Eversource pushing big solar project

Utility says it won’t use net metering incentive

EVERSOURCE ENERGY, a fierce opponent of solar subsidies on Beacon Hill, is seeking state approval to build solar farms across Massachusetts.

A spokesman for the utility said the net cost of its solar power will be 18 cents a kilowatt hour, which will be recovered through the company’s distribution rates along with a regulated rate of return on its capital investment. In its filings with the state, Eversource characterized its solar pricing as “highly competitive.”

The utility already operates solar facilities with a capacity of 8 megawatts in Pittsfield and Springfield. In the energy diversity legislation that passed on Beacon Hill this summer, the state’s utilities pushed for and won approval of a provision allowing them to install a total of 35 megawatts at each operating company. Since Eversource has two operating companies in eastern and western Massachusetts, it plans to ramp up to a total of 70 megawatts of solar at 15 locations.

The expansion has raised the eyebrows of solar developers and environmental advocates, who tend to view the state’s utilities as opponents of solar. But Eversource officials say the company’s concern has not been with solar power, but with the subsidies used to promote it, particularly a net metering credit that pays developers the retail price of electricity for any power they feed into the electric grid.

“We support solar energy, but we have to be mindful of the cost to customers,” said Eversource spokesman Michael Durand. “We’re not suggesting that other developers should or should not be taking advantage of incentives. That’s not our role. Our role is to make sure our system can accept the energy they produce. We spoke up in the past and we continue to speak up about the disparities of the cost of solar in Massachusetts as compared to other states, such as Connecticut. The difference is stark.”

To minimize the cost of its solar, Eversource said it won’t be tapping net metering credits. The company also plans to locate the solar farms on its own land and buy solar panels and other materials in bulk. The solar incentives the company will receive – the state’s solar renewable energy credits and a federal income tax break – will be used to offset customer rates.

“Clearly it’s cheaper than other solar alternatives,” said James Judge, the president and CEO of Eversource, at an energy conference in Boston on Thursday.

Massachusetts solar developers say they also use the federal tax breaks and the renewable energy credits to bring down the price tag of their solar projects. And they say net metering credits are an incentive they use to spread the benefits of solar; they often use the credits to help reduce the size of electric bills of participating third parties such as schools and government agencies.

A filing by the attorney general’s office indicates the bill impact of the Eversource solar projects will be 44 cents a month for typical Boston customers and $1.96 for typical western Massachusetts customers.

Eversource’s own filings with the state Department of Public Utilities estimate the project’s cost will be $2.55 to $2.93 per watt. The filings also said the average energy price of the utility’s solar will be “highly competitive with solar programs that rely on net metering and SRECs.”

“We are using the mechanisms that are in place to ensure that the credits we do get for producing the energy will be going back to our customers,” said Durand. Durand added that any savings resulting from the decline in the cost of solar equipment will be passed on to ratepayers.

But environmental advocates and solar developers say it’s impossible to compare utility solar farms, paid for by electric ratepayers, to solar projects initiated by private developers.

“I’m glad they can expand in a way to get savings back to their rate base, but I find it ironic that they are talking about fairness and equity,” said Josh Craft of the Environmental League of Massachusetts  He said net metering incentives are essential to encourage people who are renters or lower-income to get into the solar game. Without such incentives, rooftop and other small solar installations become much less affordable, he said. Craft added that there’s no evidence that non-solar customers are paying higher rates because other customers are receiving net metering credits.

“We had to fight for net metering incentives. The utilities were very resistant to them.  If we had gone the way that utilities had wanted, we wouldn’t have 1,000 megawatts of solar power in the state right now.  We want to make sure the economic growth engine for the solar industry continues, but that‘s not going to happen with just the utilities expanding their program,” he said.

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Joel Wool of the environmental group Clean Water Action said an increasing number of innovative models are being developed that allow neighbors to pool their resources and own solar power together.  “We have to go green as quickly as possible, but we also have spiraling inequality,” Wool said. “It’s important to increase the number of clean energy projects that look at access and inequality and are designed to give financial benefits back to people who own them.”

Both Craft and Wool wonder whether utility companies fight against net metering incentives because they are afraid of losing their customer base as more and more people produce their own power and rely less and less on the regional power grid. “But competition is good,” said Craft.