Redesign of Massachusetts' incentive system dies in legislature, net metering caps raised slightly

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On the last day of the legislative session in the U.S. state of Massachusetts, H4185 died a quiet death in the House Ways and Means Committee, failing to make it to a vote. This was a surprising end for the high-profile bill, which was crafted in a collaboration between the state’s utilities, solar and clean energy industries and the administration of Governor Deval Patrick.

H4185 would have made a number of significant changes to state policies in Massachusetts, which is the nation’s fourth-largest solar market. These include moving the state from an incentive system based on tradeable solar renewable energy credits (SRECs) to a fixed declining block grant structure. It also would have enshrined Governor Patrick’s regulatory goal of installing 1.6 GW of solar PV in the state by 2020 in law.

“We missed an opportunity last week to really advance the ball and set an example that other states can follow to reach common ground between the utilities and the solar industry,” said Borrego Solar VP of Strategy and Business Development Dan Berwick, who also serves as chair of the Massachusetts committee of the Solar Energy Industries Association (SEIA).

One major piece of the legislation did survive, but in a greatly reduced form. H4185 would have removed the caps on net metered systems, and instead a slight increase to the caps was incorporated into a bill to include thermal technologies in state renewable energy mandates. This bill has passed the legislature and is likely to be signed by Governor Patrick.

As a result, the state’s net metering caps will increase from 3% of peak load to 5% for public installations, and to 4% for private installations. This will free up public installations in the service areas of utilities that have already hit the caps.

New England Clean Energy Council (NECEC) says that this was a critical move. “We expected to hit the other caps by the end of the year,” notes NECEC VP of Policy and Government Affairs Janet Gail Besser. This is the fourth time that Massachusetts has raised its net metering caps.

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Both Besser and Berwick note that the bill was introduced late in the legislative session, and that due to the complexity of the changes legislators were not able to come to a clear understanding of the bill in time. “There was a lot there for the legislature to digest quickly, and I think the same was true of the solar industry,” notes Berwick.

And while H4185 was backed by the three major organizations representing the solar industry in New England – NECEC, SEIA and the Solar Energy Business Association of New England (SEBANE), it suffered from dissent within the solar industry.

H4185 would have put limits on virtual net metering for solar as well as changing the basis of incentives in this sector, and a limited number of solar companies and individuals fought against the legislation on this basis. In an article published in Renewable Energy World, Sam Rust of SRECTrade claimed that H4185 would “destroy community solar potential in Massachusetts”.

NECEC says that the bill contained provisions to enable community solar, and also notes that H4185 would have stopped the issuing of new SRECs in Massachusetts, which would have impacted SRECTrade and other SREC brokers. SRECTrade in the past has also submitted comments arguing against a proposal for a feed-in tariff in Massachusetts.

While H4185 did not pass, the process of reforming Massachusetts’ solar policies is not over. The legislation which increased the net metering caps will also create a 17-member task force to study the state’s incentive programs and net metering policies. “Even though (H4185) didn’t pass I think we have something that we can work with going forward,” notes Berwick.

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