Beacon Hill negotiators reach deal on solar energy roadmap
BOSTON — Five months of negotiations resulted in a deal Tuesday between House and Senate leaders to raise the cap on the amount of solar energy that public and private customers can sell back to grid by 3 percent, while decreasing the value of the incentives for new projects.
The compromise would also allow utilities companies to petition the Department of Public Utilities to charge solar-producing customers a minimum bill to cover the cost of maintaining electricity transmission and distribution infrastructure, according to a summary obtained by the News Service.
Lawmakers have been debating the future of solar incentives for months as clean energy and solar industry advocates have ramped up the pressure to strike a deal, warning that delays were freezing an industry that employees thousands in Massachusetts.
House Speaker Robert DeLeo in recent days has talked about his desire to clear the solar issue off the Legislature's plate before embarking on an arguably more complicated debate over the state's energy future, including how to pursue renewable sources like hydroelectric and off-shore wind to replace retiring nuclear and coal facilities.
"The legislation reflects our shared priorities and will provide a path for continued solar development in the Commonwealth while also ensuring significant ratepayer savings," Rep. Brian Dempsey and Sen. Benjamin Downing, the lead negotiators of the conference committee, said in a joint statement to the News Service.
The conference committee, which was named on Nov. 18, included Dempsey, Downing, Reps. Thomas Golden and Brad Jones and Sens. Marc Pacheco and Bruce Tarr. The committee, according to a source, intends to file its report Tuesday evening with the goal of allowing it to come to the floor of the House on Wednesday for a vote.
The cap lift of 3 percent for public and private projects goes beyond the 2 percent expansion proposed in the both the House and Senate bills that were being reconciled. Advocates had expressed concern that the longer it took to reach a compromise the less impact a 2 percent cap lift would have as projects waiting for incentives began to pile up.
The conference committee also compromised on the value of the solar net metering credits moving forward. Currently, the state's net-metering program allows solar-producing businesses and municipalities to sell that energy back to the grid at retail rates. The current caps — 4 percent on private installations and 5 percent on public — are calculated as a percentage of the peak electrical usage.
The compromise bill will propose to reduce the value of those credits by about 40 percent, reducing the reimbursement price to roughly 11 cents to 12 cents per kilowatt hour compared with the 17 cents to 21 cents currently paid.
Solar facilities owned by municipalities and government entities would continue to be credited at the full retail rate, and residential and small commercial projects would also be exempt from the new incentive structure.
Solar industry advocates last week said that in the year since caps were reached in the National Grid service territory 550 solar projects had stalled and $618 million in investments were put on hold, according to the Solar Energy Industries Association. Recently, caps on net metering were also met in regions of the state served by Eversource.
Despite hitting its cap in March 2015, National Grid said recently that it still interconnected 15,000 solar projects last year and continues to receive a "high volume" of applications.
Existing solar facilities would be grandfathered, under the compromise bill, and continue to receive retail rate credits for 25 years, splitting the difference between the 30 years proposed by the Senate and the 20 years recommended by the House.
The bill also includes provisions calling on the Department of Energy Resources to encourage low-income solar projects as it works to design the next phase of the state's solar renewable energy certificate program, which is a statewide market-based program to incentivize solar outside of the net-metering system.
George Bachrach, president of the Environmental League of Massachusetts, and ELM's program director Josh Craft called the conference report a small step forward, but suggested the 3 percent cap lift could be exhausted quickly.
"If we're going to build a robust solar industry in the state and the jobs that go with it we have to keep going forward, so this is one small step, but more is needed," Bachrach said.
Craft said it ELM may try to persuade lawmakers to revisit the issue of the cap when it debates an omnibus energy bill later in the session. He also said he was concerned that minimum utility bills could "further undermine the economics for solar."
"The market likes certainty an stability and this is a pretty tentative step," Bachrach said.
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