Raise the net metering cap

MASSACHUSETTS SPENDS more than $28 billion per year on energy and electricity, with much of that money leaving the state to pay for fossil fuels from other parts of the world. Even with this mild winter, ratepayers struggle with seasonal changes that yield fluctuations in oil and natural gas prices.  Meanwhile, our state’s businesses cite high energy costs as one of the biggest obstacles to growth and a reason many companies choose to leave the state – or to not locate here to begin with.

What’s the answer to these drags on our economy?  At least part of the solution lies with solar energy, which is one proven way to drive down utility costs while also helping our environment.  But the local solar energy industry outlook is uncertain because the Legislature continues to wrangle over a key incentive program – the so-called “net metering” bill.

Net metering provides ratepayers with an important enticement to shift to solar:  once they’ve changed over, the policy allows them to sell the excess energy they produce back into the region’s electric grid, which in turn helps them to pay down the cost of installation.  Unfortunately, here in Massachusetts, regulations cap the amount of energy that can be sold back to the grid and in many parts of the state, We’ve bumped up against those limits. For instance, in several communities covered by National Grid and Unitil, two of the state’s largest utilities, caps have already been hit, meaning new solar customers are blocked from selling electricity back into the grid, therefore reducing their incentive to invest.  Eversource, another key utility, estimates that its territory, too, will soon hit the cap, leaving many homes, businesses, and municipalities stranded with aging, non-renewable energy sources.

Common sense would dictate that we simply lift and perhaps eliminate caps altogether.  Net metering has proved to be one of the most effective state policies for fostering renewable energy generation. It allows business owners to reduce their overall energy costs for themselves and their customers. This gives those who call the Commonwealth home – whether you are a homeowner, business, municipality, or a nonprofit institution – the opportunity to reduce and manage energy costs. The bottom line: net metering produces a more predictable economic environment for customers, which makes them more inclined to invest in this clean technology.

Historically, when the net metering caps have been reached, they have been raised by the Legislature to prevent the solar sector from losing momentum.  In fact, the recent unwillingness to raise the cap has already stunted that momentum, producing uncertainty in the market and delays in millions of dollars of investment right here in Massachusetts.  Today the solar industry employs more than 15,000 Bay State residents and, if we fail to address the net metering legislation immediately, we will surely shrink that job base, as consumers balk and solar providers lose business opportunities, leading in turn to layoffs.

At the tail end of last year, just before recessing for the holidays, Congress took an important step toward a cleaner energy future when it voted to extend the 30 percent Federal Income Tax Credit on the purchase of solar renewable energy systems. The preservation of the federal tax credit sent a powerful signal to the solar industry and its potential customers that the country still believes in the promise of solar energy and is willing to provide stable, predictable incentives to those interested in investing in renewable energy.

Now it’s the Commonwealth’s turn.  If we fail to expand the net-metering cap, solar projects across the state will be jeopardized, jobs will be lost, and consumers will have fewer energy options.  By embracing and expanding the state’s net metering policy sooner rather than later, we can provide critical stable and predictable economic models for the industry and for consumers.  And in doing so, we can reduce our carbon footprint and once again make it clear to the nation that the clean energy future starts here, in Massachusetts.

Ken Driscoll is founder and chief executive officer of Solect Energy, the leading full-service, commercial-scale solar company in Hopkinton.