House floats bill lifting solar net metering cap

STATE HOUSE NEWS SERVICE

HOUSE LEADERS ARE FLOATING a strategy to expand the solar industry in Massachusetts that would more than double the amount of installed solar capacity and eventually allow utilities to charge solar-producing customers a minimum service charge to cover the cost of maintaining transmission lines, poles, and wires.

House Speaker Robert DeLeo on Friday indicated his desire to sever the solar portion from a more comprehensive energy bill that he hopes to pass next year that would also focus on developing markets for wind, hydro, and other sources of renewable energy.

Since then, Rep. Thomas Golden, the House chair of the Committee on Telecommunications, Utilities, and Energy, has been circulating among stakeholders the House’s opening gambit for a solar expansion that would lift the cap on net metering to 2,400 megawatts.

The proposal, which is still just a concept, would also instruct the Department of Public Utilities to examine the value and cost of solar with the goal of developing a minimum bill for consumers who produce more energy than they consume. The minimum charges would not kick in until after the state reaches 1,600 megawatts of installed capacity.

DeLeo said he hopes the House will pass a solar cap bill before the winter recess starts in mid-November. With that goal in mind, Golden said “only time will tell” when a final bill might emerge from his committee or the Committee on Ways and Means for the House to vote.

“We’re trying to bring the energy community together and get them behind an expansion of solar while recognizing the cost implications. Some of the programming needs to be revamped and it’s fair game,” Golden said, confirming the details of the working template for a bill.

Massachusetts ranked fourth in the country for the amount of solar energy capacity installed in 2014 and has the sixth-highest total solar capacity in the nation, according to report released earlier this year from the Environment Massachusetts Research & Policy Center.

Solar advocates, however, have warned some growth has been stalled as 171 communities in National Grid’s service territory in eastern Massachusetts are bumping up against the cap on net metering. There are approximately 925 megawatts of installed solar capacity currently in Massachusetts.

The state’s net-metering program allows solar-producing businesses and municipalities to sell energy back to the grid at retail rates. The current caps are calculated as a percentage of the peak electrical usage.

The Senate in July passed legislation to lift the cap on net-metering to 1,600 megawatts, a total that matches up with the state’s goal of installing 1,600 megawatts of solar by 2020.

Gov. Charlie Baker, who supports that goal, followed up with his own bill to raise private and public caps by 2 percent each, representing a 50 percent increase in the amount of solar energy available for net metering credits for public entities and a 40 percent increase for private entities. Baker’s bill would also scale back net metering credits for commercial and municipal projects once the 1,600 megawatt level is reached.

Energy Secretary Matthew Beaton said he views the governor’s bill as the “compromise document,” balancing the interests of consumers, utilities, and the solar industry with “short-term relief from the cap.”

“I’m confident we’ll be able to continue the dialogue to move toward what we think is the right direction,” said Beaton, who has seen the House’s draft.

Beaton said lifting the cap to 2,400 megawatts “might be a little more than maybe we should go before net metering is redefined.” While not necessarily opposed to the idea of a minimum bill, Beaton said he believes the governor’s plan to allow for solar to be sold back to the grid at tiered rates for different types of projects would be “simpler” and give utilities the added financial resources to maintain the distribution and transmission side of the system.

Business groups such as Associated Industries of Massachusetts have argued that a significant lifting of the cap would add hundreds of millions of dollars onto consumer electric bills, and the utility companies have long called on the Legislature to impose a minimum bill on net-metering customers to pay for system maintenance.

Despite Baker’s urgency to also take action to begin importing large-scale hydropower into Massachusetts, there appears to be growing consensus that the current cap restrictions on solar, as well as federal tax credits due to expire at the end of 2016, make dealing with solar a pressing question and perhaps one on which officials can strike a deal.

The House’s working proposal would also direct the Department of Energy Resources to develop a new solar renewable energy credit (SREC) program, a carve-out for the solar industry that requires utilities to purchase certain quantities of solar credits to subsidize the industry.