April 6, 2016
Late Tuesday night, five months of negotiations came to a close as the Massachusetts Net Metering Conference Committee released new proposed solar legislation for the Commonwealth. The Net Metering Conference Committee was formed in November of 2015 to negotiate a compromise solar bill reconciling two conflicting pieces of legislation passed by the Massachusetts House and Senate in the fall of 2015. The resultant bill, H.4173, addresses the net metering caps that have been plaguing the solar industry for over a year.
The compromise bill put forward proposes the following;
- Net metering caps increase 3% for both public and private entities, resulting in a 7% cap for private and 8% cap for public projects.
- Net metering credit values are reduced by 40% forinstallations greater than 25 kW in size, once the state reaches an installed solar capacity of 1,600 MW.
- This means excess energy that is currently valued at 17 cents per watt will now be worth 10.2 cents per watt.
- Municipalities and public entities are exempt from this reduction in net metering value, and will still be credited for excess energy at 100% of retail value.
- The utility is granted permission to propose a minimum bill once state solar capacity has reached 1,600 MW. This would require any solar producer to pay a minimum amount to the utility company per month. The Department of Public Utilities (DPU) is directed to consider these proposals in the bill, and enact prior to December 31, 2018.
- Solar customers already approved for net metering are able to keep their current net metering credit structure for 25 years from the date the customer was approved to interconnect.
- The DOER is charged with implementing a new incentive program (essentially SREC-III), with 12 specific areas to address.
- This new incentive program is directed to reduce the cost of solar incentives to Massachusetts ratepayers.
- The new incentive program is directed to feature “a known or easily estimated budget to achieve program goals through use of a declining adjustable block incentive, a competitive procurement model, tariff or other declining incentive framework.”
- The new incentive program will likely have specifications dependent on project type; for instance low-income or community solar projects will likely receive different incentives than private commercial installations.
It is unclear if these changes will take effect once 1,600MW of solar projects have been approved for net metering in the state – which has already happened – or once these projects are installed and operational. The Massachusetts solar industry is working to clarify this issue.
This bill will now go to the Massachusetts House, and then the Senate, for an up-or-down vote, and if approved will proceed to Governor Charlie Baker for signature into law. Sources say this vote could happen as soon as today.
Representatives from both SEIA and Vote Solar have come forth urging swift passage of the bill, despite its weaknesses. The net metering situation in the Commonwealth has become increasingly dire over the past year, stalling hundreds of projects and an estimated $617 million in economic activity.
While this bill shows positive forward momentum, it does not fully address the issues facing solar in the Commonwealth. The SREC-II program has hit capacity and hundreds of projects hang in limbo awaiting program acceptance in order to move forward. Meanwhile the solar industry stands still waiting for the next SREC program to take shape in order to continue business.