3 Oct

Solar Net Metering and National Grid in Massachusetts

The Massachusetts State Legislature recently enacted amendments to House Bill 1835 which effectively raised the net metering cap from 3 to 5 percent of peak historic electricity demand for the public sector and from 3 to 4 percent for the private sector. For the short term, this is very good news for the Massachusetts solar industry. The last minute legislation salvaged the momentum for solar development in the state, which would have been halted if the previous caps had been breached. This was very close to becoming a reality in the public sector.

The legislation also establishes a 17 member task force to review the state’s net metering laws and provide recommendations for a long term policy to address issues supported by both sides of the policy debate. The task force, which includes representatives from the state legislature, the Department of Energy Resources (DOER), Massachusetts National Grid / other utilities, and solar industry representatives, is charged with making recommendations for a comprehensive policy by March of 2015.

The eleventh hour action transpired as a negotiated settlement between solar energy supporters who desired a complete lifting of the net metering caps and the utility companies led by National Grid who had submitted their own legislation. The proposed bill SB1030 could have had detrimental repercussions on the on-going expansion of solar development activity in the state and is apparently consistent with other efforts driven by the Edison Institute,  National Grid and other utility companies who are trying to water down net metering legislation throughout the country. Fortunately, these efforts, to date, have not been successful in other parts of the U.S.

Considering the magnitude and complexity of these policies, it is fortunate that the task force has a head start. Working with a panel of experts, the DOER has already initiated a policy review that has included an extensive public involvement process and has formulated recommendations that reasonably consider the issues raised by proponents on each side of the net metering law. On one hand, the policy framework lifts the net metering cap requirement completely. On the other hand, recommendations are sensitive to rate payers whom National Grid and other utility companies claim bear an unfair burden in supporting the cost of operating and maintaining the electric distribution system. This is accomplished by establishing a minimum utility charge for all net metered rate paying customers. These policy recommendations, among others intended to stabilize the market, are critical to the future of the solar industry in Massachusetts. Already faced with the reduction of the 30% Federal Investment Tax Credit in 2016, local and state policies will have a significant impact on the financial viability of the future of the solar industry.

The task force is scheduled to convene this month to begin deliberations on the net metering law. The results of their efforts will establish the framework for future solar development activity. The outcome will likely have additional repercussions as other states consider their renewable energy policies. Fortunately, Massachusetts has a good track record of creating policies that support growth in the solar industry. Because of its renewable energy policies, Massachusetts has become the country’s fourth leading state for solar energy deployment, despite less than favorable geographic and atmospheric conditions and the opposition of investor owned utilities like National Grid.

Kurt Easton

Kurt Easton

As a Managing Partner of Clean Footprint and professional Urban Planner with over 25 years of consulting experience, Kurt has an extensive background in both public and private sector initiatives. His experience provides valuable insight into public/private negotiations for renewable energy development. His network of municipal contacts through the Florida Redevelopment Association and Florida League of Cities enables direct access to decision makers for the successful development of solar PV projects throughout the State.Contact Kurt at kurt.easton@clean-footprint.com.