Massachusetts House, Senate approve bill to lift net metering caps

Late yesterday, the Massachusetts House of Representatives passed a bill that will raise the state’s net metering caps 3%, while imposing a 40% cut to surplus generation from private PV installations above 25 kW. Today, the Senate approved the legislation, which means that it will go to the desk of Massachusetts Governor Charlie Baker (R) to be signed.

H.4173 represents a compromise between Massachusetts’ solar industry, environmentalists and Senate leadership on one side, and the leadership of the House of Representatives on the other. Last fall and winter House leadership stalled action on the caps for months and produced a bill which would have dismantled retail-rate net metering.

However, a number of actions culminating in a letter by 100 members of the House calling for the caps to be raised without many of the changes in the original House bill may have finally compelled leadership to act.

Under the new regulations, municipal and other public installations will still retain retail-rate net metering, and installations under 25 kW which utilize three-phase inverters are not effected by the caps at all. However, private installations above 25 kW will suffer a 40% reduction in compensation from retail rates for generation in excess of demand, calculated on either a monthly or time-of-use basis.

This is expected to impact Massachusetts’ leadership position in community solar, but should also get Massachusetts’ solar industry moving again. Solar Energy Industries Association (SEIA) has estimated that $617 million worth of projects have been impacted by the caps, which have been hit in the service areas of three utilities.

Massachusetts currently has around 15,000 workers employed by the solar industry, mostly in deployment-related activities. This gives the state the second-largest solar workforce nationally, after California.

If signed by Governor Baker, this new legislation may allow companies to reverse the hiring freezes that many reported. However, it is only a stop-gap measure, given the strong rate of growth in the state’s solar industry, and this protracted legislative battle is likely to be fought all over again when the new caps are reached.