Boston – In response to Western Massachusetts alternative energy advocates, the state Senate has voted to raise the state cap on credits for solar producers who feed the power back into the grid. The legislation is now in the hands of the House of Representatives.
Known as net metering, the system allows producers of electricity from photovoltaic arrays to sell energy back to utility companies.
Crafted by State Senator Benjamin B. Downing (D-Pittsfield), the amendment, part of a bill to address climate change, would lift the cap from 800 megawatts (MW) to 1600 MW, the state’s solar production goal set by former Gov. Deval Patrick. If the 1600 MW target is reached, Downing’s legislation stipulates that the Department of Energy Resources (DOER) would create a new solar incentive program, and grandfather-in existing projects to continue.
Public and private solar projects in towns in the Berkshires served by National Grid were thwarted in March when the cap was met. Downing, who for three terms has served as Senate chair of the Joint Committee on Telecommunications, Utilities and Energy, said in a statement that his amendment “sets up a long-term framework for solar development…while allowing for continued development prior to the expiration of the Federal Solar Tax credit on December 31, 2016.”
Not surprisingly, National Grid does not like this legislation. National Grid’s Massachusetts President, Marcy L. Reed, said in a statement that the company was “supportive of efforts to address climate change,” but that increasing the caps will plop “hundreds of millions of dollars” onto the bills of non-solar customers.
Reed noted that electric bills are going up over the next five years to the tune of $1.5 billion, even without a raised net metering cap.
National Grid recently got high national rankings for the amount of solar it feeds into its system.
Associated Industries of Massachusetts has also complained. AIM called last year’s effort to raise the caps a “back room solar subsidy.”
“A rush to pass this legislation will touch off a firestorm of criticism from a business community forced to pick up the tab for a poorly conceived and economically destructive program,” wrote Robert A. Rio, AIM’s Senior Vice President and Counsel, Government Affairs.
“What they are doing is only looking at the costs of solar without considering the benefits that it brings,” said Ben Hellerstein, state director for Environment Massachusetts. “Solar power has the potential to make electricity less expensive for everybody because it produces electricity closer to the place where it’s actually needed and it avoids the need to invest in expensive transmission infrastructure.”
Hellerstein added that solar energy is more productive when demand is highest, and on “these hot days, when everyone is using their air conditioning, the more we feed solar power into grid avoids the need to use the oldest and dirtiest source.”
Environment Massachusetts reviewed 11 national studies. Eight showed that “utilities were likely underpaying solar panel owners, not subsidizing them.”
The other three studies were paid for by utility companies, Hellerstein said.
Local solar producer Kirt Mayland buys land and installs panels, then sells the power to towns or school districts, saving them thousands in electricity costs. Mayland says he does well in Massachusetts, where he makes more money on his power compared to other New England states. He says this allows him to spread the benefits.
“We can offer towns more tax revenue – we don’t just run to the bank,” he said.
Indeed, both Great Barrington and its school district, Berkshire Hills Regional, are about to save thousands every year in electricity costs when Mayland’s solar installation at the old Rising Mill site in Housatonic is completed, possibly by November.
In addition, the town will reap thousands in annual taxes from that land, a brownfield.
Mayland says his work involves complex timing as he navigates through regulatory mazes, with different rules at every turn.
“I sit up at night and worry about deadlines for all agencies and utilities. The bureaucracy of this current Massachusetts program is unbearable.”
“It’s a system that’s grossly out of whack with pricing,” Mayland added. “It’s a really difficult system for people like me to maneuver through because of different rules from different agencies.”
But Mayland said that watching the caps is also part of his job, and he had little sympathy for producers, now upset about smacking into the cap ceiling in March, who came rushing to Western Massachusetts to snap up land without studying the caps.
“It was like a gold rush,” he said. “But you just spent $20,000 on consultants and didn’t bother to know the rules? It couldn’t have been more transparent. I was watching those caps every day.”
Solar advocates say caps should be eliminated altogether, in part, to continue to fuel the industry’s job growth. Clean energy is a fast-growing part of the state economy, according to the Massachusetts Clean Energy Center. The state’s overall percentage of electricity generated by renewable energy is also growing.
Net metering caps will stifle it all, solar advocates say.
“We really don’t need any caps,” Hellerstein said. “There’s no technical or scientific reason why we would need to put a limit on solar power, certainly not at the level we have.” He said that it was possible that at higher levels of generated power, “adjustments to the system may be needed.”
“The caps are there because the utility companies have insisted,” he added. “Solar is a threat to their way of doing business, so they’ve decided to do everything they can to try to stop solar.”
Gov. Charlie Baker’s administration appears to be siding with the utility companies. In its April report to the legislature, it’s Net Metering and Solar Task Force said it “does not support raising the net metering caps in the short term absent a long-term sustainable solution.”
“The program must reconcile two competing interests.”
The administration says it’s about to file legislation that will do just that; an announcement is forthcoming in the next week or so.
“It’s a good sign that they are engaging on this issue,” Hellerstein said. “They seem to have an appreciation for just how urgent this is.” He said he looked forward to seeing the legislation.
The Governor’s office, however, did not respond to questions about why net metering caps were necessary at all.
Like Hellerstein, Mayland thinks he knows why there are caps. “The utilities can’t control us — they just take what we put out on the lines. It makes it a little bit more difficult to manage. So you can see them trying to limit solar a little bit until they get a grip on it. There probably shouldn’t be caps unless the utilities have a sound engineering reason to want to limit the amount of solar on their lines. With a proper set of rules in place there should be no limits.”
It raises the question of who will make that “proper set of rules.”
“The problem is, it’s politics,” Mayland said. “And the net metering system is the product of the Legislature. Everything has to go back to the Legislature.”
