In a move hailed as a sea change in the state’s climate fight, Massachusetts regulators approved a plan that would dramatically expand incentives for homeowners to invest in electric heat pumps as the state races to shift people off fossil fuels.
On Monday, the Department of Public Utilities approved a major rewriting of the state plan that provides energy efficiency incentives to consumers. Unlike previous versions of the Mass Save plan, the new one centers on curbing global warming by encouraging people to switch from oil or gas to electric heat or renewable sources, and also includes provisions to help make the transition more affordable to people in disadvantaged communities.
Among the $4 billion in new incentives is hundreds of millions of dollars for electric heat pumps, which, for the first time, will be available to gas customers looking to move off of fossil fuels.
The incentives are seen as critical to building momentum for the state’s quest to wean 1 million homes from fossil fuels by 2030, a massive undertaking that had languished because of high costs, anemic incentives, and, in some cases, active discouragement of homeowners looking to electrify their homes. In 2020, the state had converted just 461 homes.
“This is an ambitious, forward-looking plan,” said Jeremy McDiarmid, of the Northeast Clean Energy Council. Far from the historic reliance on upgrading and replacing light bulbs as a means of saving energy, he said, the new plan offers a path to transform buildings in the state in a meaningful way.
The state’s climate law mandates that greenhouse emissions be cut in half by 2030 and reduced to net-zero by 2050. The plan approved Monday is estimated to eliminate 848,713 metric tons of carbon dioxide in 2030 — the equivalent of taking 184,578 passenger cars off the road for a year.
Along with praise for the advances made in the plan came some harsh criticism. A number of climate advocates said it did not go far enough, especially with so little time to meet 2030 goals. Some blamed the DPU for walking back green energy measures, including restoring fossil fuel incentives that even the utilities that run Mass Save had recommended be ended.
“It seems like the DPU has minimized what could have been a transformative plan,” said Cameron Peterson, director of clean energy for the Metropolitan Area Planning Council, and a member of the Massachusetts Energy Efficiency Advisory Council, which oversees the Mass Save program.
The state Executive Office of Energy and Environmental Affairs, which includes the DPU, did not respond to a request for comment about the order.
In a joint statement, the administrators of the Mass Save program said that while they appreciate the DPU’s approval of many aspects of their proposed plan, “we have concerns about some fundamental changes to our proposals and how they may affect our ability to deliver on our ambitious goals.”
An earlier draft of the plan submitted by Mass Save administrators in November called for all but eliminating rebates for fossil fuel heating systems and for creating a new performance incentive structure that would push the program to do more in specific arenas, such as electrifying homes and reaching out to environmental justice communities.
The new DPU order walks those steps back, mandating that the state retain some fossil fuel incentives, and altering the performance incentives in a way that Peterson said will make it less enticing for the companies behind Mass Save to help achieve climate and equity goals.
“There are a number of tools throughout the original draft plan that the DPU seems to have rejected or minimized or weakened or modified,” said Peterson. “I worry that will make it a very challenging landscape for the program administrators to accomplish the greenhouse gas requirements set by the secretary, and to do all the good they were going to do not just for climate but also to advance our equity goals and reach underserved populations.”
In a joint statement, the groups Clean Water Action, Conservation Law Foundation, and Community Labor United said they were disappointed that specific measures to help environmental justice communities had been watered down and made vague. “DPU’s actions today send a clear message that they fail to understand, let alone value, the interconnections between poverty, racial, and climate justice that are now a formal part of their public mandate,” the groups said in the statement.
The draft plan also rejected an offering from the municipal aggregator Cape Light Compact that would provide 250 low- and moderate-income homes with solar power, heat pumps, and battery storage for free. The DPU argued that incentives for solar power are not allowed under its statutes.
Cape Light administrator Maggie Downey said the groups are appealing this ruling at the Supreme Judicial Court.
For many advocates, the reemergence of incentives for equipment run on fossil fuels in particular is hard to fathom. In doing so, the DPU cited a statutory requirement that the program offer all cost-effective energy efficiency options.
Amy Boyd, director of policy for the Acadia Center and a member of the Massachusetts Energy Efficiency Advisory Council, said the DPU decision “will result in more fossil fuel installations than there would have otherwise been.”
“The DPU still feels that its mandate from the legislature is to prioritize these small potential emissions savings, nickel and diming between fossil fuels,” said Caitlin Peale Sloane, vice president for the Conservation Law Foundation’s Massachusetts office. “After 10 years of working on Mass Save, it’s clear to me that the system will not be changed by the agencies. It needs to be changed by the legislature.”
Senator Cindy Creem said that she and her colleagues will be considering just that. “If the statutes governing Mass Save are preventing it from becoming a program that is fully devoted to decarbonization, then it may be time for the Legislature to reconsider those statutes — and the role of utility companies in administering the program,” she said.
Senator Mike Barrett, who was the lead author of the state’s 2050 climate plan, also said that more legislative involvement was needed, while crediting the DPU with doing a “decent job refereeing the situation under the laws as they exist today.”
Ultimately, he said, the state needs more tools in its toolbox to help spur the shift off fossil fuels. “Mass Save cannot be the only tool we use to clean up emissions in the building sector, but it is a tool that needs to remain in the toolbox,” he said. “It’s just that we need to upgrade the instrument from time to time.”