplied go down. In exchange for that simplicity, the customer loses out on the many benefits that will accrue to the systems owner over its lifetime, such as the Federal Investment Tax Credit, SREC-II generation and sales, and depreciation.
Owners of these projects receive these rewards because of the costs and complexities they face: They must find land, lease the from the owner, find financing to build the project, find customers that are interested in buying the energy, manage the project for 20-25 years (or more), and then decommission the project at the end of its lifetime. In a way, it’s a win-win – the owners of the project gain the tax benefits and the state-level incentives in exchange for this long-term responsibility – the end-users get solar power and a lower electricity bill.
This model gives a lot of flexibility to end users – while still giving the investor the chance to make money. An end user who leaves their electricity providers load zone can simply cancel their service. Likewise, in this model, solar power is only a phone call away to anyone who is interested, homeowner or renter.
This is the fundamental benefit of Community Solar – if buying a solar power system or investing a lot of cash in a shared installation isn’t realistic, the public lease model of Community Solar can still offer a better price than National Grid or Eversource.
Each system works best for certain people. Do you have the cash? Do you own a home with a solid roof? Might you be moving soon? City dweller with a condo? Not own a place? Want cheaper electricity? Just like the concept of being part of the solar movement – but not so interested in dealing with everything else? Any one of these reasons could be your reason – and every one of them is a good reason. Give your politician a pat on the back for developing these tools.
Community Solar is the democratization of solar power, and everyone can be involved, rich or poor.
**Here is a great checklist put together for community solar projects in Minnesota if you are interested in the Participant Ownership model – not everything is exactly the same as Massachusetts, but it is close enough that if you have these points answered – you should feel secure.**
PGE Makes Solar Power Available to Customers for $5/mo
Portland General Electric customers can now purchase output from a new, large-scale solar installation in Oregon under a renewable power option PGE announced today.
For just $5 a month, customers can purchase a 1 kilowatt block of Green Future Solar from energy produced by a 2,935 kW solar installation just completed in Willamina, Ore. Blocks will be available until the capacity sells out.
“Green Future Solar helps customers who’ve wanted to go solar, but couldn’t because they rent their homes, installation costs are too high, or they just don’t have a good spot available to install solar panels.”
“This renewable power option is the newest way PGE is helping our customers who want to support solar power,” said Carol Dillin, PGE Vice President of Customer Strategies and Business Development. “Green Future Solar helps customers who’ve wanted to go solar, but couldn’t because they rent their homes, installation costs are too high, or they just don’t have a good spot available to install solar panels.”
The new project is the largest solar facility in the PGE service area, one of the five largest solar installations in Oregon, and the first utility-scale solar project in Polk County. It contains 9,468 solar panels and covers approximately 10 acres. Revenue from the program will support the development of new renewable energy facilities in Oregon.
Each block of Green Future Solar equals 1 kilowatt of solar power, about the same as 4 typical panels on an Oregon-based array, or about 14 percent of the average residential renewable energy customer’s monthly energy use. At the end of the year, each customer will receive a report showing how much solar-generated electricity they contributed to the regional grid and the environmental benefits resulting from their participation. Starting in December, they’ll also be able to track the project’s solar output on a monthly basis.
PGE is ranked the top renewable program in the nation for number of customers enrolled and renewable energy sold by the U.S. Department of Energy’s National Renewable Energy Laboratory. More than 120,000 PGE customers are enrolled in one or more renewable power options, and PGE supplies them with over 1 million megawatt-hours of electricity per year. Green Future Solar joins the variety of renewable power choices available to PGE customers, including Clean Wind and Green Source.
To enroll or learn more about Green Future Solar and other PGE renewable energy options, customers can visit PortlandGeneral.com/Renewable or call PGE customer service at 1-800-542-8818.
In Vermont, A Forward-Thinking Utility Is Helping Customers Share Solar Power
Can’t have your own solar panel? Now, utility companies and startup Yeloha are making it easy to use the electricity from someone else’s—which could change everything about the grid.
What’s exciting, however, is that there’s now a growing range of alternatives to having your own solar situation. One, you can take part in a wide range of community solar projects, where developers put up arrays that local people can participate in. Even more interesting, there are now options to share in someone else’s home solar panel, even if that person is a long way away. Solar electrons, in other words, are being decoupled from their physical source, opening up all sorts of possible marketplace opportunities.
Yeloha, which we covered previously, is one of the first companies to make power sharing a reality. Like an Airbnb or Match.com for energy, it links up people with more capacity on their roofs than they need with people who want to get solar, but either can’t or don’t want the responsibility. Based in Boston, Yeloha is in the process of installing solar on 100 homes in Massachusetts that will act as hosts in the network.
See the Wall Street Journal’s article: “Peer-to-Peer Solar Network Yeloha Gets $3.5 Million to Launch in the U.S.” to learn more about Yeloha
Yeloha also plans to gather in hosts with existing equipment as well. Today it launches in Vermont under a partnership with Green Mountain Power (GMP), a utility that covers about 75% of the state’s electricity needs. Green Mountain Power solar customers will be able to sign up for Yeloha, subscribing in increments of one or more panels, and contracts lasting between one year and five years.
Could community solar’s future be at risk in Massachusetts?
Massachusetts Governor Charlie Baker sat before the Senate in the Statehouse and outlined his vision for solar in the state’s future yesterday. Of particular interest was net-metering, and net-metering caps, which figure prominently in the cost analysis of any solar project.
Governor Baker was quick to mention that he would not push for changes to the law regarding net metering for either individuals or industrial users, meaning users with roofs and capital to make such investments. Though, the future of commercial and Community Solar – remember Community Solar is the only way for those with less financial wherewithal to get solar power – installations could face greater economic uncertainties if the Governor doesn’t adjust his stance.
Specifically, to my ears, it sounded as if rooftop installations – people that can afford a house and can afford the up front cost – will continue to take full-advantage of net-metering for the foreseeable future, but when a solar array is installed in a field, whether it is owned by a solar developer or collectively by the residents whose homes might not be viable for solar (“Community Solar“), the net metering rules may no longer apply to them in the future.
There is much talk about solar customers leeching from the grid.
The utilities state that solar system owners are paying negligible amounts toward upkeep and maintenance of the electric grid overall because of the dynamics of net-metering, where their panels return power to the grid when it’s not needed in their homes. It’s with this argument that the utilities are trying to create a “rich versus poor” divide – pitching to the public that it’s the wealthy folk who are not paying their fair share for maintenance of the core infrastructure. This contrasts with a recent study by the Acadia Center which found that solar installations add more value to the grid than they are paid.
Who knows? There are arguments for that on both sides. But the state’s biggest energy players are not exactly starving for capital:
New England-based Eversource Energy has raised its quarterly dividend every year since 2000, and National Grid, a company with worldwide operations, still pays a healthy dividend to shareholders despite looking down the barrel of a 20+ year project to replace leaking natural gas infrastructure throughout Massachusetts.
One has to wonder which costs a utility more money – energy being transferred from a solar panel to a power line and then to a neighboring house, or tearing up miles and miles of city streets in order to repair and replace leaking cast-iron gas lines.
Just two weeks ago, National Grid approached state regulators for a 21% percent rate increase for delivering electricity to customers in Massachusetts, saying “Due to continued gas pipeline constraints, the electric supply prices remain volatile and relatively high, though not as high as last winter.”
At the same time, both National Grid and Eversource submitted proposals to lower the price of Natural Gas to Massachusetts customers (Eversource customers would see a 31% savings, while National Grid customers would see a 5% savings). (Authors Note: Yes – the price for electricity is going up because of natural gas, but the price of natural gas is going down. I wish I was making that up!)
And in New York, ConEdison has a tangle of old natural gas pipes that are in need of $10 billion in repairs, a cost which will ultimately be born by the company’s customers.
It seems to go like this: utilities make customers pay to build and repair their infrastructure. They then want to charge customers who have opted to go solar for accessing the infrastructure that those solar customers have already paid for. And while the utilities try to demonize the “rich people” who have already switched to solar power, they pass off huge rate hikes to customers as being the result of natural gas constraints, while lowering the price of natural gas delivery itself – and pushing against programs that benefit the poor.
The utilities seem content to play too many games in the hopes that the public doesn’t pay attention, and essentially want to have their cake and eat it too. They pass off capitalized investment costs to their customers to take on as an added expense, play games with rates that make no sense from casual inspection, and pay their shareholders an ever growing stream of dividend payments without making repairs to their infrastructure.
So – is net-metering an actual burden, a case of rich freeloaders taking advantage of commercial utilities? If so, why is the Governor pushing for a plan that will focus more solar power in those richer demographics? Why attack the one program – Community Solar – that balances our the ‘rich solar power owner’ argument? Or is quashing net-metering in the utilities interest as it would preserve their power as the status quo and game playing which they’ve proven to be so adept at?
Support community solar in Massachusetts? Let Governor Baker know!
Senate President Stan Rosenberg has been a long time supporter of green energy initiatives, recently telling reporters that he sees a “disconnect” between policy makers pushing green energy and regulatory agencies such as FERC and the state Dept. of Public Utilities, saying they are bound by outdated statutes.
Or, look up your legislator here, and let them know your thoughts.
How tax breaks are driving Vermont’s rush to solar
Solar is the fastest-growing source of energy in the country, and Vermont’s solar industry is growing dramatically. The solar industry is booming nationwide because of multibillion-dollar federal tax breaks, and developers have their eyes on Vermont because of its additional cash incentives.
In 2014, the state ranked at 22 out of 50 states for total solar capacity nationwide. Vermont’s industry employs about 1,500 people at 72 companies, and produces $76 million in output, making it the state with the most solar jobs per capita.
In just the past eight months, Vermont’s Public Service Board has approved 79 nonresidential solar projects across the state, including 11 commercial-scale installations. Last year, the board approved 138 nonresidential solar projects, including 23 commercial-scale installations.
Over the past 10 years, the total number of net-metered solar projects in Vermont has grown exponentially. The number and proposed size of commercial projects is also shooting up. The Public Service Department is now reacting to a handful of 20-megawatt commercial projects — which are 10 times larger than any of the existing projects in Vermont.
The growing size and amount of solar arrays is directly related to a 30 percent federal tax break for unlimited investments in solar projects. The tax breaks are designed to drive the nation away from fossil fuels, and supporters hope that solar energy use will help to combat climate change.
While state incentives pale in comparison, Vermont offers a tax structure that keeps solar developers rushing in, and a net-metering program that requires utilities to buy solar at a higher rate.
The federal government’s Business Investment Tax Credit, or ITC, which lets corporations write off 30 percent of construction costs, is set to drop to 10 percent at the end of 2016. That means if developers want to write off one-third of each solar project’s installation costs, they need to get their applications in as soon as possible and make sure their projects are built by Dec. 31, 2016.
IRS Releases Favorable Guidance for Individual Investors in Community Solar to Claim Section 25D Tax Credit
The IRS recently issued a Private Letter Ruling (PLR) clarifying that an individual investor in a net-metered community solar project may claim the federal residential Investment Tax Credit (ITC) under Section 25D of the Internal Revenue Code. (A copy of the PLR is available here.) The PLR is also significant because it appears to eliminate a number of contractual requirements that the utility and taxpayer needed to agree to regarding the tracking and ownership of the power produced by the solar project to be eligible for the credit.
Section 25D Tax Credit and Prior IRS Guidance
Just like the Section 48 ITC, the Section 25D ITC permits an owner of solar and other renewable energy property installed before January 1, 2017 to receive a 30% tax credit against federal income taxes. However, in order to claim the credit the property must “generate electricity for use in a dwelling … used as a residence by the taxpayer.” Some tax practitioners interpreted that to meant the credit was limited to solar projects on or adjacent to the taxpayer’s residence. A few years ago, the IRS provided some guidance in Notice 2013-70 (at Q&A Nos. 26 and 27) that taxpayers could in fact claim the credit for off-site solar projects. However, the fact pattern in the Notice described an off-site net-metered project that was owned by the taxpayer, so questions remained whether taxpayers could claim the credit for investments in co-owned community solar projects. Further, the IRS limited the Notice so that it only applied to net-metering arrangements whereby the taxpayer specifically contracts with its local utility to track “the amount of electricity produced by the taxpayer’s solar panels and transmitted to the grid and the amount of electricity used by the taxpayer’s residence and drawn from the grid” as well as stipulate in the contract that the taxpayer holds title to the energy until it is delivered to the taxpayer’s residence. These requirements were problematic because they were often at odds with utility tariffs and state net-metering laws.
The PLR is partially redacted but it was provided to a Vermont taxpayer requesting clarification as to whether his investment to purchase 10 solar panels in a 640-panel community solar farm along with a partial ownership in related racking, inverters and wiring is eligible for the Section 25D ITC. (A brief write-up about the project and taxpayer in the local press is available here.) The PLR explains that the project’s entire solar energy output is provided to the taxpayer’s local utility which then calculates a net-metering credit pursuant to its tariff and applies a portion of that credit against the taxpayer’s monthly electric bills.
EPB launches first community solar power program
For the first time since it was created 80 years ago, EPB plans to generate its own power.
The city-owned utility is looking to the sun to power a new community-based solar farm that is projected to generate enough power for about 125 homes.
EPB directors Friday approved a partnership with the Tennessee Valley Authority to launch Solar Share, a pilot program to construct 1.35 megawatts of solar generation to be distributed to a number of homes from a solar farm likely to be built on one of EPB’s service lots.
EPB is still working out the details of how solar enthusiasts might support the new venture. But the municipal utility is already asking those interested in buying solar-generated power for their homes to contact EPB at (423) 648-1372 to be added to the contact list for future updates. EPB has also developed a logo to market Solar Share and EPB Vice President J. Ed. Marston said program organizers are looking at locating a 4.5-acre solar garden or solar farm on one of its lots off of Holtzclaw Avenue.
“Our community is already benefiting from having the most advanced Smart Grid in the United States,” EPB President Harold DePriest said Friday in announcing the new initiative. “Thanks to our partnership with TVA, Solar Share will give our area the opportunity to benefit from a community-based, renewable source of energy.”
EPB and Appalachian Electric Cooperative in New Market, Tenn., are the two TVA power distributors that have contracted this year to participate in TVA’s community solar initiative for as local power companies.
Neil Placer, a senior manager of renewable energy solutions for TVA, said EPB may structure the arrangement with those interested in getting the solar-generated power in a number of different ways, including premium voluntary payments like under the Green Switch program or purchases of solar credits or shares from EPB.
EPB will own and operate the solar farm, which may be better sited and operate more easily than for individual homeowners to try to place as many solar panels on their own rooftops or yards. Placer said about a fourth of all homes aren’t suited for solar generation because they are shaded are facing in the wrong direction to capture the sun’s rays and energy on photo-voltaic panels.
Because community solar projects like Solar Share operate as a shared resource, they are more cost effective than home-based deployments. Community solar projects also negate many of the financial and physical barriers individual homeowners may face such as upfront costs or having rooftop areas unsuitable for solar panels.
Individuals and businesses now have solar panels in Chattanooga and generate power that is sold back to EPB and the power grid. But the proposed EPB Solar Share initiative would be the first to generate solar power through a shared community arrangement.
Community solar projects offer solar power to those without rooftop panels
Solar-Power Sharing Programs May Be Poised to Take Off
Community solar projects offer those without rooftop panels a way to tap the sun’s power
Many consumers would like to switch to solar power but can’t. It could be their homes have too much shade or their roofs can’t accommodate solar panels, or perhaps they live in a condominium or apartment building.
Enter so-called community or shared solar, which allows people to buy solar power from centrally owned arrays. The power is delivered by the local utility, and customers get credits on their monthly bills for any power the project sells back to the grid.
Although a relatively small business now, community solar is growing and could account for as much as half of the small-scale solar-panel market by 2020, according to an April forecast by the Energy Department’s National Renewable Energy Laboratory in Golden, Colo. That would create a hefty new solar market in between individually owned rooftop arrays and large utility-scale projects.
“There’s a lot of potential [for community solar], particularly with the cost of solar dropping every year and programs being put in place to make things easier and more affordable,” says David Feldman, an analyst at the National Renewable Energy Lab and an author of the report.
The U.S. home solar-power market has grown rapidly in recent years, thanks to falling panel prices and government subsidies. Homeowners nationwide installed 918 megawatts of panels during the first half of this year, nearly quadruple the amount installed in all of 2010, according to GTM Research and the Solar Energy Industries Association. By the middle of 2015, there were about 4,400 megawatts of home rooftop solar panels installed in the U.S., according to GTM, compared with just 81 megawatts for community solar projects.
Community Solar – Why Massachusetts is ahead of the curve, and needs to stay there
We are in the midst of an energy revolution. Massachusetts, the rest of America, and the rest of the world are building out a clean energy infrastructure. This infrastructure will be made of community solar projects, wind turbines and other renewable sources of power.
We have a challenge with how we’re doing it in the United States. In certain places the poor are missing out, and the rich, as the adage goes, are getting richer. This isn’t what we had in mind when we say we want to democratize energy. It’s gotten to the point where certain groups are using this economic divide to spearhead attacks on solar power. Sadly, this angle might even be working in some places. Despite it’s importance, clean energy is still subject to the ever present global games of politics and economics.
What is the Problem?
In certain markets, namely those without thoughtfully structured development plans, we are finding the following:
The solar boom has been slow to extend to lower income neighborhoods. The 49.1 million households that earn less than $40,000 of income per year make up 40 percent of all US households but only account for less than five percent of solar installations. Source
This leads us directly toward the Federal programs, designed to drive solar power via a focus on tax credits. Who gains the most from tax credits? Take a guess:
Is this the long-term plan? Of course not.
We’re better than this, and we know so, but we had to start somewhere. We should thank those early adopters…those that invested in new, clean technology back when it was beyond the reach of anyone else. If not for that initial demand, spurred on by both the investment class and by public spending, we could never have dropped the price generating electricity with solar modules by such an astronomical amount.
What does the Evidence say?
Now that we’ve eaten of the tree of knowledge, how are we going to change? Luckily, many people have been thinking about this for a long time. Let’s first clear the air and recognize that solar power in general has helped grid pricing. This is according to the International Energy Agency and the Nuclear Energy Agency:
The significant drop in the price of solar and wind generation costs, especially for solar PV installations, helped prevent cost inflation in electricity generation over the past five years. Source
Secondly, let’s trash all those statements coming from utilities like this:
We need to set the stage for continued growth in solar in what we believe will be a sustainable way which is to not have solar customers that are being subsidised by the rest of our customers and producing unsustainable rates for those customers. Source
This propaganda needs to be quickly responded to with actual research, not talking heads trying to defend their stock options. Research like this:
Acadia Center assessed the grid and societal value of six marginal solar PV systems to better understand the overall value that solar PV provides to the grid (of Massachusetts). By evaluating an array of configurations, this analysis determines that the value of solar to the grid – and ratepayers connected to the grid – ranges from 22-28 cents/kWh, with additional societal values of 6.7 cents/kWh. Source
This means that those who install solar power are giving greater than they are taking. An analysis of solar power commissioned by the Public Service Commission in Mississippi, “Net Metering: Costs, Benefits and Policy Considerations” came up with a nice clean list of the benefits:
The evidence is clear that solar power brings everyone connected to the grid, rich and poor, great benefits. Now that we are confident that the general addition of solar power to the grid helps everyone, let’s focus on the details of how we can help specifically those less financially fortunate. Those who don’t own a home, and anyone else that wants to participate in the solar revolution, but just can’t make it happen…
What are we doing to fix this?
The first step to fixing a problem is acknowledging that it exists. The second step is wanting to fix it. We want to fix this problem, we want to fix it all the way from the top to the bottom, evidence recently put forth by the White House proves this to one extreme:
- Launching a National Community Solar Partnership to unlock access to solar for the nearly 50 percent of households and business that are renters or do not have adequate roof space to install solar systems, including issuing a guide to Support States In Developing Community Solar Programs;
- Setting a goal to install 300 megawatts (MW) of renewable energy in federally subsidized housing and providing technical assistance to make it easier to install solar, including clarifying how to use Federal funding;
- Housing authorities, rural electric co-ops, power companies, and organizations in more than 20 states across the country are committing to put in place more than 260 solar energy projects, including projects to help low- and moderate- income communities save on their energy bills and further community solar; and
- More than $520 million in independent commitments from philanthropic and impact investors, states, and cities to advance community solar and scale up solar and energy efficiency for low- and moderate- income households. Source
Evidence on the state level shows us wanting to fix this in the middle latitudes. California is taxing companies that pollute and using that money to put solar power on the homes of the poor. And all the way at the grassroot level we are seeing The People help The People. Some go as far as to say that solar power is a key to ending global poverty, and, if cellphones as evidence of distributed banking and data are any evidence, distributed solar might be that key.
How exactly did Massachusetts figure out how to attack this problem?
Well, guess what? Massachusetts – the Bay State, the Old Colonial State, the Codfish State – is one of the leading places in this fine country of ours that is pushing down those barriers.
How does it work?
First, the State of Massachusetts designed a program that allows for many people to buy energy from large, centralized and, most importantly, well-priced solar power farms that are located in places that make sense. The average 8kW system, which fits on a regular house and brings your bill to $0/month, might cost $4/W. The average 1000kW+ community solar project might cost $2/W.
Second is virtual net metering. This program allows energy to be produced in large amounts at these central locations and then be applied to many smaller electricity bills spread all around the region at all times of the day.
Third, the Massachusetts SRECII Carve Out gives solar developers a fair financial playing field with the fossil fuel companies. Remember that Exxon knew about climate change in 1981. Realize that fossil fuels receive $5.3 trillion in tax breaks, subsidies and ignored externalities (like health care costs and climate change damage) every single year. An SREC is an amount of clean energy that the power companies are legally obligated to buy, and Massachusetts has told power companies that if they want your money and legal monopolies, they must buy this clean energy.
These three factors come together and give us the secret recipe to help people who don’t have the funds to buy solar modules on their own. It let’s anyone change their electricity provider to a community solar power plant, with no contracts, and get electricity at a better price than the major power companies can offer. If you live in an apartment, you can get solar power. If you are trying to get a better deal on your electricity, consider a community solar project. If you own a small home that isn’t proper for solar power, a community solar
By bringing people together to own something as one, as a community, we continue to build on our very special Massachusetts understanding of politics and society. This is our home. These are our lives, and we need to keep hold of them. With community solar we even offer a chance for small businesses, who often don’t own their structures, to participate. We know that when money stays local – local contractors, local electricians, local land tax revenues – then the local economies are a little bit stronger.
Let’s be blunt. The power utilities are against anything that will limit their profits. Their legal obligation is to protect stock holders. Things like the current Baker Bill, which want to limit Net Metering, are politics whose goal is to create fear. The evidence is clear. Smarter policy leads to broader uptake:
Massachusetts provides a good example of how the adoption of rooftop solar across income levels can follow household distribution almost perfectly, with residential installations spread fairly evenly over the population. Source
The path we here in Massachusetts have set out on will be followed by many across the country. If we are not vigilant, those who are asking “Will Massachusetts’ Net Metering Caps Spoil the Community Solar Party?” will get a terrible answer. Your choice.
Community solar farms growing around Maine
A planned community solar farm near Androscoggin Lake in Wayne is one of about 10 similar projects that are under development around the state.
The projects are unlike traditional residential solar installation in that the households benefiting from the solar-generated power aren’t actually located on the sites of the solar arrays. Instead, the power goes to Central Maine Power Co.’s grid, and the customers get credit for the power to pay for their own electricity bills.
The first community solar farm in Maine was built last fall in South Paris, and the proposed project in Wayne would become the third such project if completed this fall as expected, said Fortunat Mueller, co-founder of ReVision Energy, the company developing the projects. The other completed project is in Edgecomb.
So far, two customers have committed themselves to investing in the Wayne project, and ReVision Energy energy is seeking seven more. The company is hosting a presentation about community solar farms at 7 p.m. on Sept. 15 at the Memorial Chapel at Camp Mechuwana in Winthrop.
20% by 2025, 50% Community Solar, No Net Metering Caps, 15-26 Initiative Petition
Wednesday at 11:00 AM, Maura Healy, the Attorney General for the Commonwealth of Massachusetts certified MA 15-26 INITIATIVE PETITION that it is in proper form for submission to the people. The Certification plus a fair and concise SUMMARY of 15-26 INITIATIVE PETITION drafted by the Attorney Generals Office and the INITIATIVE PETITION FOR A LAW RELATIVE TO SOLAR AND RENEWABLE ENERGY are linked to here.
Now the real work begins. To be taken seriously by the legislature we need 100,000 signatures to net out 65,000 certified signatures by the registrar of each municipality by the third week in November. The Solar Bill of Rights Committee has filed with the Massachusetts Office of Campaign and Political Finance to be in compliance of political committee related filings.
The objective of this petition legislation is to get the legislature to adopt the concepts on their own for the benefit of the Commonwealth. We will have three traunces of opportunity to use this referendum to affect legislation – September – November of 2015, after the 65,000 certified signatures in January -February of 2106, after the subsequent 10,000 signatures if the legislature does not act in late spring of 2016.
By the acts and deeds of the Baker Administration to date, the Solar Bill of Rights Committee has no confidence that the Baker Administration will do anything meaningful regarding solar and the environment during the 4-8 years the administration may be in office. The legislature or the voters at the ballot box must take meaningful action.
How did 15-26 Initiative Petition come to be?
In June of 2015, it appeared that the Baker Administration and the House of Representatives were not going to do anything substantial regarding solar by August. Mary O’Donnell got Haskell Werlin and myself together and we spoke about a referendum. Representative Tom Calter has said “the legislature hates referendums, therefore you have to do it.” Mary and I met at the AG’s office and spoke about timing, structure and regulatory compliance. Mary was the energy that got the process going, but my responsibility was to get the petition written. Running my business and writing legislation are two full time jobs so it took me a while to get going. Our deadline for the AG’s office for a referendum in November of 2016 was the first Wednesday in August. So on the weekend of July 22, I wrote the “concept language” and distributed the language to Mary O’Donnell, Michael Frechettte, Haskell Werlin, Emily Rochon and Mark Lebel. Active discussions ensued and to be frank, Mark was very frustrated with me that I was not following his format. But we got the revised concepts to Courtney Feeley Karp, who on a pro bono basis, shaped the reality of getting the concept into legislative language suitable to be adopted by the legislature. Mark commented that the language was pretty good. With the deadline approaching and the recommendation that we speak with the AG’s office well in advance of the final submittal, we did not have the time to gather support from many large groups so I focused on input from a small but diverse group.
The Solar Bill of Rights Committee: I am Co-Chair and Treasurer, Haskell Werlin is Co-Chair. Mary and Michael are board members, Chris Kilfolye, Claire Chang and John Ward are helping out and Emily Rochon will advise as she is able. I am reaching to to environmental groups to join with us in this effort. Michael did yeoman’s work getting the initial 10-certified signatures to the AG’s office in time. By copy of this email I am reaching out to all of you for your interest in participating in leadership roles, regional signature drives, legislative support and other organizational positions that may be required. Some day we may ask for money.
This petition will be transformative as it builds on the Green Communities Act and regulations in place. The petition will:
- Remove all caps on net metering
- Establishes a development rate to generate 20% of Massachusetts load by 2025, 50% of that total will be devoted to Community Solar.
- Raises the RPS to 2.5% per year
- Establishes incentives for storage technologies to compliment solar and other renewable technologies and to provide for a plan of strategic grid security for the Commonwealth
- Establishes a firm fixed 6% rate of taxation for payment in lieu of taxes agreements with municipalities.
- Allows full net metering for all systems up to 1 MW and all community solar projects.
- Establishes a new definition of “Solar net metering credit”, basic service+distribution+transmission+transition= solar payments
- Increases the size criteria of net metering facilities to be large enough economically to be meaningful as a contributor to community solar and the grid.
- Establishes a proceeding to remove the barriers for the installation of distributed generation resources
While we are hopeful the legislature may act in September – November with something substantive, I think we are going to be thankful we will have 15-26 Initiative Petition certified by 100,00 signatures just in case. Now we just need to execute.
Will you support the Solar Bill of Rights Committee?
Co-Chair – Solar Bill of Rights Committee
42, 8th Street, #4413
Boston, MA 02129
Here’s why 2015 is the ‘tipping point’ for community solar
“As utilities wake up to the value proposition, it will increasingly shape the market”
With many utilities addressing the challenge of rooftop solar, community shared solar is fast emerging as an appetizing solar business model. A top solar research firm now says 2015 is the year that the community solar market breaks through.
A new market report forecasts community shared solar developers will grow 2014’s 65.9 MW of cumulative installed capacity to 465 MW by the end of 2016. A 59% annual growth rate for the sector over the next five years will take the 21 MW installed during 2014 to 534 MW installed during 2020, it predicts.
“There may have been more articles about community solar than projects brought online to date,” joked GTM Research Sr. Analyst Cory Honeyman, co-author of U.S. Community Solar Market Outlook 2015-2020. “But 2015 is the tipping point year when community solar becomes a relevant sector in the broader U.S. solar opportunity.”
Community Solar uptake on rise for residential, but how to attract commercial users is the question.
Community solar and the large corporate user quandary
Community solar, a model where customers purchase a portion of the energy produced by a solar array system, has been gaining traction across the United States. Just within the last two months, the Obama administration announced plans to provide financial and educational support for community solar in low- and medium-income neighborhoods.
SolarCity, the nation’s largest installer of residential solar panels, announced its first community solar project. Twenty-four U.S. states have at least one community solar project online, and Green Tech Media research predicted a seven-fold increase in community solar installations over the next two years alone.
Until now, community solar largely has benefited residential and small non-residential customers in a specific community. Yet other stakeholders also want to get into the shared renewable space — large corporate buyers.
When being big is not helpful
A community solar garden (CSG) or shared renewables program offers an affordable, convenient way of providing renewable energy to customers who do not have access to rooftop space or who are unable to afford the upfront costs of installing rooftop solar panels.
Customers subscribe to a certain percentage of the renewable energy supplied by a “garden,” or collection of solar panels concentrated in a single site, which can encompass anywhere from 10 kilowatts (kW) to 20 megawatts (MW) of solar capacity, depending largely on state regulations and utility program caps. Subscribers usually then receive a credit on their utility bills for the amount of energy produced from their share of the CSG.
For those 13 states and the District of Columbia with shared renewables policies in place, there are clear restrictions on how big a system can be in order to qualify as a CSG.
Clark community solar project goes online
Participants in Clark Public Utilities’ community solar project will gather to celebrate the project’s completion with a ribbon-cutting ceremony at the community solar array Wednesday morning.
Community solar projects allow individuals within communities to pool their money to purchase shares of a solar array and split the benefits. Clark Public Utilities divided each of the 272 panels in an array into 12 “shares,” priced them at $100, and allowed participants to purchase up to 100 of the 3,264 shares.
The array was to be constructed on community property – in this case, a formerly empty corner of Clark Public Utilities’ Orchards location at 8600 NE 117th Avenue – and participants would receive generation credits for electricity sold back into the grid.
In addition to generation credits of $.0816 per kW generated, participants will receive a state incentive of $1.08 per kW, which is double the home solar incentive of $.54 but is only scheduled to last until 2020.
Is Baker’s bill good for solar?
Last Friday, the Baker administration filed a solar bill aimed at addressing the net metering caps that have stalled solar projects across the Commonwealth. This move comes shortly after the Senate voted unanimously to advance legislation that would raise and then eliminate net metering caps.
If the Baker administration is to be believed, this bill is great for solar and will keep the industry growing for a long time. Is this true? Is the Baker bill good for solar? Before you can answer that, you need to understand the essential ingredients for a good solar bill. In MassSolar’s view, a good solar bill must do at least the following four things:
- Eliminate the net metering caps;
- Provide fair and equitable access to solar;
- Provide fair compensation for solar; and
- Set an ambitious solar target to help meet GWSA emission reduction targets.
Does the Baker bill do any of these things? The answer is a resounding NO. Here’s why:
Net metering caps. Governor Baker’s legislation does not eliminate the net metering caps. Instead, it raises them by 2% each for public and private projects. In National Grid territory, a 2% cap increase equals about 100 MW of solar. Given the current backlog of projects, this new cap would likely be hit within 3 -6 months. That would put the solar projects in 171 communities back on hold, stall the market and risk further job losses. Net metering caps would also continue to hinder the growth of non-solar technologies, such as anaerobic digestion, across Massachusetts.
While the legislation grants DPU has authority to raise the caps, they can only be raised if doing so is in the “public interest”. Given the DPU’s skepticism about the benefits of solar, as evidenced in Chair O’Connor’s opening remarks in the Net Metering and Solar Task Force report, along with utility opposition to increasing net metering caps, convincing the DPU to act would be an uphill battle. As such, the Baker bill does not create a long-term, sustainable path for solar. Instead, the Baker bill means solar will remain hostage to net metering caps and solar businesses will continue to lack the certainty and predictability they need to be successful.
Fair and equitable access to solar. Everyone should have the opportunity to access the benefits of solar, regardless of their income level or whether they own a sunny rooftop. The goal of fair and equitable access to solar is best achieved by treating community shared solar (CSS) projects and low income solar projects the same as residential rooftop systems. Baker’s bill works against this goal by dramatically lowering net metering credit values for new CSS and low income solar projects once the 1600 MW solar target is reached. This will make many CSS and low income solar projects uneconomic and thwart efforts to use solar to solar energy affordability issues in low income communities.
Fair compensation for solar. Solar should be compensated fairly for the value it provides to the grid. To determine what fair compensation is, the benefits and costs of solar should be evaluated in a Value of Solar study, with a net metering credit value established based on the results. Unfortunately, the Baker bill skips the Value of Solar study step in favor of drastically cutting compensation for new solar projects (except small residential projects) once 1600 MW of solar is installed. This despite the fact that study after study has shown that the value of solar electricity often exceeds retail electricity rates. If this legislation is enacted, low income, community shared solar and municipal solar projects would be credited for excess electricity at basic service kilowatt hour charge. All other types of solar projects are credited at the average wholesale energy price for the given month. This is typically even lower than the basic service kilowatt hour charge.
Ambitious solar target. The Commonwealth has committed to reducing greenhouse gas emission 80% by 2025. To get there, we need to power our economy with 100% renewables. Solar currently represents 2% of our electricity mix but solar has the technical capacity to generate twice the amount of electricity we consume. Setting a bold, ambitious target, such as 20% solar electricity by 2025, will put Massachusetts on the path to a cleaner energy future while giving the solar industry the long-term certainty it needs to keep solar working for Massachusetts.
In summary, the Baker bill is a big step backwards for solar in Massachusetts. We can do better. What does better look like? Check out the Next Generation Solar Policy Framework.