Massachusetts’ Solar Ambitions Hurt by Net Metering Cap

Massachusetts is a national leader in solar energy development, ranking sixth in the U.S. for installed solar capacity. But right now, many of Massachusetts’ solar energy projects are gridlocked due to controversy over the net metering cap. Solar energy advocates worry that unless the net metering cap is raised, the commonwealth will be unable to reach its ambitious clean energy goals.

But exactly how are current regulations affecting the energy market, and how do these laws affect customers? To answer these questions, let’s take a quick look at net metering to understand what makes it so essential to the success of solar energy.

What is net metering?

Net metering is a billing system that incentivizes customers to use solar energy by crediting them for the electricity they generate and add back to the grid. This works because buildings equipped with solar energy generally have a PV system (photovoltaic system) on the roof that generates more solar electricity than the building actually consumes. Net metering allows companies to run the customer’s meter backward, effectively crediting them for the electricity they added to the grid. In other words, the customer is only charged for their net energy usage.

This system has made solar energy very affordable and has helped Massachusetts’ solar energy market to flourish. According to the Solar Energy Industries Association (SEIA), net metering policies are not only good for the consumer, but they’re also great for the efficiency of the grid. That’s because they prevent the loss of electricity and help providers manage peak electricity loads.

What’s the holdup?

The cap on net metering is stifling solar energy’s growth in Massachusetts. Currently, only a certain percentage of a utility’s distribution can use net metering. The cap is now set at 7 percent for private systems and 8 percent for government systems. All commercial, industrial, public and community solar projects in the commonwealth are affected by the cap. Until that cap is raised, few customers will be able to earn credits for the electricity they generate. In fact, three of the commonwealth’s utility companies have already reached the net metering caps within their service territories.

According to SEIA, failure to extend the cap has forced over $78 million worth of the state’s solar projects to be put on hold. Currently, 124 projects have been halted. Combined, those projects have the capacity of 51.2 megawatts (MW) — enough to power almost 5,400 homes.   

What is the solution?  

Sean Gallagher, SEIA’s vice president of state affairs, denounced the delayed action, citing the tens of millions of dollars in stranded solar investments. Gallagher called for the legislature to raise the net metering caps this year, explaining that “doing so will ensure significant investment in the commonwealth, create new jobs, protect thousands more and help meet the governor’s clean energy goals.” 

Sean Garren, Northeast senior director at Vote Solar, underscored the economic importance of Massachusetts’ 15,000 solar workers. “It is time to remove the caps on solar net metering and keep us on track,” he said.

The SEIA and Massachusetts partner organizations have testified at the state Capitol in support of two bills that would revive halted solar energy projects and incentivize more solar energy generation. They proposed that the state raise net metering caps by at least 5 percent, improve billing procedures, lower solar costs, and improve the structure of net metering caps to benefit low-income communities and community solar projects.

Will Massachusetts reach its clean energy goals?

Gov. Charlie Baker has instated ambitious clean energy goals for Massachusetts, which include doubling the size of the state’s solar market. Under the Clean Energy and Climate Plan for 2020, Massachusetts plans to cut 25 percent of greenhouse gas emissions by 2020. The methods of reducing emissions include everything from expanding energy efficiency programs, to improving building efficiency and instating zero emissions vehicles (ZEV) rebate programs.

The most recent piece of clean energy legislation is the SMART solar program, which aims to add 1,600 MW of solar energy to the Massachusetts electricity market. A replacement for the solar renewable energy credit system, START allows the base incentive price for solar power to be set through a competitive bidding process. However, the program does not raise net metering caps, which has many solar energy advocates worried. In a recent analysis of the program, SEIA concluded that START should be combined with a 5 percent net metering cap increase in order for the state to reach Gov. Baker’s goals.

While solar projects remain gridlocked in Massachusetts, policy makers and energy industry leaders alike should remain mindful of the state’s clean energy goals and the prosperity of its economy. At the same time, they should continue to seek out creative solutions to further reduce greenhouse gas emissions and provide clean, affordable energy to the state. This will allow Massachusetts to grow as a solar energy powerhouse that positively influences the rest of the country.

Subscribe to Think Energy Blog