House solar bill draws shade from industry

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STATE HOUSE — House leaders have crafted a modest proposal to lift the cap on solar net metering in an effort to break a logjam of stalled solar projects across many parts of the state, teeing up the long-awaited legislation for a debate on Tuesday and drawing sharp criticism from solar advocates.

The cap on the amount of public and privately generated solar power that can be sold back to the grid at retail rates would be expanded by 2 percent for both categories under a bill House leaders intend to put on the floor for a vote on Tuesday.

The House Ways and Means Committee on Monday evening began polling on the solar net metering bill (H 3854), giving committee members until Tuesday at 10 a.m. to vote. The cap lift recommended in the bill mirrors legislation filed earlier this year by Gov. Charlie Baker that also recommended a 2 percent increase, but represents a significant downsizing from a proposal floated weeks ago by House leaders to expand the cap to 2,400 megawatts.

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 public installations and 5 percent on private – are calculated as a percentage of the peak electrical usage.

“We’re just looking to continue the growth of solar,” said Rep. Thomas Golden, the House chair of the Telecommunications, Utilities and Energy Committee. “We’re doing another omnibus piece in February or March of next year. This particular piece is about moving solar forward and changing up some of the programs, but it’s definitely – this is not the last opportunity here.”

The bill would also set criteria under which the Department of Public Utilities shall consider allowing utilities to charge solar-producing customers a minimum bill to help offset the cost of electricity transmission and distribution. The bill directs the DPU to approve a minimum bill that “does not excessively burden ratepayers” or “inhibit the development” of solar generation.

Golden said that language was added so that utilities could not charge a minimum bill “so overwhelming” that it might slow the growth of the solar industry in Massachusetts.

“It’s in there to ensure that any minimum charge, although it needs to be there for the protection of the grid as a whole, we have to make sure it doesn’t slow the growth. So that’s a real opportunity for everyone to look at what solar brings to the table,” Golden said.

Solar advocates have held rallies in recent days urging the House to act before the winter recess on legislation to significantly lift the cap on solar net metering, while utilities and some business interests have opposed what they see as a lucrative, unnecessary subsidy for the solar industry.

Sean Garren, northeast regional manager for Vote Solar, panned the House bill on Monday night for not going far enough to expand incentives that will encourage future growth in an industry that employs an estimated 12,000 workers in Massachusetts.

“The sun is setting on solar development in Massachusetts and, with this bill, Speaker (Robert) DeLeo and the House leadership are blocking a brighter tomorrow – at the expense of our economy, our resiliency and our future,” Garren said in a statement to the News Service. “This redrafted bill offers a little to address our immediate solar crisis, but sounds the death knell for consumer solar investment in the long term. We hope members of the House will reconsider this step backward and support solar in Massachusetts with a workable solution.”

Under the House’s proposal, all public and private solar projects built before the state hits its goal of 1,600 megawatts of installed solar capacity by 2020 would be eligible for net metering reimbursements for 15 years from the date of interconnection with the grid at retail prices, while projects built later would be reimbursed for power at wholesale rates.

House leaders are also recommending that the Department of Energy Resources develop a new solar incentive program to replace the current system of net metering and solar renewable energy credits after the state reaches the 1,600-megawatt target. The new incentive programs should take into consideration both the value and cost of developing solar power, according to officials.

Fred Zalcman, managing director of external affairs at the renewable energy company Sun Edison, said the House bill represents what could become “the most regressive net metering policy in the country” with its provisions for minimum billing and the drop-down to wholesale reimbursement rates for all projects after 1,600 megawatts.

“It’s quite alarming from our perspective,” Zalcman said. “Although we’re grateful to the House for trying to move legislation before the end of the session, in terms of the objective of raising the caps it’s really too little and only addresses the projects on the waitlist but provides no runway for projects in the spring. Essentially, it stops the market.”

Zalcman estimated that the additional 2 percent capacity under the cap would be used up by spring of next year, accommodating mostly projects already in the pipeline and maybe an additional 50 megawatts of public and private solar development.

“We’d be back in the same position,” Zalcman said.

The push to lift the cap temporarily to help the state meet its solar installation goals comes as Gov. Baker and lawmakers are also looking to ensure that Bay State residents and solar developers can continue to take advantage of the federal solar tax credits that are due to expire at the end of 2016.

The Senate in July, led by Sen. Benjamin Downing, passed a climate change adaptation bill that would lift the solar net metering cap to 1,600 megawatts, lining up the program with the state’s goal for solar power capacity rather than basing it on a percentage of peak power demand.

House officials said Monday evening that the 2 percent cap lift would get the state close to 1,600 megawatts, and noted that residential solar installations have never been capped and would add to the total capacity.

Neither the Senate’s nor the governor’s bill addressed minimum billing, and it remains to be seen whether with just two days left until the end of formal sessions for the year an agreement can be reached in time to send a bill to Baker’s desk.

“I think this is something everyone can get behind and we can move one step closer,” Golden said, adding he didn’t know firsthand how the bill would be received in the Senate. “This is trying to push the agenda of clean energy and I think we should come right back at this early next year, which may answer any other questions or ideas that people have.”

— Written by Matt Murphy

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