Is Baker's bill good for solar?
Last Friday, the Baker administration filed a solar bill aimed at addressing the net metering caps that have stalled solar projects across the Commonwealth. This move comes shortly after the Senate voted unanimously to advance legislation that would raise and then eliminate net metering caps.
If the Baker administration is to be believed, this bill is great for solar and will keep the industry growing for a long time. Is this true? Is the Baker bill good for solar? Before you can answer that, you need to understand the essential ingredients for a good solar bill. In MassSolar’s view, a good solar bill must do at least the following four things:
- Eliminate the net metering caps;
- Provide fair and equitable access to solar;
- Provide fair compensation for solar; and
- Set an ambitious solar target to help meet GWSA emission reduction targets.
Does the Baker bill do any of these things? The answer is a resounding NO. Here’s why:
Net metering caps. Governor Baker’s legislation does not eliminate the net metering caps. Instead, it raises them by 2% each for public and private projects. In National Grid territory, a 2% cap increase equals about 100 MW of solar. Given the current backlog of projects, this new cap would likely be hit within 3 -6 months. That would put the solar projects in 171 communities back on hold, stall the market and risk further job losses. Net metering caps would also continue to hinder the growth of non-solar technologies, such as anaerobic digestion, across Massachusetts.
While the legislation grants DPU has authority to raise the caps, they can only be raised if doing so is in the “public interest”. Given the DPU’s skepticism about the benefits of solar, as evidenced in Chair O’Connor’s opening remarks in the Net Metering and Solar Task Force report, along with utility opposition to increasing net metering caps, convincing the DPU to act would be an uphill battle. As such, the Baker bill does not create a long-term, sustainable path for solar. Instead, the Baker bill means solar will remain hostage to net metering caps and solar businesses will continue to lack the certainty and predictability they need to be successful.
Fair and equitable access to solar. Everyone should have the opportunity to access the benefits of solar, regardless of their income level or whether they own a sunny rooftop. The goal of fair and equitable access to solar is best achieved by treating community shared solar (CSS) projects and low income solar projects the same as residential rooftop systems. Baker’s bill works against this goal by dramatically lowering net metering credit values for new CSS and low income solar projects once the 1600 MW solar target is reached. This will make many CSS and low income solar projects uneconomic and thwart efforts to use solar to solar energy affordability issues in low income communities.
Fair compensation for solar. Solar should be compensated fairly for the value it provides to the grid. To determine what fair compensation is, the benefits and costs of solar should be evaluated in a Value of Solar study, with a net metering credit value established based on the results. Unfortunately, the Baker bill skips the Value of Solar study step in favor of drastically cutting compensation for new solar projects (except small residential projects) once 1600 MW of solar is installed. This despite the fact that study after study has shown that the value of solar electricity often exceeds retail electricity rates.
Under the Baker bill, new ow income, community shared solar and municipal solar projects would no longer be credited for excess electricity at retail rates. Instead, projects would receive the basic service kilowatt hour (kWh) charge for power exported to the grid. The basic service kWh charge is the energy supply portion of your electicity bill and is lower than retail rates, which also includes distribution and transmission charges. For all other types of solar projects, excess electricity would be credited at the average wholesale energy price for the given month. This is typically even lower than the basic service kilowatt hour charge.
Ambitious solar target. The Commonwealth has committed to reducing greenhouse gas emissions 80% by 2025. To get there, we need to power our economy with 100% renewables. Solar currently represents 2% of our electricity mix but solar has the technical capacity to generate twice the amount of electricity we consume. Setting a bold, ambitious target, such as 20% solar electricity by 2025, will put Massachusetts on the path to a cleaner energy future while giving the solar industry the long-term certainty it needs to keep solar working for Massachusetts. The Governor's legislation, not only fails to set an ambitious solar target, it's likely to slow the growth of solar in Massachusetts once the 1600 MW solar target is reached.
In summary, the Baker bill is a big step backwards for solar in Massachusetts. We can do better. What does better look like? Check out the Next Generation Solar Policy Framework.