Landmark Massachusetts Net-Metering Bill Goes up in Smoke as Water-Downed Compromise Bill Is Agreed to on Last Day of Legislative Session

by Foley & Lardner LLP
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cellRowsAn eleventh-hour compromise by the Massachusetts House Ways and Means Committee effectively gutted the highly publicized net metering and solar power bill, which, as proposed, was considered by many including the Solar Energy Industries Association (SEIA) to be a boon for solar development in the nation’s fourth largest solar market in terms of both installed capacity and total jobs. The original bill, dubbed H.4185, mandated a 1.6 GW target of solar capacity by 2020, imposed a monthly minimum charge on all electric customers for distribution system maintenance, removed annual capacity restrictions on large solar projects, and transformed the current market-based SREC system to a fixed declining block grant structure (similar to a feed-in-tariff) administered by the Department of Public Utilities. In exchange, the original bill removed the cap on net-metering limits so that all excess power could be sold back to utilities at retail rates.

When the dust settled all that survived—although just barely—in the compromise bill (H.4385) is a slight raise to the net-metering cap from 3% to 5% of peak load for public installations and 3% to 4% for private installations. This increase is intended as a quick fix to the logjam of projects hitting the metering caps while still tightly controlling the overall pace of solar growth to appease utilities. With these changes, the bill was passed by the Massachusetts House and Senate and is expected to be signed into law by Governor Deval Patrick.

Many advocates of solar power had high hopes for the original bill passing. However, it was not without its detractors, including some in the solar industry who felt that it ceded too much control over the Commonwealth’s solar incentive program to utilities while doing away with the tried-and-true SREC program responsible for the robust solar growth in the first place.

Although it is unfortunate that agreement was not reached to remove the net-metering caps and impose the 1.6 GW solar mandate, there may be a silver lining to the compromise bill if the legislature and stakeholders can work together to pass a better bill next term around – in particular, a bill that is more transparent, less complicated, allows solar facilities interconnected to municipal systems to take advantage of new incentives, maintains the successful SREC system, and promotes innovation in solar and energy storage technologies. This may seem like wishful thinking based on what the legislature could ultimately agree to in the compromise bill, but those looking to develop and operate solar projects in Massachusetts have reason to be cautiously optimistic that at least some of these reforms will be passed in the future. Utility attitudes toward solar are slowly coming around, law makers are beginning to realize the true benefit of a solar economy, and the compromise bill established a net-metering task force to propose needed regulatory reforms.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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