Baker Signs Solar Law, Seen By Some As Band-Aid
Governor Charlie Baker signed legislation today ending a year-long standstill of solar projects in Massachusetts. But, the issue could be popping up soon again. Baker, a Republican, signed into law legislation that raises the solar net metering caps by 3 percent, but cuts the reimbursement rate for some solar projects. The compromise was hammered out by a legislative conference committee months after the House and Senate passed their own bills. Democratic Senator Ben Downing of Pittsfield was one of the lead negotiators.
“While there are components of the bill that I don’t like and certainly there are components of the bill that some clean energy and environmental advocates are concerned about, there are components of the bill that some business groups are opposed to because they see it as being too costly I think failing to act really threatens the leadership position that Massachusetts has taken,” Downing said. “It threatens the solar industry in this area and our ability to combat climate change.”
The legislation raises the private and public solar net metering caps to 7 and 8 percent of peak electrical usage, respectively. Net metering allows residential and commercial customers who generate their own electricity from solar power to receive a credit for the unused electricity they feed back to the grid. Caps have been hit across the state, stalling development. Ben Hellerstein is the director of Environment Massachusetts, which along with solar companies has consistently called on lawmakers to solve the solar stalemate.
“At long last, the yearlong standoff over solar power is coming to a close,” Hellerstein said. “This bill could allow up to enough solar to move forward to power 100,000 homes with clean renewable energy in Massachusetts. No doubt that this is big step forward for clean energy.”
Part of the issue was the government subsidy rates for solar projects. Utility companies said the payments were increasing electrical bills for non-solar customers and urged subsidies be reduced before the caps were raised. At a wind power forum at UMass Amherst last week, Senate President Stan Rosenberg said the legislature sent the bill to Governor Baker well after when it should have. The college provided the audio.
“Because of the conflict over the rate at which we ought to reduce the subsidizes that help stimulate the industry to allow the market to take over and eventually go down to zero subsidies because it would be totally market-driven,” Rosenberg said. “Some people wanted us to not touch any of the subsidies, they like it just the way they are. Some people wanted us to get rid of them almost completely if not completely.”
Under the legislation, new large, private solar projects would be reimbursed at 60 percent of the retail rate, a 40 percent cut. Again, Hellerstein.
“The particular impact that people might see around this is in community-shared solar projects,” Hellerstein said. “Those are very important for people who can’t put solar panels on their roof. So folks that are renters, people who live in low-income communities or homeowners who their roof has too much shade on it really rely on community-shared solar in order to access the benefits of solar power. For those people it’s absolutely essential that we fix that provision going forward.”
Residential, government and small commercial projects would be still be reimbursed at the full retail value, while existing projects can be grandfathered in for 25 years. Although the group is opposed to eliminating all solar subsidies, Associated Industries of Massachusetts says lawmakers squandered an opportunity to lower electric bills saying the legislation could cost ratepayers $8 billion over the next decade. Christopher Geehern is executive vice president of marketing and communication for the business trade group that represents 4,500 employers statewide.
“It has to do with pricing the subsidies more in line with the falling price of solar development,” Geehern said. “It also has to do with including in that changed reimbursement mechanism virtually all solar development. Part of the issue with this bill is it did in fact lower the net metering rate, but at the same time it excludes a significant number of solar developments, specifically those owned and operated by cities and towns, so the net effect really is minimal.”
Downing believes raising the caps will allow for a couple hundred megawatts of solar development with the state butting up against the caps in nine months to a year. Hellerstein says in some utility areas, like National Grid, that may come as soon as two or three months. Hellerstein says he’s surprised lawmakers did not do more to kick the can further down the road after grappling with the issue for about a year. Downing, Senate chair of the legislature’s Joint Committee on Telecommunications, Utilities and Energy tends to agree.
“I’ve worked with different groups to try and come up with a coalition to either raise the caps more significantly or eliminate the need for them altogether,” Downing said. “Unfortunately we haven’t been able to come up with a broader compromise that would create stability in the market for companies and residents to invest in solar knowing full well that there won’t be caps in the future. I tend to agree with them, but it’s a matter of winning political support. While I believe that support may be there in the Senate, it’s not yet there in the Legislature as a whole.”
Nonetheless, Hellerstein says raising the caps gets solar programs off the ground again with the hopes of continued employment for the industry’s 10,000 workers in Massachusetts.
The law also authorizes the Department of Energy Resources to create a new solar incentive program and allows utilities to petition the state to charge solar-producing customers a minimum bill for grid maintenance costs. Meanwhile, lawmakers are working on an omnibus energy bill they hope to send to Governor Baker this summer.