New tariff, charge seen as drain on Mass. solar industry
A complex system of incentives helps encourage solar installation, and that is being upended by a pair of recent decisions, according to solar advocates hoping to spur state lawmakers into action.
Vote Solar, an advocacy group, has appealed a recent DPU decision to allow Eversource to levy a new demand charge and monthly minimum reliability contribution on new solar customers. The group also wants state policymakers to give the industry assistance to offset new tariffs the president imposed on solar panel imports.
"For now there's a lot of uncertainty," said Sean Garren, Northeast director for Vote Solar. He said, "It's kind of like a death by 1,000 cuts right now."
Nearly 19,000 workers in Massachusetts are employed by the solar industry, according to the Massachusetts Clean Energy Center's 2017 report.
The DPU-approved Eversource rates will likely drive up the cost by about $4,400 to $9,400 over the life of the solar installation, estimated Garren.
State lawmakers in 2016 specifically authorized utilities to levy a minimum monthly contribution charge for solar customers who sell electricity to the grid at above-market rates under a system known as net metering. The charges cannot "unreasonably inhibit" solar development, under the law.
The minimum charge that new Eversource solar customers will owe after it goes into effect Dec. 31 will create a "sustainable pathway to pay for infrastructure," Energy and Environmental Affairs Secretary Matt Beaton told the News Service.
"I think if you look at where they came in and where they ended up, it was a very fair decision that makes sure that we have future investment as we transition into a more distributed energy generation - renewables - over time," Beaton said.
Vote Solar contends that the charges DPU approved go beyond what was allowed under the 2016 law and Eversource never studied whether the new costs "would disincentivize the future development" of solar net metering.
Attorney General Maura Healey has also appealed Eversource's new DPU-approved rates and asked the DPU to reconsider them.
"The DPU's order would increase costs for Massachusetts electricity customers by tens of millions of dollars," Healey said in a statement. "We are appealing because customers deserve to know why the DPU chose to enrich Eversource shareholders at the expense of electric ratepayers."
The Committee on Telecommunications Utilities and Energy will hold a hearing Tuesday afternoon to look into the Eversource rates.
"Last session, the legislature decided that solar net metering customers should pay their fair share to maintain the electric grid's poles and wires," Rep. Tom Golden and Sen. Michael Barrett, the committee's co-chairmen, said in a joint statement. "But no one expected the utilities and DPU to take this minimum bill to such unprecedented lengths. There are mainstream alternatives. We want to know why the parties put these aside."
The Baker administration also riled some critics last week by jointly deciding with the state's utilities to select Northern Pass, a hydropower transmission line that is a joint effort of Eversource and Hydro-Quebec, in a major renewable energy procurement.
Two Democrats hoping to unseat Baker in November blasted the selection. Jay Gonzalez called it "yet another giveaway to the state's largest and wealthiest utility company, which has poured tens of thousands of dollars into Baker's campaign coffers," and Setti Warren called for an investigation by the Ethics Commission. Greg Cunningham of the Conservation Law Foundation said the choice "reflects a process corrupted by the heavy hand of our region's largest utility."
A protectionist stance by the Trump administration toward solar panel imports has also set the industry on edge.
The president last week imposed additional duties on major importers of solar cells and modules on a four-year schedule with the new tariff starting at 30 percent and then declining in subsequent years.
"We're protecting our panel makers because we do make panels here in the United States, and we should continue to make panels and hire more workers in the United States," said Gary Cohn, director of the National Economic Council in a briefing with reporters, according to a transcript.
While larger companies anticipated the move and likely have inventory to weather the new tariffs, smaller operations will be harmed, Garren told the News Service. The World Trade Organization governs global trade agreements, including tariffs, and the Vote Solar official expects the body will overturn the solar tariffs, which he said are unlikely to spur U.S. manufacturing of the technology.
"We think it's pretty unlikely you're going to see much of a burst of local manufacturing," said Garren, who said the tariff will drive up costs of solar installation, thereby driving down demand for new panels and harming the local industry.
In response to the recent decisions by the Trump administration and the DPU, Garren wants Bay State lawmakers to remove caps on solar net metering and invalidate DPU's recent decision.
The group's appeal was sent to the Supreme Judicial Court. Meanwhile lawmakers in the Senate are preparing to move an omnibus clean energy bill. Senate President Pro Tempore Marc Pacheco said senators plan to put together a greenhouse gas reduction bill by sometime next week.
Not everyone in the solar industry disagrees with the new tariff.
The CEO of SolarWorld Americas, which claims to be the "largest U.S. crystalline-silicon cell and panel producer for more than 42 years," had sought relief from subsidized imports of solar panels from China and Taiwan.
"We are still reviewing these remedies, and are hopeful they will be enough to address the import surge and to rebuild solar manufacturing in the United States," CEO Juergen Stein said in a statement. "We will work with the U.S. Government to implement these remedies, including future negotiations, in the strongest way possible to benefit solar manufacturing and its thousands of American workers to ensure that U.S. solar manufacturing is world-class competitive for the long term."
U.S. Sen. Ed Markey said Trump's tariff was an attack on clean energy and vowed to fight it.
"Imposing a tax on solar panels is a direct attack on hundreds of thousands of American blue-collar workers," Markey said in a statement. "President Trump's decision isn't about domestic manufacturing, it's about manufacturing an excuse to attack clean energy on behalf of Big Oil. Solar energy continues to be a bright spot in our economy, eclipsing jobs and growth in coal. The solar industry was poised to create 100,000 U.S. jobs over the next three years. We created as many solar jobs in the United States in 2016 as exist in the entire coal mining industry today. Massachusetts has led the way in driving the solar revolution and in creating good-paying jobs in installation, supporting more than 7,000 jobs."
The United States has enacted measures to protect other industries, such as shipbuilding, automotive manufacturing and energy.
Gov. Charlie Baker in September joined governors from Colorado, Nevada and North Carolina to oppose the idea of tariffs on solar components.
"The requested tariff could inflict a devastating blow on our states' solar industries and lead to unprecedented job loss, at steep cost to our states' economies," the governors wrote.
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