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

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

Massachusetts makes energy storage a priority with $20 million in grants

Massachusetts energy storage

The Massachusetts Department of Energy Resources was awarded $20 million in grants to 26 projects that will develop the region’s energy storage market. This number actually doubles the administration’s original funding plans. Overall, these projects will benefit 25 communities and draw in $32 million in matching funds, helping to grow the Commonwealth’s energy storage economy.

The announcement was made by Governor Baker during an event at UMass Memorial – Marlborough Hospital. The critical care facility will use funding received under the grant program to integrate a 400kw solar canopy and energy storage system, reduce energy use and costs, shave its peak demand and increase its overall resilience.

“The development and deployment of energy storage projects will be vital to the Commonwealth’s ability to continue leading the nation in energy efficiency,” said Governor Charlie Baker. “Funding these storage projects is an investment in our energy portfolio that will reduce costs for ratepayers and help create a clean and resilient energy future.”

Launched by the Baker-Polito Administration in 2015, the ESI aims to make Massachusetts a national leader in energy storage by analyzing opportunities to support energy storage companies, accelerating the development of early commercial storage technologies and developing policy options to encourage energy storage deployment. The first phase of the ESI, the State of Charge study released in September 2016, identified hundreds of millions of dollars of potential ratepayer benefits from the deployment of energy storage in Massachusetts. The study analyzed the benefits of 10 specific use cases to evaluate how storage economics vary by business model, market involvement and location. These awards represent eight of those use cases and an additional use case not previously identified in the report.

SB Buzz Podcast: Fronius’ Dan Fortson talks the evolution of solar from the early days to now (and how he’d change it)

Energy storage technologies include batteries, flywheels, thermal storage, and pumped hydroelectric storage, which are capable of storing energy during off peak periods when costs are low and then make energy available during peak periods when costs are higher. Energy storage also makes it possible to increase the effectiveness of renewable energy sources, like solar, by storing energy generated during the day for use at night. Energy storage can also provide power during outages, result in greenhouse gas reductions, and increase the electric grid’s overall reliability and resilience.

The grants were awarded as part of the Baker-Polito Administration’s Energy Storage Initiative (ESI) Advancing Commonwealth Energy Storage (ACES) program, funded by the Department of Energy Resources (DOER) through Alternative Compliance Payments (ACP) and administered by the Massachusetts Clean Energy Center (MassCEC).

“Energy storage is a strategic opportunity for the Commonwealth to transform the way we utilize our energy resources,” said Department of Energy Resources Commissioner Judith Judson. “The projects receiving funding through the ACES program will provide a roadmap for how Massachusetts can integrate storage into our diversified energy portfolio to lower overall energy costs, increase grid efficiency by decreasing peak demand, and more effectively utilize our strong clean energy sector.”

— Solar Builder magazine

Massachusetts sets high bar for 2020 energy storage target

massachusetts solar storage goals

Massachusetts has set a 200 megawatt hour (MWh) energy storage target to be achieved by Jan. 1, 2020. The target, set by the Department of Energy Resources (DOER), builds upon Governor Charlie Baker’s Energy Storage Initiative (ESI), a $10 million commitment to analyze opportunities to support Commonwealth storage companies and develop policy options to encourage energy storage deployment.

In order to continue supporting the development of energy storage in the Commonwealth, the Administration also announced up to $10 million in additional funding for energy storage demonstration projects that are consistent with the findings of the ESI’s State of Charge study and that DOER will examine the benefits of amending the Alternative Portfolio Standard (APS) to expand the eligibility of energy storage technologies able to participate.

“As the Commonwealth continues to make unparalleled investments in renewable energy, energy storage technologies have the potential to play an integral role in effectively deploying these new resources,” said Governor Charlie Baker. “This target, paired with our Energy Storage Initiative, will cause the state and industry to lead the way on exploring the most cost-effective deployment of energy storage for Massachusetts’ ratepayers.”

Energy storage potential

State of Charge, released by DOER in September 2016, identified hundreds of millions of dollars of potential ratepayer benefits from the deployment of energy storage in Massachusetts. Since its release, DOER has already implemented a number of the report’s recommendations to promote energy storage in the Commonwealth. They include, but are not limited to, becoming the first state in the nation to incentivize the pairing of energy storage with solar in the new proposed solar incentive program, SMART; authorizing the pairing of energy storage technologies with the largest procurement of clean and offshore wind energy generation in state history, 9,450,000MWh of clean energy generation and 1,600MW of offshore wind energy generation; continued energy storage grant opportunities through the Community Clean Energy Resiliency Initiative; and funding energy storage projects through the Peak Demand Reduction Grant Program.

“State of Charge showed that energy storage has the potential to be a game changer for Massachusetts, with hundreds of millions of dollars of ratepayer and system benefits,” said Secretary of Energy and Environmental Affairs Matthew Beaton. “The 200MWh target, developed with the feedback of a wide range of stakeholders, will build upon the Baker-Polito Administration’s commitment to growing the deployment of energy storage throughout the Commonwealth.”

The Holistic Home: We peer into the future of home energy generation, usage

In calculating the achievement of the target, DOER will consider procurement methods including, the refinement of existing clean energy procurement methods, participating in alternative compliance payment funded pilot programs in which the company is an awardee or in a partnership with an awardee, and through the use of energy efficiency funds. Additionally, the target sets a flexible goal for the electric distribution companies to identify the most cost-effective applications and the best locations for energy storage deployment, including both in front of the meter and behind the meter applications.

“Massachusetts should be congratulated for their holistic efforts to incorporate energy storage into multiple state programs focused on clean energy and grid reliability,” said Matt Roberts, Executive Director of the Energy Storage Association. “We look forward to working with the Baker-Polito Administration and leaders in the Legislature to build upon this initial target so that Massachusetts residents can reap the benefits of a more reliable, flexible, and affordable electric grid.”

 

— Solar Builder magazine

Massachusetts extends Solar Renewable Energy Credit program (is net metering cap next?)

massachusetts solar

The Massachusetts Department of Energy Resources (DOER) has announced plans to extend the Commonwealth’s successful Solar Renewable Energy Credit (SREC 2) program until it completes a long-term replacement. Since its inception, the SREC 2 program has led Massachusetts to more than 1,600 megawatts of solar development and supported thousands of local jobs, investments and a healthier environment for Bay State families and businesses. Solar associations, businesses, non-profits and supporters praised the move to address the gap between the SREC 2 program and its successor.

Advocates also highlighted the need for state lawmakers to raise the Commonwealth’s net metering caps this session. SEIA says, as of now, there are waiting lists for net metering cap allocations in two utility service territories.

RELATED: Minnesota governor vetoes anti-solar net metering bill 

“The solar industry applauds Massachusetts Governor Baker and the Department of Energy Resources, led by Commissioner Judith Judson, for their efforts to extend the Solar Renewable Energy Credit 2 program,” said Sean Gallagher, Vice President of State Affairs at the Solar Energy Industries Association. “With this extension now on the books, we are asking the Baker Administration and lawmakers to support an increase to the Commonwealth’s net metering caps. We look forward to working with the Legislature and the Governor to enact legislation raising the caps this year.”

“Solar is delivering economic and environmental benefits to Massachusetts, with tens of thousands of solar jobs, millions of dollars in energy savings and significant reductions in our air and water pollution,” said Nathan Phelps, Program Manager of Distributed Generation Regulatory Policy at Vote Solar. “The Commonwealth is on the path to a bright solar future, and we applaud the Baker Administration for seeking to avoid a bump in the trail with this extension. Whether solar remains on that path will depend on the Administration and Legislature lifting limits on net metering and creating a viable new incentive program.”

 

— Solar Builder magazine