Massachusetts reveals draft of new solar incentive program

The proposed policy to follow SREC-2 will feature a bonus paid per kilowatt-hour delivered, through a declining block grant schedule. Details have not been finalized at this time.

September 26, 2016 Christian Roselund

On Friday the administration of Massachusetts Governor Charlie Baker revealed its first draft proposal for a policy to follow the SREC-2 program and incentivize a further 1.6 GW of solar PV in the state to an auditorium of solar professionals.

The new policy is based on a declining block grant incentive system, to be paid out on the basis of energy delivered, similar to New York’s successful block grant program.

Under the draft proposal there will be different rates for projects of different scales up to 5 MW per site, with incentives will be provided for 10-15 years. The draft proposed at least 8 blocks, with tariff values decreasing 5% in each subsequent block. It is also possible that a certain portion of each block will be set aside for smaller projects.

Like a feed-in tariff system, the recovery of costs would be made through a fixed charge to all customers in the network. But unlike many standard offer or feed-in tariff policies the incentive will be paid “net of energy value”, which would allow the program to work as an adder to net metered systems.

Stakeholders present had a number of questions about how this detail would work, and afterwards several expressed to pv magazine that they felt there was a lack of clarity on this point.

Overall, the announcement drew sharply differing responses from more than a dozen speakers that lined up to make comments and ask questions. Solar Energy Industries Association (SEIA) described it as a “good start”.

“They have obviously put a lot of time and effort into developing this proposal,” SEIA Director of State Affairs, Northeast David Gahl told pv magazine. However, he added that “there are a lot of details that we still need to understand.”

Among those details is when this policy will begin. The draft proposes that the program could be implemented by next summer, however as eligibility for SREC-2 is expected to end in January, this could mean a gap of several months without incentives for PV projects in the state.

This is a potential outcome which clearly alarmed many in the room. “Projects will die on the vine before this new legislation is in place,” noted on speaker from Northeast Energy Co-op. “There needs to be something that will handle these types of projects in the interim.”

SEIA appears to agree. “Some kind of a guardrail, or some kind of mechanism needs to be put in place to avoid a lengthy gap,” Gahl stated in his testimony after the presentation.

SEIA describes emergency regulation as an option. “There may be some other mechanisms that DOER could employ, but I would think that is one way to execute the extension,” explains Gahl.

Overall, Gahl notes that at this stage the ambition of the program is important. “The first piece is that the proposal to have incentives to support another 1600 MW of solar development in Massachusetts,” states Gahl.

This final point is important. The ambition of solar policies under the administration of former governor Deval Patrick enabled the state to rise to the 4th largest solar market by 2013, however since that time Massachusetts’ solar industry has struggled with net metering caps and policy uncertainty.

As a next step, written comments will be taken on the draft proposal through October 21.

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