Yesterday, the Senate passed a climate adaptation planning bill by a roll call vote of 37-0 with 1 abstention. Notable among the amendments to the bill was an extension of solar net metering for investor owned utilities. This amendment was adopted without objection. The bill now moves to the House of Representatives where its prospects are unclear.
Under solar net metering, solar installations can sell any power that they don’t use on site back to the grid at or near retail rates. There has been considerable controversy about solar net metering — a recent task force on solar incentives was unable to reach consensus. Some argue that net metering gives solar energy an unnecessarily deep subsidy. Others argue that it fairly compensates people and companies who invest in solar panels for the benefits that they provide to the grid and the environment.
The issue has been divisive in Belmont which is a municipal utility and therefore would not be affected by the new legislation. My family installed solar panels in 2010. When the controversy about solar net metering policy arose in Belmont and some asked me to become involved, I sought advice from the Ethics Commission about possible conflicts of interest. The Ethics Commission advised me that I should not participate in the debate about Belmont’s net metering policy. That does not prevent me from taking a position on statewide solar policy, which is a general as opposed to “particular” matter.
Having gone through the solar installation process, I have developed a personal feel for the deep subsidies that solar receives, among which net metering is actually the least significant: The federal tax credit (at 30% of installation costs) is the largest, followed by the ability to sell Solar Renewable Energy Credits. SRECs are a way for utilities to meet their obligations under the Renewable Portfolio Standard. The RPS, which we strengthened by legislation in 2008, requires utilities to purchase a portion of their power from renewable sources. The SREC market is an artificial market run by the state in which utilities can purchase credit for renewable energy production and apply it to their RPS obligations without actually purchasing the power. In effect, it gives utilities RPS credit for subsidizing solar installations. The SRECs vary in value, but are on the order of 25 to 50 cents for every kilowatt hour produced whether used on site or sold back to the grid. Net metering only applies to the power sold back to the grid and is on the order of 10 to 20 cents per kilowatt hour.
The larger debate at the state level concerns the Solar Renewable Energy Credits as well as net metering. While it is appropriate for solar to receive some form of subsidy to reflect its low carbon impact, well-informed economists debate the appropriate magnitude of that subsidy with great passion. I have been agnostic and have been waiting for a full legislative debate on the issue before settling on a position.
The language we approved yesterday came forward without the chance for full vetting. Since it did not come out of the committee process, but surfaced directly on the floor, we have no feel for whether the House will consider it at all. It serves effectively as a statement of Senate interest in resolving the issue and an offer of a direction.
In substance, the measure extends the availability of net metering for investor owned utilities on a statewide basis until the state reaches its stated goal of 1600 megawatts of installed solar capacity. Previous formulations of net metering policy applied within utility territories and were expressed as a percentage of power consumption. The new framing is a simple statewide cap. Additionally, the legislation directs the Department of Public Utilities to, by regulation, create a new subsidy regime (addressing the future of both SRECS and net metering) to take effect after the 1600 megawatt cap is reached.
The Senate was eager to move this issue forward in part because some areas of the state have reached their current cap and solar installations are at risk of losing the federal subsidy which is currently set to expire at the end of next year.
To be fair, the only entities which argue that NM “gives solar energy an unnecessarily deep subsidy” are National Grid, Eversource, and AIM. They have provided no credible evidence to date. They were the minority vote on the MA Legislature’s Net Metering and Solar Task Force(tinyurl.com/qzbqo8d). The remaining 7 NMSTF members voted in favor of lifting the caps based on the strong and overwhelming evidence (acadiacenter.org/document/value-of-solar-massachusetts)
Mass. Solar Owners Association (MASOA) has advocated the lifting of the cap for some time, and keep in mind, the utilities even agreed just last year (H4185) to lift the NM cap. Even if we get to 1600 MW, thats less than 10% of the total electric load, we need to get to 3200 MW or more to reach the goal of 20% renewable by 2020. Net Meter cap has been the stick the utilities have used to continue to resist changing their business model, simply put, they must evolve to decentralize the grid and encourage renewable investment, or we must divest ourselves of them. Keep in mind that SREC has only been offered post 2010. For many of our members, myself included, Net Meter revenue is our primary source of return, and why should we not be paid fairly the power we produce, usually at peak demand, and sold to our neighbors at a higher price. MASOA strong suggested the Solar Task Force consider a Value of Solar Study as part of their report and recommendations … didn’t happen. Perhaps because when Maine did it, they found solar PV was worth 36 cents kW! As far as subsidies are concerned, fossil fuels continue to get on par 70 to every one subsidy for renewables, not to mention the cost of war and environment damage not priced into a gallon of gas or oil. AND yet here is DeLeo and Baker ready to shut down future solar investment because they would rather protect their utility donors who make ridiculous statements that they are protecting ratepayers in favor of increasing our dependence on fossil fuels via new larger fracked gas pipelines with no regard for our environment or the future health of our children. Senator Brownsberger, MASOA thanks you for your support, and so do our children!
As a strong proponent of any and all legislation that increases the development of fossil-fuel-free infrastructure, and to empower individuals to do for the environment/climate those things that most governments refuse to do, I strongly urge you to fight for the most generous subsidies possible for renewable energy initiatives. Thank you for caring!
Hi Will, I know you support the state RPS/REC program and your question, I imagine, is how much of state ratepayer subsidies should go to out-of-state wind providers (more efficient carbon reduction) or in-state solar providers (somewhat less efficient carbon reduction but directly supporting Masschusetts businesses, Massachusetts residents, and the Massachusetts economy.)
The issue, to me, however is that, in my opinion, you live in a town— Belmont–and represent a town with fundamentally irresponsible policies. Belmont’s utility does not buy RECs of any kind and Belmont ratepayers do not subsidize renewable energy of any kind. The state, for political reasons, may want to skirt around this issue and not do anything about it, but I live in Belmont and it matters to me. Why the munis, who buy no SRECS or RECs, would want to be the first to walk-back netmetering baffles me. I don’t think netmetering should be the solar tariff forever but I trust the state a lot more than I trust the munis to figure out when to scale it back.
I really think the time has come, Will, for the state to do something about the munis’ irresponsibility (I’m assuming most of the munis are like Belmont and do not buy RECs or SRECs). If the state doesn’t directly regulate them, then at least the state can encourage them (through financial incentives perhaps) to start subsidizing renewable energy in New England.
Duly heard and noted.
We installed a PV system a year ago taking advantage of the Solarize program in Watertown. So, we are in an investor owned utility’s territory. I am just getting up to speed on this issue in MA in a round about way because I had been following what happened in Nevada with their net metering program – which on the surface appears to be influenced by IOUs with close ties to certain members of their legislature (including their governor). I am surprised and disappointed to hear similar considerations are being made here in Massachusetts.
So, like Nevada, it sounds like the MA Senate is trying to create policies that retroactively financially hurt those who have taken advantage of the programs promoted and supported by the state government (i.e. via the Green Communities Act). My understanding is that the Senate version of the bill will reduce the price of the homeowner’s renewably generated electricity from the current $0.18/KWh reimbursement to as little as $0.04/KWh by IOUs. The reimbursement for SRECs in the SREC II program are much closer to $0.25/KWh (ours is $0.28/KWh). Also, SRECs expire after 10 years after installation of a PV system – unless legislation changes this as well.
As mentioned above, the biggest source of subsidy is from the federal government via the tax credit which has just been renewed; but will still be sunset eventually with progressive reductions in the rebate over time. Why would the state want to institute a policy that will help private utilities at the expense of homeowners who have effectively financed (with most subsidy not coming from the state) a cleaner, more reliable, decentralized source of electricity for the Commonwealth?
Also, those of us who do have solar panels, still pay the utilities a distribution fee, based on the electricity we consume via the grid, even when we produce more than we consume. This fee is deducted from the net metered sum each month. I assume that this is to cover maintenance of the grid which we still do rely upon. If the issue is that this fee is too low, one would have to ask why this hasn’t been brought up during the utilities negotiations with state regulators when the rates for everyone were reviewed.
I still do not understand how the utilities are harmed by this program. Their profits appear to be still be good.
I believe you are referring to the House proposal at the much lower rate. Solar advocates were pleased with the Senate proposal. Ultimately, there will be an outcome that is somewhere in the middle.
Check out this post about what we’ve done with my house. if you want to get a sense of my values on this issue.