Posts Tagged ‘Massachusetts’

MA16 SREC-I Market Review

Posted November 3rd, 2016 by SRECTrade.

With the October issuance of Q2 2016 SRECs behind us, we are now approximately halfway through the 2016 energy year in Massachusetts. This blog post will take into account observed issuance numbers from the first half of the year and use projections for future issuance periods to understand what caused the fall in MA16 SREC-I prices from $450+ in January to more recent bids of $380. We will look at the supply and demand balance in order to survey what may be coming in the months ahead.

Recall that demand is driven by retail electric sales in the State. The latest data we have comes from 2014, a year in which 48,129,294 MWh were sold. If we assume that retail electricity sales are flat and we apply the obligation of 1.76% and then adjust for exempted load, we derive a total estimated demand of 833,780 SRECs:

MA16 SREC-I Demand

On the supply side of the market, the simplest analysis assumes the market generates nearly 784,000 SRECs and when combined with the re-minted volumes from this year’s SCCA (1,898), then we get a total supply of 785,886. When compared to the demand outlined above, we conclude the market is short nearly 48,000 SRECs.

MA16 REC-I simple supply

What would explain falling prices in a market that is potentially under-supplied? The quick answer is that perhaps retail sales of electricity are falling instead of flat, which would lower the demand. Alternatively, perhaps the supply of SRECs is higher than detailed. We’ll examine some supply scenarios first.

One component of supply is the banked SRECs from prior years. Retail suppliers can bank up to 10% of their annual obligation for use in future years. The maximum volume of banked RECs in the market is estimated at 65,382 – the sum of the total obligation in 2014 and 2015 multiplied by 10%. If all of those SRECs were brought to market in 2016, then we would see the market long by 17,488 SRECs. We see that scenario as unlikely since 2015 was short and the bank may have been used to avoid paying Alternative Compliance Payments (ACPs). On the other hand, it’s possible that between re-minted SRECs from the 2013 and 2014 SCCCA and banked volumes, that upwards of 15,000 SRECs from prior vintages may impact the 2016 market. This source of supply would help to tighten the balance of supply and demand, but not necessarily push to over-supply.

Examining a different scenario on the demand side, even if retail sales were down 3%, the total SREC demand would still sit at 808,414, leaving a tight, yet still under-supplied market based on the simpler supply analysis.

Another element worth mentioning is liquidity. While a healthy market needs liquidity from both buyers and sellers in order to function properly, we will direct our attention to the buy-side. Because there are far more sellers than buyers in this market, an absence of even a handful of buyers is far more impactful to the efficiency of the SREC markets than the absence of an equivalent number of sellers.

In recent months we have observed a noticeably subdued level of activity from buyers. What happens when SRECs are issued and a bunch of sellers come into a quiet market? As evidenced from pricing over the last month, bids start to retreat:

Market_Insights___SRECTrade

A simplistic read of the current state of the market is that prices have dropped due to the possibility of oversupply. However, deeper examination of current supply and demand in SREC-I markets points towards a tighter, more balanced market. The bearish sentiment reflected in recent weeks may actually reflect a lack of activity from natural compliance buyers in the face of a glut of supply coming to market after Q2 issuance. These two scenarios mean very different things for medium to long term “equilibrium” pricing in the SREC-I market. A structural and persistent oversupply, a scenario we do not perceive as likely, would mean that lower prices are justified and here to stay. A mismatch of liquidity due to trading preferences of buyers and sellers however would point towards short term volatility but longer term stability in supportive SREC prices.

As always, we will continue to provide follow-up analysis as more information becomes available.  Feel free to reach out to your contacts on SRECTrade’s brokerage desk with any questions you may have.

 

Disclaimer. This document, data, and/or any of its components (collectively, the “Materials”) are for informational purposes only. The Materials are not intended as investment, tax, legal, or financial advice, or as an offer or solicitation for the purpose or sale of any financial instrument. SRECTrade, Inc. does not warranty or guarantee the market data or other information included herein, as to its completeness, accuracy, or fitness for a particular purpose, express or implied, and such market data and information are subject to change without notice. Past performance should not be taken as an indication or guarantee of future performance, and no representation or warranty, express or implied, is made regarding future performance. Any comments or statements made herein do not necessarily reflect those of SRECTrade, Inc. SRECTrade, Inc. may have issued, and may in the future issue, other communications, data, or reports that are inconsistent with, and reach different conclusions from, the information presented herein.

Copyright. This document is protected by copyright laws and contains material proprietary to SRECTrade, Inc. This document, data, and/or any of its components (collectively, the “Materials”) may not be reproduced, republished, distributed, transmitted, displayed, broadcasted or otherwise disseminated or exploited in any manner without the express prior written permission of SRECTrade, Inc. The receipt or possession of the Materials does not convey any rights to reproduce, disclose, or distribute its contents, or to manufacture, use, or sell anything that it may describe, in whole or in part. If consent to use the Materials is granted, reference and sourcing must be attributed to the Materials and to SRECTrade, Inc. If you have questions about the use or reproduction of the Materials, please contact SRECTrade, Inc.

MA DOER Seeking Comments on Next Generation Solar Incentive Straw Proposal

Posted October 25th, 2016 by SRECTrade.

On September 23, 2016, the Massachusetts Department of Energy Resources (DOER) presented its Straw Proposal to outline its vision for the next solar incentive program for the state. The DOER is proposing to shift away from the state’s successful SREC program, which has created one of the largest and most robust solar markets in the country.

Under the DOER’s proposal, a declining block feed-in-tariff would be established in regulated utility territories, and a separate program would be created for municipal light districts. Moving away from the current market-based framework will impose a substantial transition burden and introduce new costs to participants. The shift to a completely different program will have a negative impact on the viability of the solar industry in the interim and poses uncertainty moving forward.

Massachusetts has installed more than 1,200 MW of operational solar capacity to date and was ranked 2nd in the nation in total solar industry employment in 2015. Replacing the current market-based framework with a declining block feed-in-tariff will not only be costly to all stakeholders, but it will also fail to satisfy the DOER’s objective to “provide clear policy mechanisms that control ratepayer costs and exposures”. By imposing this new and complicated model, the DOER will force the state’s many market participants to manage, understand, and abide by multiple programs at once. This will undoubtedly increase soft costs and increase administrative burden across the industry.

In contrast, establishing an SREC-III program would allow the state’s solar industry to continue relying on a market-based policy to set incentive levels and forge ahead on its path to a stable, equitable, and self-sustaining solar market. By making adjustments to SREC factors, market sectors, the SCCA and SACP, the Commonwealth can continue to benefit from the successful SREC model and preserve the progress it has made since SREC-I was implemented six years ago.

SRECTrade encourages all stakeholders in the Massachusetts solar market to submit comments in support of a smooth transition to another successful SREC program. Comments can be submitted to the DOER via email at DOER.SREC@state.ma.us and must be submitted by this Friday, October 28th.

DOER Announces Final 2017 Compliance Obligation and Minimum Standard

Posted September 1st, 2016 by SRECTrade.

On Wednesday, August 31, the Massachusetts Department of Energy Resources (DOER) announced the final 2017 Solar Carve-out (SREC-I) and Solar Carve-out II (SREC-II) Compliance Obligations and Minimum Standards. This announcement follows the results of the SREC-I and SREC-II Solar Credit Clearinghouse Auctions.

Notably, this announcement differs greatly from the preliminary announcement in July. In particular, the DOER announced that the final SREC-II Minimum Standard for load under contracts signed prior to May 8, 2016 is 2.0197% (969,635 MWhs), reduced from 2.2960% (1,102,311 MWhs).

Solar Carve-out (SREC-I)

The DOER has determined that the 2017 Compliance Obligation for the SREC-I program will be 783,183 MWh and that the Minimum Standard will be 1.6313%. The 2017 Minimum Standard for load under contracts signed before June 28, 2013 will be 0.9861%. The Determination of the CY 2017 Total Compliance Obligation and Minimum Standard, published by the DOER, outlines how this Minimum Standard was calculated.

SREC-I Min Std

Solar Carve-out II (SREC-II)

The DOER has also calculated the 2017 Compliance Obligation and Minimum Standard for the SREC-II program, which are 1,374,406 MWh and 2.8628%, respectively. The DOER outlined how this preliminary Minimum Standard was determined in its “CY 2017 Calculation of Minimum Standard Guideline”.

SREC-II Min Std

Since all Retail Electricity Suppliers are exempt from additional obligations resulting from the expansion of the SREC-II Program Capacity Cap, the DOER established a baseline Compliance Obligation and Minimum Standard for load under contracts signed on or prior to May 7, 2016. The DOER’s calculation of the Final 2017 Compliance Obligation and Minimum Standard were similar to its calculation of the Preliminary 2017 Compliance Obligation and Minimum Standard (detailed here), but used 825 MW as the capacity that it expects would have been in operation had the SREC-II Program Capacity Cap not been expanded. The DOER used the 825 MW value to reflect its estimate of the generation facilities that would be qualified and operational by the end of the year – a significant reduction from the original 947 MW projection.

Using the 825 MW estimate, the DOER determined a total baseline Compliance Obligation of 969,635 MWhs and a Minimum Standard of 2.0197%. These two figures are significantly less than their counterparts from the preliminary 2017 Compliance Obligation and Minimum Standard, which were 1,102,311 MWhs and 2.2960%, respectively.

SREC-II Obligation Chart

The latest Solar Carve-Out II Qualified Units report (updated on August 25) identified nearly 575 MW of capacity as qualified and operational under the SREC-II program. Comparing the 825 MW figure that the DOER is targeting to the existing 575 MW, the market would need to more than double the Last Twelve Months (LTM) monthly average build-rate (30 MW) to reach that threshold.

For more information on the July announcement of the Preliminary 2017 Compliance Obligation, please visit our blog post on the topic.

MA DPU Establishes Net Metering “Notification Date” as September 26, 2016

Posted August 3rd, 2016 by SRECTrade.

On July 29, 2016, the Massachusetts Department of Public Utilities (the “DPU”) issued its Order Announcing Notification Date and Directives to Distribution Companies in its proceeding under 16-64-D, establishing the Net Metering “Notification Date” as September 26, 2016. Pursuant to Chapter 75 of the Acts of 2016D.P.U. 16-64-C, and as confirmed by this Order, there are three strict criteria that must be met for a private net metering project to receive net metering credits under the old regime:

  1. Submission of an Application for Cap Allocation (ACA) to the Massachusetts System of Assurance of Net Metering Eligibility (System of Assurance) for a net metering cap allocation prior to the Notification Date of September 26, 2016 by 2:00pm;
  2. Receipt of confirmation from the System of Assurance Administrator that the application (ACA) is complete; and
  3. Receipt of a ACA cap allocation by January 8, 2017.

In its Order, the DPU determined that “the best option to result in a smooth transition to a stable and equitable solar net metering market” was to align the timing for transition to the new net metering credits policy with the Massachusetts Department of Energy Resources (DOER)’s SREC-II program. In selecting September 26, 2016 as the “Notification Date”, the DPU calculated the maximum amount of time that could be required to obtain a cap allocation on or before January 8, 2017, which was determined to be 70 business days. In addition, the September 26 date is exactly 60 calendar days after the Order’s announcement of the Notification Date. In consideration of these two timelines, the DPU determined that this date would provide enough time for systems to plan for, apply for, and receive a net metering cap allocation under the existing framework.

For more information on the current and new net metering regulation in the state of Massachusetts, please visit our previous blog post on the topic.

MA DOER Announces Preliminary 2017 Compliance Obligation

Posted July 25th, 2016 by SRECTrade.

Friday, July 22, 2016, the Massachusetts Department of Energy Resources (DOER) announced the preliminary 2017 Solar Carve-out (SREC-I) and Solar Carve-out II (SREC-II) Compliance Obligations and Minimum Standards. Customarily, the DOER estimates these values prior to administering the Solar Credit Clearinghouse Auction each year. The final 2017 Minimum Standards will be announced on or before August 30th, after both the SREC-I and SREC-II Auctions have concluded.

Solar Carve-out (SREC-I)

Notably, the DOER projects that the final 2017 Compliance Obligation for the SREC-I program will be approximately 783,181 MWhs and that the Minimum Standard will be approximately 1.6313%. These values will be increased to 785,077 MWhs and 1.6352%, respectively, if the SREC-I auction does not fully clear in the first two rounds. The 2017 Minimum Standard for load under contracts signed before June 28, 2013 will be 0.9861%.

The DOER published a resource outlining its calculation of the preliminary SREC-I Minimum Standard.

Preliminary 2017 Compliance Obligation SREC-I Table

Solar Carve-out II (SREC-II)

Regarding the SREC-II Program, the DOER established a baseline Compliance Obligation and Minimum Standard that would have applied to Retail Electricity Suppliers had the RPS Class I Emergency Regulation not been filed on April 8, 2016; these suppliers are exempt from any additional obligations resulting from the expansion of the SREC-II Program Capacity Cap.

To calculate this baseline Minimum Standard, the DOER first determined the expected MWh/year that would have resulted had the SREC-II Program Capacity Cap remained 947 MW by:

  1. Identifying the percentage shares of MW currently qualified under each SREC-II Market Sector;
  2. Multiplying these percentages by the original 947 MW SREC-II Program Capacity Cap;
  3. Multiplying these totals by (1) their respective SREC Factors, (2) a 13.51% expected capacity factor, and (3) 8,760 hours/year.

The DOER then summed these values and combined the auction volume and banked SREC-II volume from the 2015 Compliance Filings, resulting in a baseline Compliance Obligation of 1,102,311 MWhs and a Minimum Standard of 2.2960%. These values will be increased to 1,169,357 MWhs and 2.4357%, respectively, if the SREC-II auction does not fully clear in the first two rounds.

Preliminary 2017 Compliance Obligation SREC-II Table 2

Additionally, the DOER calculated the preliminary 2017 SREC-II Compliance Obligation and Minimum Standard for load under contracts signed after May 8, 2016 – 1,496,188 MWhs and 3.1164%, respectively. These values will be increased to 1,563,234 MWhs and 3.2561% if the SREC-II auction does not fully clear in the first two rounds.

Preliminary 2017 Compliance Obligation SREC-II Table

The DOER also published a resource outlining its calculation of the preliminary SREC-II Minimum Standard.

Solar Credit Clearinghouse Auctions

The first rounds of the SREC-I and SREC-II Solar Credit Clearinghouse Auctions are scheduled for July 29, 2016. A second and third round will be held as needed the following week should these auctions not fully clear.

The DOER has also provided slight updates to the volumes of SRECs available in the Auctions: 1,896 in SREC-I and 67,046 in SREC-II.

SRECTrade will continue to monitor the proceedings of the Solar Credit Clearinghouse Auctions and will report the outcomes of the Auctions once the results become readily available.

MA Department of Public Utilities Clarifies Net Metering Regulation

Posted May 25th, 2016 by SRECTrade.

Please note this blog post has been revised from the original May 24, 2016 post.

On Wednesday, May 18th, the Massachusetts Department of Energy Resources (DOER) notified the Department of Public Utilities (DPU) of its intent to file its determination that the 1,600 Megawatt (MW) threshold will be met on or about June 1, 2016 and requested that the DPU clarify whether facilities with private cap allocations on or before the “Notification Date” will receive the current net metering credits or the new Market Net Metering Credits. Under the recently enacted Chapter 75 of the Acts of 2016, this determination sets into motion DPU’s charge to establish a “Notification Date”, which will serve as a deadline for systems that are under the private net metering cap to be interconnected or allocated under the cap in order to receive the current net metering credits. Furthermore, the DOER requested that the DPU clarify its Emergency Net Metering Regulations and assure those facilities in receipt of net metering cap allocations on or before the Notification Date that their projects will receive net metering credits at current rates and will not receive Market Net Metering Credits (which are effectively equal to 60 percent of the retail rate). Prior to the DOER’s request, the uncertainty around the Notification Date deadline left private-cap projects in advanced stages of construction at risk of receiving Market Net Metering Credits if they failed to be interconnected by the Notification Date, creating project financing concerns.

In its May 19th Order Clarifying Emergency Net Metering Regulations, the DPU formally recognized that systems obtaining a private net metering cap allocation are “on the path toward interconnection”, since these allocations are assurances that a system will receive net metering services upon authorization to interconnect. In clarifying its policy on net metering credit eligibility, the DPU extended retail rate credit eligibility for projects that receive a private cap allocation by the Notification Date, even if those projects are not yet interconnected. Resultantly, for the duration of the Emergency Net Metering Regulations, Solar Net Metering Facilities that are interconnected or in receipt of a private cap allocation from the System of Assurance by the Notification Date shall receive retail rate net metering credits (that is, Net Metering Credits as defined in 220 C.M.R. § 18.04(1) and (5)).

This interpretation of eligibility will remain in effect only for the effective period of the Emergency Net Metering Regulations, and it is highly probable that the Notification Deadline will be set by the DPU for a date later than June 1, 2016. Following notice by the DOER that the 1,600 MW cap has been allocated, the DPU will solicit comments on the Emergency Net Metering Regulations and related issues, conduct a public hearing, and enact Final Net Metering Regulations effective July 29, 2016. Accordingly, it is possible that the Notification Deadline will be set as July 29, 2016 or possibly later than this date.

In accordance with the Order, facilities under the private net metering cap that fail to meet the Notification Date deadline will receive Market Net Metering Credits. Residential projects 10 kW and smaller on single-phase circuits, or systems under 25 kW on 3-phase circuits, will be exempt from the new rate structure under Sections 7 and 8 of the Act and are guaranteed retail remuneration rates. To be clear, facilities under the public net metering cap will continue to receive net metering credits at the current rates and will not be impacted by this Notification Deadline. For more information on current net metering and other solar legislation in Massachusetts, please visit our previous blog post on the topic here.

Massachusetts Raises Caps; Passes Net Energy Metering Bill

Posted April 17th, 2016 by SRECTrade.

On April 11, Governor Baker signed into law Chapter 75 of the Acts of 2016. The law, which was passed with an emergency preamble to have immediate effect, raises the net metering cap by 3% for private and public solar projects and will reduce the current retail remuneration rate to the wholesale rate for commercial and community solar projects once the state hits its 1600 MW solar target. Residential projects 10 kW and smaller on single-phase circuits, or systems under 25 kW on 3-phase circuits, will be exempt from the new rates under Sections 7 and 8 of the Act. Finally, the Act will permit utilities to charge solar project owners a minimum bill to cover their fixed costs.

The immediate effect of the Act will enable the stalled solar industry in Massachusetts to restart in the short term, but the Act is far from a comprehensive solution to establishing long-term, sustainable policies for solar in the Commonwealth. With the new cap estimated to be reached in some territories within a few weeks, the pressure remains on the Legislature to continue discussions on the future of solar in the state.

The Act is the result of compromise between and among the Senate, the House of Representatives, and Governor Baker. Following an impasse of the chambers’ and Governor’s respective bills last summer and into the fall, the Legislature was able to reconcile H.4173 and S.1979, passing the bill in each chamber with nearly unanimous approval. The lone “Nay” was asserted by Rep. Jonathan Hecht (D), who voiced his worry that devaluing net metering credits was a step in the wrong direction for the Commonwealth. “I’m afraid if we do lower net metering rates by that large amount, it means many solar projects simply will not get built[]”, Hecht said.

With the devaluation of net metering rates, stakeholders will expect the value to be made up elsewhere to ensure the financial viability of solar projects. Following the SREC-II Emergency Regulations issued by the DOER last week, it is clear that the DOER is working on the next phase of the state’s solar incentive program to fulfill their obligations under Section 11 of the Act. Sustainable Energy Advantage, LLC (SEA) has been engaged to assist in conducting analysis in evaluation of the next program, and stakeholders will have the opportunity to participate in the design and implementation of the next phase of the program.

Thanks in large part to the state’s net metering policies, former Governor Patrick setting the state’s 1,600 MW target, and the successful SREC-I and SREC-II programs, the robust Massachusetts solar industry now employs more than 15,100 people. Today, the state ranks sixth in installed solar capacity, with more than 1,020 MW of solar installed.

 

Massachusetts SREC-II Emergency Regulation Filed: April 8, 2016

Posted April 11th, 2016 by SRECTrade.

On Friday, April 8, 2016 (the effective date), the Massachusetts Department of Energy Resources (MA DOER) announced it filed emergency regulation with the Secretary of State’s office. The regulation was submitted to address the current uncertainty in the solar industry and facilitate a smooth transition from SREC-II to the next incentive program. Although this emergency regulation is effective immediately, it can only remain in effect for 90 days pending a full DOER rule-making proceeding. Information on next steps in the emergency regulation process is still forthcoming, including public hearings and public comment submission deadlines.

Notably, the emergency regulation implements the following:

  • Extends SREC-II eligibility to all systems greater than 25 kW constructed by January 8, 2017; 9 months from the effective date
  • Extends SREC-II eligibility to all systems less than or equal to 25 kW interconnected by the start of the next incentive program
  • Implements compliance exemption for all electricity supply contracts signed within 30 days of the effective date
  • Ensures SREC-II will run through 2027

In regard to systems greater than 25 kW, the emergency regulation grants Statements of Qualification dated April 8, 2016, to all systems that have an existing Assurance of Qualification or that have submitted an application. The retention of granted Statements of Qualification is dependent on systems demonstrating (1) authorization to interconnect or (2) proof of construction to the DOER by January 8, 2017.

Reiterating the note above, in regard to systems less than or equal to 25 kW, all applications that demonstrate authorization to interconnect by the start of the next incentive program will be qualified under the SREC-II program.

In close, the DOER noted that development of the Commonwealth’s next solar energy incentive program is underway. Sustainable Energy Advantage, LLC (SEA) has been engaged to assist in conducting analysis in evaluation of the next program. Additionally, the DOER will work with market participants to solicit feedback as the program is designed and implemented.

SRECTrade will continue to monitor the status of the emergency regulation and provide updates regarding the future of Massachusetts’s next solar incentive program. We look forward to watching the state continue to structure competitive market based solutions, similar to those previously utilized, to continue its position as a national leader of deploying distributed solar technologies.

Massachusetts Governor Baker Releases Net Metering Bill to Rival Senate Bill

Posted August 13th, 2015 by SRECTrade.

Shortly before its summer recess, the Massachusetts Senate passed Amendment 18 to S. 1973 in a voice vote on July 23. Two weeks later, on August 7, 2015, Massachusetts Governor Charlie Baker released a net metering bill to rival S. 1973.

Both the Senate Bill and the Governor’s Bill address the net metering caps that are currently causing a slow-down in the Commonwealth’s solar development, and look to former Governor Patrick’s goal for the Commonwealth to install 1,600 megawatts of solar energy in Massachusetts by 2020. Earlier this year, the Baker-Polito Administration announced its support of the goal to achieve 1,600 MW by 2020. Accordingly, both S. 1973 and the Governor’s Bill propose to raise the net metering caps to meet the goal of 1,600 MW by 2020.

Under Amendment 18 to S. 1973, the Senate calls for raising the caps to 1,600 MW, and eliminating the caps thereafter (the elimination of the caps would apply to solar net metering facilities, with the exception that the maximum amount of generating capacity eligible for net metering by a municipality or other governmental entity shall be 10 megawatts), but the bill would do little else to change the value of a net metering credit. In addition to addressing the caps, the Amendment calls for Massachusetts regulators to “develop a solar incentive program to encourage continued development of solar…” with the goal of “develop[ing] a sustainable long-term framework that effectively balances promoting clean energy and costs to ratepayers,” to be implemented after the 1,600 MW target has been reached. Unfortunately, the Senate bill also attempts to limit the potential options for future programs, without much consideration for allowing the stakeholder process to consider all of the policy options presented by the Task Force in its Final Report (see below).

In contrast, Governor Baker’s Bill would substantially reduce the value of net metering credits in the Commonwealth. For solar projects over 10 kW on single phase, or projects over 25 kW on 3-phase, the value of net metering credits will be the average monthly clearing price in ISO-NE (that is, the wholesale retail rate). This would be a drastic change from the current value, which includes the value of all wires charges, such as distribution, transmission and transition charges. For other specific facilities, including municipal or other governmental entity (“MOOGE”) facilities, facilities for low-income off-takers and community shared solar facilities, the value of net metering credits will be based on the utility’s basic service kW charge, and will also exclude wires charges. The result of this exclusion in both categories is the value of credits being cut nearly in half. But like the Senate Bill, the Governor’s Bill also calls on Massachusetts regulators to “establish a solar incentive program for the development of distributed solar generation beyond 1,600 [MW] by solar photovoltaic facilities connected to a distribution or transmission system, which shall be a statewide program.”

Both the Senate Bill and the Governor’s Bill draw upon the recommendations from the Net Metering and Solar Task Force. The Net Metering and Solar Task Force was a group established last fall by the Massachusetts Legislature under Ch. 251 of the Acts of 2014, Section 7. The Task Force was responsible for reviewing the “long-term viability of net metering and develop recommendations on incentives and programs to support the deployment of 1600 MW of solar generation facilities in the commonwealth.” In its Final Report, the Task Force encouraged the Commonwealth to develop a solar incentive framework that would satisfy eight different program attributes, including promoting the orderly transition to a stable, equitable and self-sustaining solar market, and relying on market-based mechanisms and/or price signals as much as possible to set incentive levels such that the program would be readily adaptable to changing market conditions, all while minimizing costs, incentivizing diverse development, and promoting investor confidence. The Task Force cautiously qualified its recommendations by stating that “[t]he selection of a path for modeling is not an indication that a majority, or indeed any, of the Task Force members would like to see that path implemented,” and encouraged the DOER and DPU to lead a “comprehensive and transparent solar benefit/cost study to determine the value of impact of solar in Massachusetts” so that the Massachusetts Legislature, DOER, and DPU could more thoroughly evaluate the options presented by the Task Force, including the potential for an SREC III program to follow the highly successful SREC I and SREC II programs.

When the Legislature returns from its summer recess this Fall, the Joint Committee on Telecommunications, Utility and Energy will be confronted with the formidable task of reconciling these rival bills alongside the recommendations from the Net Metering and Solar Task Force, in order to help shape the future of solar in Massachusetts.

MA Solar Development Slow Down Likely as Net Metering Caps are Hit

Posted March 22nd, 2015 by SRECTrade.

This blog post is based on the post available at www.solarisworking.org.

In mid-March 2015, the net metering cap for public projects was hit in the National Grid territory (see red box in chart below). The Commonwealth’s legislatively-mandated net metering caps are based on each utility’s historical peak megawatt energy demand. Effective November 4, 2014  net metering caps were set at 4% for “private” projects and 5% for “public” projects of each utility’s historical peak demand, out of line with the state’s 1600 MW solar target. Representing 45% of total net metering capacity in Massachusetts, National Grid also services a region of Massachusetts where it is easier and less expensive for developers to find suitable sites for solar, but Unitil and NGrid-Nantucket are not far behind in hitting the caps in either the private or public sector. The outlier is the NStar (now EverSource) territory, where it is more difficult and more expensive to find suitable sites for solar.

As the caps across the state’s utilities are hit, new solar projects will no longer be eligible to earn retail credit for the excess power returned to the grid. Instead, they will be credited for any excess power at roughly a third of the retail rate. This decreased benefit would render many solar projects financially unviable. Although residential systems 10 kW or less and many commercial systems 25 kW or less are exempt from net metering caps, community shared solar and larger solar projects are not. As a result, development activity for these projects is expected to come to a halt unless the legislature raises the caps. Several bills have been filed this year to address the need to raise net metering caps in order to meet the Commonwealth’s 1600 MW solar target, and the future of the Commonwealth’s solar industry hangs in the balance as the Legislature reviews the bills on its table.

03202015 caps

Source: Massachusetts System of Assurance of Net Metering Eligibility. The data provided below reflects the best available estimate at the time of access of capacity (kW) interconnected, reserved, and pending that is receiving, or eligible to receive, net metering services. The accuracy of this data set is limited as adjustments to outstanding Applications for Cap Allocation may occur at any time. Data and aggregate figures included in this report should be used for informative purposes only. Verified updates provided in the Application Activity and Remaining Capacity Report will continue to be available on a weekly basis, each Wednesday. Posted 3/20/2014.

 

If you want to voice your support to raise the net metering caps, here’s what you can do:

  • Tell Governor Baker to support solar in Massachusetts.
  • E-mail or call your state legislators and ask them to raise net metering caps and to support the continuation of the successful SREC program in Massachusetts.
  • Find out who your elected officials are here.
  • Look up and track legislation here.

 

Visit The Official Website of the Executive Office of Energy and Environmental Affairs to learn more about net metering.