Solar power bill gets Baker signature, unlocking industry

Printed from:

BOSTON – Lining an otherwise barren landscape by the Massachusetts Turnpike, solar panels soak up the sun’s rays to create power and in many cases, feed the juice into the state’s electric grid. Solar “farms” seem to be popping up everywhere, powering road signs, landing on residential rooftops and even on capped landfills.

The passive generating systems have helped communities and individual homeowners gain a bit of independence from relying on local utilities for power and can lighten tax burdens as well.

But the Bay State’s tide of black silicon panels ebbed as legislative action stalled over extending the mechanism that lets owners sell their excess electricity generated by these installations to the utilities that serve much of Massachusetts. The logjam on Beacon Hill left in limbo 551 solar projects representing $618 million in investments and 241 megawatts of generating capacity, according to the Solar Energy Industries Association and Vote Solar. Both are advocates for the industry.

On Monday, Gov. Charlie Baker signed a comprise measure that promises to unleash that tide for at least another year. The bill raises key limits on the amount of power that can be sold by solar producers to grid operators while reducing subsidies for some. Producers include homeowners, private companies, community groups and municipalities.

While not everyone applauded the measure passed last week by lawmakers – the Associated Industries of Massachusetts called for a veto – most agree that it will get the industry of panel producers and installers moving again. But critics like AIM say the measure is merely a stopgap and that advocates are already clamoring for more action this year. Advocates don’t necessarily disagree.

“We definitely have work ahead to create a long-term solution,” said Hannah Masterjohn, director of policy and new markets at Clean Energy Collective, a Louisville, Colorado-based organization that has built solar arrays in central and western Massachusetts. “It’s a short-term compromise but it is a step in the right direction.”

The measure raises the limits to 7 percent of “peak electrical usage” from 4 percent for private projects and to 8 percent for public projects, from 5 percent, the State House News Service reported. It would also grandfather in already completed projects to lock in credits at retail rates for 25 years.

But the new law reduces the value of those credits by 40 percent for new commercial or community-owned projects, cutting it to the 11 cents to 12 cents per kilowatt-hour wholesale rate. Previously, the average rate was 17 cents to 21 cents.

New municipal installations and small-scale residential set ups still receive the higher rate, according to the Associated Press. But the compromise bill also permits utilities to charge a minimum monthly fee to help maintain the power grid, AP reported.

Called net metering, the technology key to the surplus sell-back system lets customers of certain utilities such as National Grid and Eversource (formerly Nstar) to feed excess electricity they generate with solar arrays for credit. These installations connect to the power grid through a meter which spins forward when the customer is taking power from the gird and backward when the customer is feeding in energy.

“Solar wouldn’t function without net-metering,” said Zaid Ashai, the chief executive of Nexamp, a Boston-based designer and builder of solar systems. “It’s absolutely a bed rock for the solar industry in the commonwealth.”

Critics like AIM, the state’s largest employer group with 4,500 members, say the current systems of subsidies that are essentially being prolonged by the new law penalizes most consumers.

“The bill will add $8 billion to the cost of energy over the next 10 years – 2 cents per kilowatt hour for residential customers and 1.6 cents per kilowatt hour for commercial and industrial customers,” John R. Regan, AIM’s executive vice president for government affairs, said last week in a letter to lawmakers. AIM urged Baker to veto the measure rather than sign it.

Since the discount cut only applies to non-municipal, commercial-scale systems, Regan said, it amounts to “a tax voted by the Legislature to fund local government.”

The new law may also put a damper on community systems that are financed by residents looking for a way to obtain the credits and tax benefits even when their property lacks enough sunny surfaces to support a solar array. Such community-owned systems would also see their discounts reduced to the wholesale rate.

At Clean Energy, Masterjohn said about 80 percent of residents in Massachusetts lack the conditions to support a rooftop solar installation, so the only way they can take advantage of the law would be through community projects.

“From my perspective the goal is for everyone in Massachusetts that pay electric bills should have the opportunity to benefit from solar,” Masterjohn said. “To make that a reality you need those projects to be economically viable.”

Regan’s organization had recommended cutting the discount to the wholesale level for all solar generators feeding their surplus energy into the grid to reduce the subsidy paid by everyone else. An oft-cited drawback to doing business in Massachusetts is electricity rates that are among the highest in the nation.

Even though current caps were reached last year for solar systems that could connect to the grid through net metering in National Grid’s service area, the utility kept allowing new residential systems to hook up, State House News has reported. It said the power company connected 15,000 solar projects to the grid last year and continues to receive a “high volume” of applications.

The solar industry has seen dramatic growth in Massachusetts, adding 4,000 jobs in 2014 alone, a 33 percent increase, according to the Massachusetts Clean Energy Industry Report. In 2014, 269 megawatts of solar-generating capacity was installed in the state, a 19 percent increase from 2013, according to the report. It said another 350 megawatts of capacity was expected to be added last year as well.

By using satellite imagery, solar designers can reduce the time to determine if an array of panels would be effective and how to align them.

“You can see how a tree that is 20 feet away from your house is going to affect and shade your roof-top solar panel 365 days of the year,” said Brad Stoler of Rayah Solar in Watertown. He said design and installation of a home rooftop system can be done in as little as three days.

The state’s support for solar goes back to the 1980s when it issued the first net metering policy to cover renewable energy systems of up to 30 kilowatts in capacity. By 1997, the cap was doubled and customers were allowed to retain credits to put against future bills.

The state has steadily increased its call for solar capacity over the years, driving a momentum that has put pressure on lawmakers to break up the legislative logjam and leading to the compromise measure Baker signed on Monday.

While not everyone connected to the issue is happy with the new law, most agree that it will help the industry get back to its rapid expansion.

“Legislation is rarely perfect,” said Masterjohn of Clean Energy. “This was a good political compromise and it’s good, it keeps the industry going.”