Massachussets fails to lift net metering caps

Across the United States, net metering is a contentious issue between utilities and solar advocates. And while many of the legal and regulatory battles are being resolved in favor of greater solar deployment, at times the need to adapt policies to the growth of distributed energy is overshadowed by larger political dysfunction.

Massachusetts was the fourth-largest solar market in the United States for the last two years, with 308 MW installed in 2014. The state has the second-highest number of solar jobs in the nation, with an estimated 9,400 employed by the solar industry.

Given its highly educated population and strengths in technology and finance, solar and other clean energies are obvious drivers of economic growth for Massachusetts. Additionally, the state has some of the highest electricity rates in the nation, and is highly dependent upon natural gas as a fuel for both heating and electricity generation.

Yet despite all of the reasons why the state’s leaders should embrace solar, an extension of the state’s net metering fell prey to politics in the Massachusetts legislature on the last day before it adjourned for the winter.

On the evening of November 18, leaders in the House and Senate failed to reconcile two bills that would have raised caps on net metering, due to irreconcilable differences. The primary problem is that the bill that passed the House the previous day contained many provisions damaging to the future growth of the state’s solar market, while raising net metering caps by a mere 2%.

This included moving PV installations from full retail rate compensation for net metering to wholesale after the state reaches 1.6 GW of installed PV, with an exemption for PV arrays smaller than 10 kW with single-phase inverters and 25 kW for three-phase.

It also included a provision for utilities to impose a minimum bill on net metering customers after 1.6 GW is reached. These are both things that utilities in Massachusetts and other states have asked for, but are usually the purview of regulators to grant, not legislators.

Finally, the bill called for an increase in the amount of solar that utilities could own. The overall effect was as though the bill had been written by the utilities themselves, and Environment Massachusetts called the bill “outrageous” and “a wolf in sheep’s clothing.”

On the following day, the Senate attempted to reconcile a bill it had passed with the House bill, by calling for higher rate of reimbursement for low income and public PV projects, and no minimum bill. The House failed to accept even these minor amendments, and the result is that no bill has been passed before Winter Recess.

“The Legislature’s failure to lift the solar caps today is a clear sign of the tremendous power that special interests like the utility companies wield in the State House,” stated Environment Massachusetts State Director Ben Hellerstein.

“The vast majority of Massachusetts residents want to bring more solar power to the Commonwealth, and more than 1,000 civic and business leaders have voiced their support for a goal of 20% solar by 2025. But even with all that support, the utilities and their lobbyists were able to block progress.”

As a result, existing caps of 4% of peak load for private installations and 5% for private installations will be kept. Caps for non-residential installations were reached in the service area of National Grid by August, and are expected to be reached shortly in the service areas of other utilities including Eversource, which serves much of the Boston metro area.

"While we appreciate the efforts of the lawmakers who worked to move this legislation, we are disappointed that a bill did not pass and that Massachusetts is leaving $200 million dollars of federal tax incentives on the table, cutting hundreds of solar jobs from the commonwealth’s economy and putting more at risk, and limiting customers’ opportunity to use solar to manage their energy costs and help to reduce costs for all customers," stated New England Clean Energy Center Communications Director Kate Plourd Johnson.

This is the second attempt to lift net metering caps and reform solar incentives in Massachusetts that has failed in the last eighteen months. In August 2014 an attempt to lift net metering caps that included changes to virtual net metering and a shift from solar renewable energy credits to block grant incentives died without coming to a vote.

Update: This article was modified at 12:00 (U.S. Eastern Time) on November 19 to include the quote by Kate Plourd Johnson.