Local Legislators Support Net Metering Compromise to Advance Solar Projects

North Reading, MA - House Minority Leader Bradley H. Jones, Jr. (R-North Reading) and Senate Minority Leader Bruce Tarr (R-Gloucester) have endorsed legislation to raise the state’s net metering cap and promote more solar energy generating projects in Massachusetts. The bill passed the House, 154-1, on April 6, and the Senate on a vote of 35-0 on April 7.

House Bill 4173, An Act relative to solar energy, was reported out of a six-member conference committee on April 5, following more than four months of negotiations. Representative Jones and Senator Tarr both served as members of the conference committee, which worked to reconcile the differences between the net metering proposals that were previously approved by the House and Senate.

“This bill represents another important step in the state’s ongoing efforts to promote the expanded use of clean and renewable energy sources in the Commonwealth,” said Representative Jones. “At the same time, it includes a number of cost-saving provisions to ensure the state’s ratepayers are protected moving forward.”

“The Senate’s action today is a significant step towards stability for solar energy generation for our state and region. The strong linkage to our environment and economy is indisputable,” said Senator Tarr. “Ultimately, this bill will promote more solar energy generating projects in Massachusetts which will support thousands of jobs, lower the cost of incentive programs, and preserve full credits for municipalities and residents.”

House Bill 4173 raises the state’s net metering cap by 3 percent of the utilities’ peak load for both public and private projects, allowing a number of projects that had been stalled under the previous cap to move forward. The private net metering cap will increase from 4 percent to 7 percent, while the public net metering cap will increase from 5 percent to 8 percent.

The conference committee report also calls for changes in the way Massachusetts compensates solar producers when they sell excess solar energy they generate but don’t use back to the grid. For many years, the state has provided credits at retail rates, which currently average about 21 cents per kilowatt hour, to help grow the industry.

Under House Bill 4173, the state will move to a new “market net metering credit” equal to 60 percent of the full retail rate for all projects, equivalent to about 12 cents per kilowatt hour. However, the bill includes a carve-out so that residential, small commercial, and solar facilities owned by municipalities and government entities will continue to receive the full retail rate.

The bill also grandfathers in existing solar facilities that were previously approved by the Department of Energy Resources (DOER) to receive solar renewable energy credits (SRECs). These facilities will continue to receive credits at the higher retail rate for 25 years before transitioning to the new rate.

House Bill 4173 also allows utility companies to offset the costs of maintaining their infrastructure by submitting proposals to the Department of Public Utilities (DPU) to establish a monthly minimum reliability contribution for customers who receive net metering credits. This will ensure that all ratepayers using the electric grid distribution system are helping to pay for its maintenance, reliability and safety.

When reviewing these proposals, DPU must take steps to ensure that they allocate fixed costs equitably, do not excessively burden ratepayers, do not inhibit solar development, and are used to offset the costs of maintaining the electric grid. DPU is also authorized to exempt or modify the minimum contribution for low income ratepayers and to adjust the minimum contribution rate in the future.

To further encourage savings, the bill also includes provisions requiring DOER to adopt rules and regulations that will lower the cost of solar incentive programs for ratepayers. These incentive programs must encourage the continued development of solar renewable energy generating sources by residential, commercial, governmental, low-income, and industrial electricity customers.