BOSTON — A year after a Massachusetts utility first hit a cap on the reimbursements paid to solar energy producers, Gov. Charlie Baker on Monday signed a law to lift the cap.
“This legislation builds upon the continued success of the Commonwealth’s solar industry and ensures a viable, sustainable and affordable solar market at a lower cost to ratepayers,” Baker said in a statement.
Secretary of Energy and Environmental Affairs Matthew Beaton said the new law will allow for more solar development while reducing costs to ratepayers.
The new law was the result of a compromise bill crafted during five months of negotiations between the House and the Senate. The final result is still only a short-term fix. It has drawn some concerns both from sides – the solar energy companies and the utility companies, who have been battling over this issue.
But lawmakers said the compromise bill was the only way to allow solar projects to continue being built in Massachusetts for at least another year while lawmakers and the administration continue to consider what incentives are necessary in the long term to keep the solar industry growing while not over-charging other electricity ratepayers.
“I believe this compromise, while not perfect, while not ideal, is an important step to keep solar working in Massachusetts,” State Sen. Ben Downing, D-Pittsfield, chairman of the Joint Committee on Telecommunications, Utilities and Energy, said during Senate debate on the bill last week.
Net metering is the practice by which someone can generate solar energy and receive a financial credit for energy they generated but did not use. Each utility has a cap on the amount of projects that can receive reimbursements in their area. The cap applies to large-scale projects, not small residential ones.
The new law will lift the cap by 3 percent for public and private projects, which are projects owned by both governments and businesses. Lawmakers and solar advocates say this is likely to let new projects go forward until 2017, when the cap is expected to be hit again.
At the same time, the new law will lower the reimbursement rate by 40 percent for most new projects from the retail rate, which has recently ranged from 17 cents to 21 cents per kilowatt hour, to 11 or 12 cents per kilowatt hour. This addresses concerns by the utility companies that the subsidies given to solar projects are too expensive and other ratepayers are paying the price.
Projects owned by governments and municipalities and small residential projects would still get the full retail rate. Existing projects that are already connected to the grid would be grandfathered in under the old rate for 25 years.
The bill would allow the Department of Energy to charge customers a minimum monthly bill. It directs the Massachusetts Department of Energy Resources to craft a new version of an incentive program referred to as SREC in a way that provides a financial incentive for low-income solar projects.
State Rep. Brian Dempsey, D-Harverhill, chairman of the House Committee on Ways and Means and one of the bill’s negotiators, said the bill “represents a balanced approach that will not only allow solar energy to remain a key piece of the state’s energy portfolio, but it will also reduce costs borne by ratepayers by 40 percent.”
Now that the net metering issue has been solved, energy advocates will be turning their attention to the Department of Energy Resources, which is crafting the next SREC program.
The financial incentive program SREC, an acronym for Solar Renewable Energy Certificates, provides credits that solar system owners sell to electricity suppliers to fulfill the suppliers’ requirement under state law to generate a certain percentage of electricity from renewable energy sources. In February, SREC reached its cap for large solar projects. So no new projects have been able to get the financial incentive until the administration creates a new version of the program. This would be the third iteration of the incentive program. It is expected to reduce the incentives as the solar industry has matured and the technology has become more cost-effective.
The Department of Energy Resources on Friday released emergency regulations to allow projects to move forward in the interim before the guidelines for the new incentive program are written.
Lawmakers will now focus on crafting an omnibus energy bill. That bill is likely to focus on increasing the use of hydropower, which has been one of Baker’s priorities, and of offshore wind.
House Speaker Robert DeLeo, D-Winthrop, said he feels confident that lawmakers will release an omnibus bill, likely in time for it to be debated in May and passed before the session ends in July. “I’m confident that we’ll get it done and quite frankly, we have to get it done,” DeLeo said.
Source :- http://www.masslive.com/politics/index.ssf/2016/04/gov_charlie_baker_signs_solar.html