James Dumas, Solect
Energy

A year of solar turmoil came to an end in April, as two pieces of policy granted the Massachusetts solar industry the ability to get back to work. The first piece of legislation came out of the state legislature, addressing the net metering caps that have been limiting solar development for over a year. The second was an announcement of emergency regulations from the Department of Energy Resources (DOER) that extends the previously oversubscribed SREC-II program to completed and qualified projects until January 8, 2017. These two policy changes, made less than a week apart, are a huge lift to the solar industry and its thousands of potential customers who have been in limbo during legislative inaction.

Net Metering Regulations: Resolved through An Act Relative to Solar Energy Net metering is the mechanism through which solar array owners are fairly compensated for the excess electricity generated by their array and then transferred into the electrical grid. Utilities in Massachusetts are only required to compensate solar producers for a limited portion of total energy generation; a capped percentage of peak energy demand. The capped incentive prevented thousands of solar projects from moving forward.

After months of review the net metering issue came to a conclusion after governor Baker signed into law solar legislation which addresses the net metering caps that have been hindering the solar industry. A compromise bill – the result of 5 months deliberation from a State House and Senate conference committee – increased the net metering caps by 3% statewide, effective immediately. The bill also instructs the DOER to begin formulating a new SREC program (SREC III) to replace the over-subscribed SREC-II program. Finally, the bill outlines two new measures that will be enacted once the state achieves the Renewable Portfolio Standard (RPS) goal of 1,600 megawatts (MW) nameplate solar capacity; a 40% reduction in the net metering credit value for private solar installations over 25 kW in size, and authority for utility companies to charge customers a minimum fee each month regardless of excess net metering credits.

SREC-II: Resolved through emergency regulations announced by the DOER. The SREC-II program was designed to incentivize solar development to reach the Commonwealth’s RPS goal. The program issues Solar Renewable Energy Certificates (SRECs), which are financial incentives based on the amount of solar energy a system generates.

On Friday, February 5, the DOER announced that the SREC-II program had been fully subscribed, causing solar development in the state to come to a screeching halt, as both Massachusetts incentive programs had now hit their limits. Taken off-guard, the solar industry all but stopped in the state.

To the relief of many, on Friday, April 8, the DOER released emergency regulations to “address market uncertainty and establish a smooth transition from SREC-II to the next incentive program.” Under the emergency regulations, the DOER will grant SREC-II incentives to any project that is completed (constructed and having received certificate of completion) and granted authority to connect by January 8, 2017. This announcement singlehandedly put megawatts of solar projects back on track in the Commonwealth.

What does this mean for the industry and its customers moving forward? Solar companies statewide are looking at the next nine-months as a “solar racetrack,” ready to install and ensure customers benefit from current net metering and SREC-II incentives. If you are looking to go solar, there will never be a better time!

The solar industry is here to stay. A few short months ago, the federal government reinforced its faith in the solar industry by extending the Investment Tax Credit through 2022. It’s also estimated that roughly 20,000 MW of solar capacity is expected to come online over the next two years, doubling the country’s existing solar capacity, while in Massachusetts alone solar installations have grown 200 times since 2006. The success of solar in Massachusetts and across the country suggests only an upward trajectory for solar growth; however, we know that current state incentives will likely decline in value as solar becomes more widespread and the state reaches its renewable energy goals. It is clear that solar incentives in Massachusetts are at their peak, and there is a limited timeline. An experienced solar developer can take you through the process and ensure you are able to take advantage of the best solar incentives Massachusetts is likely to have, while there is still time.

James Dumas is founding principal and chief operating officer of Solect Energy in Hopkinton, Mass.