On March 17th, 2014, Stakeholders in the Massachusetts DOER’s Solar Carve-Out received an email with two key announcements regarding the proposed revisions to the RPS Class-I Regulation.
1) That last week, the Joint Committee on Telecommunications, Utilities, and Energy submitted their comments to the DOER on the proposed revisions. These comments were broken up into nine items, which are summarized below.
2) That the draft of the Solar Carve-Out II Program’s Assurance of Qualification Guideline was released for public comment and review. This is particularly relevant to systems that are qualified under the “Managed Growth” market sector. The DOER will be accepting comments on the draft Guideline through March 28, 2014. All comments should be emailed to DOER.SREC@state.ma.us and should contain the subject line “Assurance of Qualification Guideline Comments.”
Summary of the Committee’s comments:
Item 1: Price Volatility
Following the initial boom in solar development, spurred on by SRECs trading near the Alternative Compliance Price, SREC prices have dropped significantly. The Committee believes that the Managed Growth concept will be a useful “tool for reducing volatility in the market which should benefit both retail electric suppliers and solar facility owners.”
Item 2: Cost
The Committee supports the 1600 MW solar goal by 2020, but believe it is “important that the program is designed to achieve its goal at low costs” to the consumers. Gradually lowering the ACP and Clearinghouse Auction-II fixed prices reduces the risk of high cost to ratepayers funding these programs.
SREC Factor: Different factors to different market segments in order to more accurately match costs for each of these segments. “Considering the falling costs of solar,” committee members “encourage the DOER to review the SREC Factor Guideline even earlier than…March 31, 2016.”
Competition Imperative to Assure Low Costs: With its Guidelines, the DOER has left the possibility for competition open. The committee believes that “competition can be effective at lowering costs.”
Achieving Transmission and Distribution (T&D) Benefits to Maximize Cost Effectiveness: There is little incentive for solar growth at locations on the distribution grid that would provide maximum benefit to the grid, and ultimately ratepayers. The Committee Encourages the DOER to work closely with solar developers, utilizing tools such a solar maps, and to advocate for integrated distribution programs, which could lower total program costs.
Item 3: Equity Between Market Sectors
Under SREC-I, ground and roof projects were worth the same, but the latter cost significantly more per unit of capacity. SREC Factor helps correct the bias towards the larger systems.
Item 4: The Solar Carve-Out and Net Metering
The committee “hopes that…Solar Carve-Out II…[takes] into account the limitations on aggregate net metering capacity.” Additional changes may be necessary “to continue the growth of solar in Massachusetts.”
Item 5: Third-Party Ownership versus Direct Ownership
Though “Third-Party Ownership structures have provided…homeowners, businesses, municipalities and other government entities…with access to solar and lower energy costs,” the committee also recognizes the benefits of homeowners and businesses owning their systems outright. The committee strongly supports the DOER’s ACP-funded financing program to “help address barriers to direct ownership.”
Item 6: Class I RPS Eligibility for non-SREC GIS Certificates
SREC Factor ostensibly limits the demand for SRECs associated with the installed capacity target by generating a set portion of an SREC per megawatt-hour. However, the committee sees no reason why the portion of solar electricity that does not fall under Solar Carve-Out II Renewable Generation Attributes also does not fall under RPS Class I Renewable Generation Attributes.
Item 7: Restricting Market Sector C to a Single Parcel of Land
The section stating that arrays with a capacity less than 650kW are also eligible for Market Sector C does not specify that this capacity should be measured as the total capacity of Solar Carve-Out II units on a single parcel of land. The committee believes there ought to be such a provision: without one, larger projects that should be restricted to managed growth may inappropriately be able to access Sector C.
Item 8: Access to Solar for Non-Profit Institutions
Although non-profits make up 15% of the Commonwealth’s employment, “less than 3% of solar projects have been developed by or on behalf of non-profits.” The DOER should institute changes to the proposed regulations or to the SREC Factor guidelines to help remedy this discrepancy.
Item 9: Pre-2010 Solar Systems
Although early-adopters of the commonwealth rebate program may have received larger rebates than late-comers, many of these aggregators “have abandoned their solar REC aggregation” due to the scarcity of Class I REC-generating facilities in Massachusetts, and consequent difficulty of selling their attributes. The committee would like to the DOER consider offering Solar Carve-Out I or II eligibility to pre-2010 systems.
The Original Email
The Joint Committee on Telecommunications, Utilities, and Energy’s full comments
RPS Solar Carve-Out II Assurance of Qualification Guideline
DOER Draft of SREC-II Regulations
The Renewable Energy Portfolio Standard – Class I