Solar fight getting nasty

THE FIGHT OVER SOLAR POWER incentives is coming to a head on Beacon Hill, and it’s getting nasty.

Earlier this week, the leaders of six major business groups across the state wrote a joint letter to the House and Senate chairs of the Legislature’s Committee on Telecommunications, Utilities, and Energy urging them to scale back solar subsidies. The letter in several instances bends the truth to make its case.

The letter claimed Massachusetts has the highest solar subsidies in the continental United States, with the cost approaching $600 million this year. The business leaders said the state has a mature solar industry where installation costs are falling dramatically but solar subsidies “have not declined at all.” The letter also blamed much of the high cost of electricity in Massachusetts “on the support provided to energy policies tied to strict environmental goals.”

The six business leaders call for a sharp reduction in so-called net metering payments and urge state officials to retain the existing net metering cap, since “solar installations continue to move forward even with the cap in place.”

“We strongly encourage the Legislature and the Baker administration to adopt solar subsidies that are based on competition, that are more aligned with the true costs, that are transparent, and that guarantee that the most solar will be constructed at the lowest possible prices,” said the six leaders, who hail from the Massachusetts Taxpayers Foundation, Associated Industries of Massachusetts, the Massachusetts Business Roundtable, the Retailers Association of Massachusetts, the Springfield Regional Chamber of Commerce, and the Greater Boston Chamber of Commerce.

Dan Berwick, the vice president of strategy and business development at Borrego Solar Systems in Lowell, responded with his own letter claiming that the two chief arguments of the business leaders are “totally inaccurate.”

Citing market data, Berwick notes that the value of one state solar subsidy – the solar renewable energy credit – has fallen dramatically.  “A solar project built in Massachusetts in 2011 got $470 for a megawatt hour that it generated today, and a solar project built in Massachusetts in 2014 got $280 for the same megawatt hour.  Incentives have come down,” he said, adding that incentives should probably come down even further.

In a telephone interview, Berwick also disputed the notion that the state’s net metering cap was having no impact on the development of solar projects. Net metering is a billing system that pays solar developers rates equal to the retail electric price for the power they generate. A cap limits how many projects can qualify for net metering and the cap has already been reached in the service territory of National Grid.

Solar developers have been nudging ahead projects on the assumption that the cap on net metering will be lifted by the Legislature, Berwick said. Keeping a project moving ahead is fairly easy as long as financial outlays are in the four-figure range, Berwick said, but becomes much more difficult when costs reach five and six figures and lifting the cap remains uncertain.

Berwick said Thanksgiving will be when push comes to shove for the solar industry. He said he expects many solar developers to start pulling the plug on their projects if the cap is not lifted by Thanksgiving, when the Legislature is expected to recess for the rest of the year. Many on Beacon Hill want to address solar power as part of a broader energy bill, which would be unlikely to come up for a vote until next spring at the earliest.

If no action is taken on net metering until next spring, Berwick said, many solar developers would start pulling the plug on their projects because the remainder of the year would not be enough time to get their developments off the ground and qualify for the federal investment tax credit, which covers a third of a solar project’s cost and is set to expire at the end of the year.

“That’s why we are saying that if the Legislature doesn’t act by Thanksgiving, a big chunk of the pipeline in the Commonwealth will die,” Berwick said.

Sen. Ben Downing of Pittsfield, the Senate chair of the Legislature ‘s energy committee, said he wants to lift the cap on net metering before Thanksgiving and address energy more broadly next year. House leaders have said they favor dealing with energy issues through an omnibus bill, but have not rule out the possibility of addressing net metering separately.