Saturday, July 19, 2014

In Massachusetts, Compromise Pairs Net Metering with Declining Solar Incentives

Solar panels in Boston (Credit: Click to enlarge.
In states around the country, there have been attacks on the net metering policies that support distributed resources, primarily solar power systems.  Utilities claim these policies give solar system owners a pass on paying for the infrastructure that connects them to the grid.  

Advocates claim that net metering gives solar system owners appropriate compensation, on a kW-hour for kW-hour basis, for the excess generation they provide to the grid by offsetting electricity they get from the grid when the sun’s not shining.

In most states the debate has led to a forced and unstable compromise, if not stalemate. In Arizona, the Corporation Commission (that state’s public utility commission) turned back utility demands for a prohibitive monthly charge on solar owners but did assess a charge of 70¢/kW per month (for example: a 5kW system would pay $3.50/mo) to support the distribution system. In Minnesota, the state allowed utilities to substitute a “Value of Solar” payment for net metering, but that option is not expected to be widely adopted by utilities because the calculated value of solar exceeds the retail value under net metering.

AEE supports net metering, but sees the state-by-state controversy over it as a symptom of a larger problem with utility revenue models.  AEE’s 21st Century Electricity System program is working with utilities and regulators to develop new business models that align utility earnings with public policy objectives and new choices for consumers.

Massachusetts has been a leader in this effort, most recently with the Department of Public Utilities’ order requiring utilities to develop grid modernization plans.  Now, the Bay State has broken new ground on net metering reform as well.

Through a painstaking engagement process, with each side making concessions, agreement was reached between the utilities, business organizations (led by Janet Gail Besser, VP of Policy and Government Affairs of AEE’s Partner Organization, the New England Clean Energy Council) and environmental groups to achieve a landmark compromise.  The new legislation, just filed as H. 4185, would accomplish the stated objectives of the Patrick Administration, including a deployment target of 1,600 MW of solar PV (four times current levels) by 2020, while addressing core concerns of the utilities.

In Massachusetts, Compromise Pairs Net Metering with Declining Solar Incentives

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