Letter to Legislators Regarding An Act Relative to Net Metering and Solar Power, H. 4185

I am writing on behalf of PowerOptions to urge the passage of H. 4185, An Act Relative to Net Metering and Solar Power, that will uncap solar net metering and create new opportunities for renewable energy and jobs in Massachusetts.

PowerOptions, a 15 year old non-profit, is the largest energy buying consortium of its kind in Massachusetts, exclusively for non-profits and government entities. Our 500 members rely on our competitive electricity and natural gas supply offerings, and our successful solar power-purchase agreement offering. That solar program has been able to provide development opportunities for 30 MW of photovoltaic projects for many non-profit institutions and public entities in the Commonwealth, including many housing authorities, over the past two years. This legislation, if passed, would provide benefits for Massachusetts consumers, the solar development community, the environment, and even utilities.

We urge you to consider the benefits this legislation will bring. It will lift the current constricting limits – “caps” – on net metering, and it will harmonize the current solar renewable energy credit (SREC) program with net metering programs. The Net Metering cap constraint has slowed development for many institutions over the past few years. This legislation recognizes the importance of eliminating the caps. While there have been adjustments, most recently in 2012 legislation, to increase the Net Metering cap as development increased and constraints were anticipated, the adjustments have not moved in lock step with the solar market incentive programs. This has created disjointed and discouraging development schedules. PowerOptions members such as colleges, housing authorities, and regional public school districts are among many in the National Grid territory, for example, that have had projects stuck in neutral for months because of the Net Metering Caps. This legislation eliminates the need to periodically revisit the caps and allows for an increase of regulatory certainty in the marketplace. Unfortunately without enacting this legislation or raising the Net Metering caps, many projects would likely stop altogether.

This bill harmonizes the state solar incentive and the net metering credits program resulting in lower consumer cost impacts while providing sufficient, fixed revenues to the developer and financial benefits to the host of solar projects. The proposed Declining Block Incentive (DBI) framework is innovative because it sets a fixed incentive level (solar incentive plus net metering credit) for a block of solar capacity so financial windfalls are not possible and consumers are protected. At the same time, the DBI structure assists project developers because the incentive payment is a known, fixed payment for 15 years, eliminating the volatile, uncertain SREC market incentive. The DBI framework in the legislation aims to periodically lower the incentive payments until the incentives reach the level of other renewable sources (e.g. wind) that are supported by the non-premium Class I REC market. This reduces consumer costs and puts all forms of renewable energy on a level playing field. By harmonizing the incentive structure, solar virtual net metering project opportunities are preserved and will continue to be available for public entities, including low income housing authorities and municipalities. This solar net metering option is essential for customers that want to take part in solar development but lack adequate space for on-site, behind the meter, solar projects.

This bill represents an innovative and progressive compromise between utilities and solar providers, benefiting the consumers as well. For these reasons, we urge you to enact H. 4185 before the end of the Legislature’s formal sessions.