Should Massachusetts lift the cap on “net metering” to allow for greater solar energy development?
Michael D. Yunits
Norton town manager
The issue of whether to raise the solar net-metering cap is being discussed across the state. The benefits of solar development are impressive. In Massachusetts, the solar industry is responsible for about 12,000 jobs, and 850 megawatts of power. Solar energy also helps reduce electricity costs for businesses, families, and local governments.
Raising the cap on net metering -- which allows customers to receive credit on their utility bills for solar power sold to the electrical grid -- will allow project development in towns where caps have already been reached.
Norton is one of more than 50 communities with projects held hostage to the net-metering cap. The Commonwealth’s solar program would allow Norton to turn a 10-acre brownfield into an energy field, producing much needed revenue and cost savings. This 1.6-megawatt project would generate more than $6 million in financial benefits to Norton over 20 years through electricity savings, lease payments, and taxes. This revenue would provide relief to local taxpayers who have, since the 2008 recession, borne more and more of the budget funding burden. Two years and thousands of dollars later, this project on Norton’s capped landfill is on hold until the cap is raised.
The Senate recently passed legislation to lift the net-metering cap, and Governor Baker has unveiled his bill to raise existing net-metering caps. The House of Representatives now has the opportunity to take action to continue the Commonwealth’s solar development.
The shock and burden of last winter’s rate hike has customers searching for relief. Solar energy is most productive during peak summer demand times, reducing electricity prices for everyone. Because it is produced where it is needed, expensive transmission line infrastructure needs are also reduced.
Solar development has been a boon for the Massachusetts economy. When we act locally, we have an impact globally. Solar power is good for our town, our state, our economy, our health, and our planet. With only an 18-month window to start projects before the federal investment tax credit is phased out, I encourage the Legislature to act quickly to raise the cap so that towns across the state can take advantage of the benefits of solar power.
Senior vice president, government affairs, Associated Industries of Massachusetts, an employer association with a regional office in Bridgewater
The next time your friend mentions that he or she paid a “zero” electric bill thanks to a solar array, the friend may also want to thank you.
After all, you helped pay for it.
Let’s begin with a quick lesson in electricity economics. Your retail cost for “electricity” includes three parts -- the cost of energy itself, the expense to the utility of maintaining the electric wires down your street, and what the utility pays to bring electricity from distant generation stations.
When a solar customer generates more power than can be used at any time, the excess goes back to the utility to offset power the customer uses when the sun isn’t shining. This is net-metering.
Net-metering is capped under current law to contain costs. Overly generous subsidies in Massachusetts have already encouraged solar developers to reach the cap twice, and these developers now claim the entire solar industry will cease to exist if the caps are not raised yet again.
Associated Industries of Massachusetts and its 4,500 member employers believe the net-metering cap should not be increased until the solar program is reformed to account for both lower solar installation costs and increasing costs to non-solar ratepayers.
It costs the utility the same amount to service a solar customer as it does a non-solar customer. Solar customers are never “off the grid.” Billions of dollars in energy infrastructure needs to be ready to service anyone, even if they need electricity only one hour a month.
Solar users typically pay little or nothing to maintain their share of the electric grid. So all of those costs are passed to other ratepayers. This cross-subsidy is already hundreds of millions of dollars per year and on track to total as much as $4 billion by 2020.
In a state where electricity costs are almost double the national average, we must be mindful of the additional burden these costs have on business competitiveness.
Other states, including Connecticut, have recently reformed their solar programs to reduce cross-subsidies. The solar industry in those states has not shriveled up and died, but instead continues to expand.
There is no reason Massachusetts cannot do the same.