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Legislature Wisely Takes Time on Solar Subsidies

Posted on November 19, 2015

Beacon Hill lawmakers ended formal sessions for 2015 without an agreement on solar-energy subsidies after AIM and other business organizations warned that expanding such payments would pump billions of dollars into the pockets of solar energy developers.

solarpanels.smallA House-Senate conference committee was appointed yesterday to resolve differences between two distinct approaches – a House bill passed Tuesday that would lift the cap on the amount of public and privately generated solar power that could be sold back to the grid at retail rates by 2 percent; and a Senate version more generous to the solar industry.

Conferees quickly acknowledged, however, that additional discussions will be needed when the Legislature begins the final year of its session in January.

John Regan, Executive Vice President of Government Affairs for AIM, commended lawmakers for taking the time to find a balanced solution to a complex problem.

“It’s important for Massachusetts to get this issue right, so we support the deliberate approach being taken by the Legislature. AIM supports the development of solar energy, but not in the form of a government-sanctioned giveaway that will harm the 99 percent of ratepayers who do not have solar,” Regan said.

AIM and six other business organizations sent a letter to the conference committee late yesterday opposing the Senate version of the solar boll passed earlier in the day. The groups outlined several objections to the Senate bill:

  • It unnecessarily increases the net metering reimbursement rate to an alarmingly high level ” up to full retail value in some cases ” instead of rates more in line with wholesale market rates. The House version thoughtfully gives the Department of Energy Resources the authority to establish different incentive levels for different types of installations through a transparent process, based on needs of solar developers, customers, and the electric grid ” using incentives to stimulate the right types of projects in the right areas.
  • It extends grandfathering of current installations to 30 years (up from 20 in the House bill) and excludes residential installations from any future changes. Increasing grandfathering to 30 years will unnecessarily add more cost to the program ” paid for by all other ratepayers.
  • It deletes the House plan to have the Department of Public Utilities determine a minimum bill for solar users. The minimum bill is not designed to be punitive. It is a charge that each customer needs to pay to maintain the reliability of the electric grid they are currently using as well as paying their fair share of social costs, including low- income subsides, environmental cleanup and energy efficiency that were deemed worthy by the legislature.
  • It will continue the highest subsidies in the region, at a time when other states are lowering subsidies ” and finding that lower subsides enhance their programs, not hurt them.

Net metering allows solar panel owners to be reimbursed for the electricity they send back onto the grid. The Legislature caps the amount of net metering credits allowed in a particular utility’s system. 

Senator Benjamin Downing, chair of the Joint Committee on Telecommunications, Utilities and Energy, said the House bill went “too far on the cost side” to lower reimbursement rates after the state hits its target of 1,600 megawatts of installed solar capacity, while House Ways and Means Chair Brian Dempsey said controlling cost for ratepayers who do not use solar is a prime concern to the House.

Downing and Dempsey are both part of the conference committee, along with Representatives Thomas Golden and Brad Jones, and Senators Bruce Tarr and Marc Pacheco.

The last-minute flurry of solar activity came on the same day that Attorney General Maura Healey issued a report on natural-gas pipeline capacity that looked at system reliability and greenhouse gas emission rather than costs.

 “Associated Industries of Massachusetts and its 4,500 members remain concerned above all with the unbearably high cost of electricity in the commonwealth. The attorney general’s study deals primarily with electric reliability rather than with persistently high electric rates and also does not address the lack of natural gas availability in certain parts of the state for heat and process needs. Both of these issues erode the ability of employers to expand and create jobs,” the association said in a statement.