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Massachusetts Legislators Strike a Solar Cap Agreement

April 6, 2016

On Tuesday, leaders of the Massachusetts House and Senate reached a deal to increase the level of solar energy that public and private customers can sell back to the grid by 3 percent. Additionally, the agreement stipulates a reduction in the value of new solar project incentives. The negotiations would also give utilities the ability to petition the Department of Public Utilities to charge solar-producing customers a small amount to cover costs associated with electricity transmission and distribution.

The conference committee that headed the discussions was formed in November. It includes Reps. Brian Dempsey, Thomas Golden, Brad Jones, and Sens. Benjamin Downing, Marc Pacheco, and Bruce Tarr. After five months of talks, the committee was set to file its report on Tuesday night to bring it to the House on Wednesday for a vote.

Proponents of clean and solar energy have increased pressure on legislators to finalize a deal regarding the future of solar incentives. They argued that long delays were preventing a significant industry in Massachusetts from operating. The 3 percent cap raise surpasses the 2 percent expansion that was previously proposed by both the House and Senate. The committee hopes that the legislation will ameliorate such concerns and develop the solar industry in Massachusetts even further. Still, some environmentalists only consider the compromise to be a small step forward, and think the 3 percent cap lift could be exhausted rather quickly.

Since caps had been reached before this offered increase, 550 National Grid service territory projects and $618 million worth in investments had been halted, according to the Solar Energy Industries Association. Despite this stoppage, the industry is in high demand. National Grid implemented 15,000 solar projects last year and still receives many applications. Caps have also been met in regions of Massachusetts where Eversource serves.

The committee also settled on the value of solar net metering credits in the future. Right now, businesses and municipalities that produce solar are allowed to sell that energy back to the grid at retail prices. Caps currently sit at 4 and 5 percent for private and public installations, respectively. They are calculated as a percentage of peak electric usage. The settlement intends to reduce the value of these credits by 40 percent (from 17 to 21 cents per kilowatt-hour to 11 to 12 cents per kilowatt-hour). It is important to note that municipal- and government-owned solar facilities would continue to receive the full retail credit rate. Residential and small commercial projects would also be immune to the new proposed incentive structure.