The Red Sox may not win the Pennant again in 2014, but there’s still some good news if your business or municipality wants to install solar in Massachusetts: In a last-minute legislative compromise with utilities, the state’s net metering cap has been raised to 5% of grid capacity for government entities and 4% of grid capacity for private businesses.
This is a great—but temporary—win for installing affordable solar in the Bay State. If the cap hadn’t been lifted, solar savings and ROI for mid-size industrial, retail, and government solar installations would have been significantly reduced.
What’s Net Metering?
To understand why this is a savings win for solar, you have to understand the power (pun intended!) of the policy known as “net energy metering,” or net metering, for short.
Many people refer to net metering as “rollover minutes for solar.” It allows solar installations to get a credit for extra solar power produced during the day. Consequently, a facility can install enough solar panels to produce more solar energy than they need for daytime loads, and then that excess generation can be credited towards evening usage when the sun isn’t shining or on cloudy days.
To further explain, let’s say you have a retail store in Boston that’s open until 9 pm. Without net metering, your nighttime electricity usage would never be offset by solar production, no matter how much extra energy your solar panels produced during the day. The same goes for a 24/7 police station. Instead, any extra energy produced during the day by the retail store or police station would just feed back into the grid and be sold to other businesses without any compensation to you from the utility.
Utilities also benefit from net metering, since they sell your excess solar generation to nearby homes and businesses that don’t have solar. Plus, the utility’s centralized power plants don’t have to burn as much oil, gas, and coal; so, net metering helps to reduce utility fuel costs, not to mention air pollution.
Where Net Metering Stands in 2014 in Massachusetts
Massachusetts solar advocates and utilities had been working on a deal that would eliminate the cap for most commercial customers using net metering, but that compromise fell through at the last minute.
What did get through and signed by the Governor is Massachusetts Senate Bill S.2214, which raises the net metering cap for local governments from 3% to 5% of a utility’s peak load. The cap was also raised for private sector installations from 3% to 4%, demonstrating a lower net metering capacity ceiling in that sector right now.
For now, the legislative compromise maintains the level of savings for Bay State businesses and government entities wanting to go solar, but rest assured that enough solar will soon be installed to reach those new caps.
To avoid that, S 2214 also creates a new net metering task force that will allow solar advocates and utilities to work out an agreement that will hopefully eliminate the net metering cap forever.
Solar advocates are trying to show the utilities how onsite solar generation benefits all ratepayers by decreasing transmission and grid costs, and they want to set a value for solar watts compared to traditional gas, oil, and nuclear watts. The utilities want the ability to withdraw brown energy from the grid as needed and charge solar owners for the transmission costs of feeding solar energy into the grid. .
One way or another, the new task force has to come up with an improved net metering plan by March 2015, so stay tuned to the REC Solar blog for updates, or please contact us directly for more clarifications on the Massachusetts net metering program, or any Massachusetts solar or energy storage incentives.