Massachusetts DPU (finally) issues SMART program order

Massachusetts solar

During Solar Power International last week, the Massachusetts Department of Public Utilities (DPU) issued an Order approving compensation for owners of new solar projects under the Commonwealth’s Solar Massachusetts Renewable Target (SMART) program. The approval is the final regulatory step in launching the program that is required by bi-partisan legislation signed by Governor Baker in 2016.

Massachusetts solar advocates have been waiting patiently for this moment to start moving on projects that have been stalled while awaiting the order.

“Today’s decision allows community solar to move forward and expand access to the 75 percent of residents in the Commonwealth who can’t place solar on their roofs,” said Brandon Smithwood, Policy Director for the Coalition for Community Solar Access. “We will continue to work with the Baker Administration to ensure the SMART program delivers on its promise of making affordable local community solar available to all residents and businesses who want it.”

“The release of the SMART Order from the DPU, and the program’s implementation, will help get the Massachusetts solar market moving again,” said David Gahl, Director of State Affairs, Northeast for the Solar Energy Industries Association (SEIA). “Although we are still reviewing the Order details, we are pleased to begin this new chapter. We look forward to working with the Baker-Polito Administration to help Massachusetts reclaim its place as one of America’s leading solar states.”

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“After many delays, this order from the DPU will help solar energy regain momentum across the Commonwealth,” said Mark Sylvia, President of the Solar Energy Business Association of New England. ‘“As always, details matter; we are still reviewing the specifics, but are encouraged by this critical step in putting the Massachusetts solar industry back on track through the SMART program.”

The SMART program, issued through DOER regulations in August 2017, provides compensation for all new solar projects under 5 MW in size in the investor-owned utilities service territory. The program differentiates specific compensation in terms of size and type of solar installations and for the first time in the country provides a specific incentive to pair new solar projects with storage.

“The SMART program is designed to encourage appropriate siting of solar projects by incentivizing projects on rooftops, parking lots, and landfills,” said Energy and Environmental Affairs Secretary Matthew Beaton.

What’s next?

Under the order, DPU rejected the distribution companies’ proposal for a cap that would have limited the amount of bill credits that individual customers could receive under community solar projects. DPU also rejected the distribution companies’ proposal to allow costs to be recovered through a fixed charge, instead requiring all ratepayers to contribute to costs through a volumetric charge as requested by many stakeholders and lowering the cost of the program for residential ratepayers.

“There is an opportunity to capitalize on the benefits of energy storage when paired with renewables and this program is designed to accomplish that,” said Department of Energy Resources Judith Judson. “Finding ways to reduce our peak demand and integrate more renewable energy is a top priority for this administration and utilizing solar paired with energy storage in addition to our energy efficiency programs is essential to lowering energy costs and emissions.”

“The SMART program tariff will provide more competitive incentives to solar developers and result in ratepayer savings compared to the existing solar incentive programs,” said DPU Chairman Angela O’Connor. “As solar costs stabilize, it is essential that both solar customers and ratepayers yield continued benefits for this growing clean energy resource.”

The department estimates the program will save ratepayers an estimated $4.7 billion over current programs, while promoting solar development through an incentive paid directly by the utility company to the solar generation owner. With the additional 1,600 megawatts (MW) of installed solar to be supported as a result of the SMART program, approximately ten percent of the Commonwealth’s annual electricity needs will be met by solar resources.

In a promotional email sent shortly after, Beaumont Solar noted that under SMART, its rooftop customer will be cashflow positive day 1 with or without tax incentives. For a 40,000 square foot roof that can fit a 350kW system, you can expect to see:

• Net income of $38K/year without any tax incentives (especially great for nonprofit organizations), or

• Net income of $60K/year with tax incentives.

— Solar Builder magazine

Massachusetts bill passes to stop Eversource demand charge but doesn’t address net metering

massachusetts solar storage goals

Not sure how many more times I can use this photo.

Massachusetts lawmakers passed An Act to Advance Clean Energy yesterday that will pretty much do what it says, with one really important victory for the solar industry, and one potential setback. The victory was a call for Eversource to revise the demand charge it tried to impose (this was the main focus of the legislation heading in).

“Thank you to lawmakers in the House and Senate for acting to reject anti-consumer demand charges and ensuring homeowners and residents can continue to invest in solar energy,” stated Evan Dube, a Senior Policy Director with Sunrun and spokesperson for The Alliance for Solar Choice. “Massachusetts has become the latest state to stop mandatory punitive demand charges, which have been rejected virtually every time proposed across the country. State policy-makers showed tremendous leadership to maintain fair, commonsense billing methods that are good for consumers and support the growth of solar in the state.”

Notably absent from the revise legislation was anything about raising the state’s net metering cap. This concerns a bunch of solar advocates in the state because it has been nearly two years since the net metering cap for private and community shared projects in National Grid’s service territory was hit, and now caps have been hit in two other utility service areas slamming the brakes on hun-dreds of solar projects in 230 cities and towns.

RELATED: The end of net metering? Report sums up movement to new solar compensation plans

Adding to this issue is the uncertainty around the start and details of the state’s new incentive program – the Solar Massachusetts Renewable Target (SMART) Program, which will now be the only driver of market growth for the solar industry, leaving some municipal and business cus-tomers that want to put solar on their own roof, unable to do it in much of the Commonwealth.

“While it helpfully clarifies the structure for new charges for solar customers, there remains uncertainty in the Commonwealth’s solar market due to caps on net metering that have been hit,” said NECEC Execu-tive Vice President Janet Gail Besser. “Overall this legislation is a positive step forward and will spark more growth in the clean energy economy Massachusetts has built over the last decade.”

A quick summation of all the clean energy policies in the act:

  • Renewable Portfolio Standard – Raises the RPS by increasing the annual RPS growth rate to 2% until 2029 and then to 1% thereafter, increasing the requirements from 25% to 35% in 2030 and from 35% to 45% in 2040.
  • Solar – Addresses the unfair and inefficient mandatory residential demand charge approved in Ever-source’s recent rate case.
  • Energy Storage – Establishes a stronger 1,000 MWh deployment target for utility, third-party and customer owned systems in 2025.
  • Modernize the Grid – Requires utilities to file annual resiliency reports with the DPU and hold competitive solicitations for non-wires alternatives from third party developers as a solution for reducing green-house gas emissions, replacing aging infrastructure, benefitting stressed, congested or severe weather-prone areas of the electric grid.
  • Buildings – Promotes energy efficiency by enabling more technologies to qualify within the Mass Save efficiency programs.
  • Offshore Wind — Allows DOER, after studying the needs, benefits and costs, to conduct additional offshore wind procurements of up to 1,600 more megawatts by 2035.

— Solar Builder magazine

Massachusetts Senate passes bill to eliminate the Eversource demand charge

massachusetts solar

The Massachusetts solar industry was thrown a life preserver from the state Senate, which passed SB 2545 yesterday. Not only does the bill raise the state’s Renewable Portfolio Standard (RPS) it also contains two provisions critical for the continued growth of the industry in the state.

First, it proposes a raise to the current cap on net-metering, a popular policy that is critical to the growth of solar energy across most states in the U.S. Second, it contains a proposal by Senator Michael J. Barrett to eliminate demand charges. The impetus for the demand charge amendment is a ruling by the Massachusetts Department of Public Utilities (DPU) late last year that beginning in 2019 Eversource can impose an unprecedented demand charge fee on customers who choose to add solar panels to their home, church or small business. Vote Solar estimated this demand charge could add $4400 to $9400 to the cost of a home solar system over the course of its lifetime (systems in Boston currently cost around $18,400, for reference).

Massachusetts is a top state nationwide as far as the size of its solar industry and its citizens’ desire to increase investments in clean energy. The solar industry is really banking on this bill to eliminate the demand charge and keep momentum rolling, even staging rallies to help enact change.

“The Senate today passed a bill that would leap Massachusetts back into contention as a national leader on clean energy,” said Sean Garren, Northeast Senior Director for Vote Solar. “By setting a higher bar for renewable energy and removing barriers to citizens’ right to choose solar, the bill will put thousands to work delivering cleaner air, a safer climate and stronger local economies. Vote Solar applauds the Senate’s leadership on climate and clean energy and urges to House to swiftly act on this critical legislation.”

It is now up to both branches to reach an agreement on provisions vital to send to Governor Baker’s desk.

— Solar Builder magazine

Massachusetts solar workers to rally at state house Wednesday to fend off demand charges

massachusetts solar

With the end of the legislative session quickly approaching, solar workers from across the Commonwealth will rally at the Massachusetts State House May 16 at 10 a.m. to urge the Legislature to act in support of the state’s solar industry. This comes at a critical time for the Commonwealth’s solar industry, which continues to fend off attacks at the state and federal levels. A recent report by the Solar Foundation found that solar jobs in Massachusetts – after nearly a decade of growth – saw a double-digit decline in 2017 for the second consecutive year.

Recently, six industry organizations and leading advocates representing Massachusetts’ 488 solar employers joined forces to call on Governor Baker to support legislation to reverse new solar surcharges on Eversource customers, providing relief from net metering caps (limits on the credit solar energy system owners receive), and ensuring the state Solar Massachusetts Renewable Targets (SMART) program enables all sectors of the Commonwealth’s solar industry to thrive.

Following a rally on the front steps of the State House, workers and leaders from the solar industry will meet with Massachusetts policymakers to urge them to protect the Commonwealth’s solar workforce from further declines through action on the net metering caps, SMART program tariff, and undoing the poorly designed Monthly Minimum Reliability Contribution (MMRC) charge on new solar customers in Eversource territories.

— Solar Builder magazine

Massachusetts DPU approves demand charge on residential solar customers, Vote Solar challenges

massachusetts solar energy

Nonprofit Vote Solar is challenging the controversial decision of the Massachusetts Department of Public Utilities’ (DPU) to raise rates and create uncertainty for future solar customers in the Eversource utility territory. The Jan. 5 order by the DPU will force residential solar customers to pay additional charges that could range anywhere from $4,400 to $9,400 over the life of the solar system, depending on the customer. Vote Solar, along with the rest of the solar industry do not think the outcome in this decision making process was justified by evidence in the rate case. It also feels out of step with the state’s commitment to solar energy the incentives that have been put in place over the years to encourage more installations (which have worked).

“The Commission’s decision to effectively hike rates for future solar customers is wildly out of step with Massachusetts’s commitment to clean energy and climate leadership and the DPU’s own record of ensuring that solar customers are fairly compensated for the valuable local power they generate,” said Nathan Phelps, Program Manager for Vote Solar and expert witness in the case. “We are committed to reversing this decision and ensuring that the Commonwealth can continue building its clean energy economy, creating jobs, and fighting climate change.”

Demand charges for residential customers

Under the Eversource proposal approved by the Commission, solar customers in the state’s largest utility service area will be forced onto demand charges, a rate structure that is virtually unheard of for residential customers. These notoriously unpredictable charges are determined by a customer’s highest electricity usage over an entire monthly billing period, even if that peak is just for a few minutes. This means that an unlucky coincidence of events – an air conditioner automatically cycling at the same time that bread is in the toaster – can result in an unexpected bill increase for customers. In 2017, Vote Solar and five other leading regulatory experts released a report, titled “Charge without a Cause,” demonstrating that demand charges are both unfair to customers and are an ineffective mechanism for utility cost recovery.

The new Monthly Minimum Reliability Contribution (MMRC) charge approved in the order will apply to new net metering customers as of Dec. 31, 2018. It includes a higher customer charge and imposes demand charges on all net metering customers, including residential. This makes Massachusetts the first state commission to approve mandatory demand charges for residential customers.

The end of net metering? Report sums up movement to new solar compensation plans

Additionally, and in contrast with states around the country that have offered customers “time-of-use” rates that signal to customers when it costs more to use electricity, the order eliminates optional residential time-of-use rates. It also closes a time-of-use rate available to commercial and industrial customers as of Feb. 1, 2018, which is less than a month’s notice.

The Commission’s decision will set back Governor Charlie Baker’s commitment to lead on climate change in the absence of federal leadership. It also compromises the state’s clean energy economy, which today employs more than 100,000 people and has driven $11.4 billion in investments in the sector.

“This decision departs from the Department’s own precedent, is not supported by the evidence in the record before the Commission, and is counterproductive to the state’s own energy policies. We will ask the Supreme Judicial Court to get right what the Commission got wrong,” said Earthjustice attorney Hannah Chang.

Vote Solar’s petition of appeal will be filed in the Massachusetts Supreme Judicial Court by early February.

Solar industry reaction

The Northeast Clean Energy Council (NECEC) and the Solar Energy Industries Association (SEIA) immediately expressed concern, noting the obstacles for customers seeking to make clean energy choices, including the installation of solar, adoption of storage, energy efficiency and potentially electric vehicles.

“This order is a huge step backwards for a state that was one of the early national leaders in grid modernization and solar policy. It will discourage customer adoption of clean energy across the Commonwealth, further slowing clean energy job growth and investment and threatening to undermine the Baker-Polito Administration’s goal to achieve another 1,600 megawatts (MW) of solar,” said Janet Gail Besser, Executive Vice President of the Northeast Clean Energy Council. “Mandating a demand charge for residential customers at this scale is unprecedented. These changes are particularly concerning because Eversource lacks the “smart” metering needed to inform customers about their peak demand and energy usage.”

 

“This approval from the DPU is precedent-setting in all the wrong ways,” said Sean Gallagher, SEIA’s vice president of state affairs. “With a sweep of a pen, DPU has made it harder for customers to be properly informed on how to manage their electricity use. This is a step in the wrong direction for solar in the Commonwealth and will undoubtedly make it tough for Massachusetts to reach its goal of installing another 1,600 MW of solar.”

NECEC and SEIA were pleased with the DPU’s decision not to consolidate commercial and industrial (“C&I”) rates at this time, which would have significantly harmed municipal and other solar projects already in operation or development, as well as the decision to address extra charges related to interconnection upgrades in a new proceeding in 2018.

— Solar Builder magazine