A bold, smart step forward for solar incentive programs
At Worcester Business Journal's Massachusetts Energy Summit in September, Tim Roughan – director of energy and environmental policy at National Grid – made a strong pitch to a crowd of industry professionals looking to cash in on the state's latest changes to its energy policy that the time had come for an adult conversation about the cost of implementing all these changes.
When residential and commercial customers can offset their electric bills by installing solar panels, it shifts the unrecovered costs onto the remaining customers to pay for the ongoing upkeep of the electric grid – something the solar customers still benefit from. The latest moves by the legislature to integrate 1,600 megawatts of offshore wind power into the state's energy generation pool will also come at some premium, and for a state that already ranks in the top five nationwide for highest electricity rates, it can be a hard pill to swallow.
While it has been a national leader in driving renewable energy installations, Massachusetts must continue to reassess its programs and incentives and continue to reign in the premium cost of its clean energy programs, while still maintaining the momentum and long-term benefits. When the net-metering caps for solar installations were extended in April, it was with a less generous incentive than in year's past, reflecting the significant cost reductions solar panels have seen over the past several years. The balancing act for Gov. Charlie Baker's administration has been to wean the clean energy industry off of the most generous subsidies while still providing enough state-backing to incentivize further growth and stability.
Again, the Baker Administration appears to have achieved a prudent balance.
At the end of September, the state unveiled its latest solar incentive program, modeled after a successful program in New York. This new program would replace the SREC (solar renewable energy credit) program, get rid of the need to constantly raise the net-metering caps, and seemingly do away with the problem of large commercial installations taking up all the available incentives while offsetting a large portion of their power.
This new solar block grant program would dole out solar payments to installations based upon their size, with the largest installations getting the smallest incentives. The program also caps solar at 5 megawatts per parcel of land. It also sets the prices to be paid to the owners of the installations at fixed 10-15 year rates, lending some stability to clean energy adopters who have been forced to deal with fluctuating SREC prices. This new program will be good for businesses installing on-site solar, favoring those projects over the large, field-based commercial installations that neighbors find undesirable but that proliferate in our region.
This new block grant program will be vetted and receive public feedback through the end of October, with an eye on its adoption in early 2017. While all the details have yet to be sorted out, this program appears to be another step toward making the solar industry less reliant on government programs while still offering it an incentive to compete with the more traditional, fossil-fuel-based alternatives.
This new program still places a cost burden on ratepayers, and it will soon be time for Roughan's adult conversation on whether the state should continue to rely on utility bills – rather than taxes – to subsidize its clean energy programs. But whether that kind of conversation happens or not at the state level, the latest proposal continues to narrow the gap. The state is clearly moving in the right direction.
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