Massachusetts Governor signs net metering cap increase into law

Yesterday Massachusetts Governor Charlie Baker signed a bill into law which will increase the cap on both private and public net-metered solar PV systems by three percentage points. The law also cuts compensation for electricity exported to the grid by 40% from retail rate, but only for private installations above 25 kW.

Under the legislation retail-rate net metering will be preserved for municipal and other public installations. Systems under 25 kW are that use three-phase inverters are not affected by the caps or the new law. The legislation also includes a mechanism under which utilities can request a minimum bill, and that regulators must consider this request.

This law represents a long-awaited compromise between the solar industry, solar advocates, environmentalists and the Massachusetts Senate on one side, and a small but powerful and entrenched group of lawmakers in the Massachusetts House on the other.

Leadership of the Democratic Party in the Massachusetts House had effectively held the state’s solar market and industry hostage by insisting that an increase to the net metering caps include reductions in compensation, minimum bills and other provisions which undermined the economics of retail-rate net metering.

The new law is expected to put Massachusetts’ solar industry back to work. During the legislative impasse caps were hit in the service areas of three utilities, and multiple companies reported that they had frozen hiring as a result.

Solar Energy Industries Association (SEIA) applauded the result. “We are proud to be a part of the coalition that helped push these initiatives over the finish line and we can’t wait to start delivering again on the promise of clean air and well-paying jobs that solar energy offers,” said SEIA VP of State Affairs Sean Gallagher.

Massachusetts Governor Charlie Baker (R) used the occasion of signing the bill to push his energy agenda, which has focused more on providing long-term contracts to hydroelectric imports from outside the region than development of local solar and wind resources.

“As our administration continues its balanced approach to diversifying Massachusetts’ energy portfolio, solar development will be an integral component of our state’s clean energy future and we look forward to collaborating with the legislature on an omnibus energy bill that includes cost-effective, hydropower generation,” said Governor Baker in a press statement.

And while the legislation was supported by all main parties, this is not the end of the conflict over the future of net metering in Massachusetts. The state’s growing solar market and the number of projects in the backlog in areas where the caps were met means that these caps will likely be hit again in the near future.