Massachusetts expands solar net metering, bucking a national trend

The Massachusetts Department of Public Utilities (DPU) issued an order revising the state’s Net Metering Program regulations, expanding access to a broader solar customer base.

Net metering is a process by which solar customers export their excess electricity production to the grid in exchange for credit on their utility bills. The rate structure has been a primary driver in distributed, rooftop solar across the nation.

DPU’s order now allows municipal and state-owned solar asset owners to take advantage of net metering. It also enables the transfer of net metering credits between utilities. And large commercial solar facilities are exempt from net metering caps. These moves, along with a restructured cost recovery plan, are estimated to save ratepayers $10 million.

Massachusetts has tapped 10.8% of its rooftop solar generation potential, among the highest adoption rates in the country, according to Environment America. The new regulations are expected to help spur the deployment of solar facilities across the state, support Massachusetts’s move towards electrification, and cut costs for residents and businesses.

This regulatory change bucks a national trend set by California, a state that has sent its rooftop solar industry reeling with its transition to Net Energy Metering 3.0. After slashing its net metering credit rates by about 75%, among other moves, the state has suffered over 17,000 job losses, major bankruptcies, and a sharp drop in rooftop solar installations. Analysts say that California is now off-track for reaching its climate goals. Other major rooftop solar markets, including North Carolina, Arizona, and others have followed California in cutting net metering rates, despite the industry tailspin.

Meanwhile, Massachusetts has doubled down on net metering, recognizing the system-wide cost and resilience benefits of rooftop solar.

“Net metering enables customers to cut their energy costs,” said DPU chair James Van Nostrand. “This is another example of the important nexus between the clean energy transition and maintaining affordability for Massachusetts residents.”

Massachusetts sets caps on how much capacity of rooftop solar can be eligible for net metering. It used to have an exemption for small systems of 10 kW or less, but this cap is now lifted to 25 kW.

Furthermore, behind the meter systems over 60 kW, and up to 2 MW are now exempt from the net metering cap.

Changes to the program include:

• New ability to transfer net metering credits from certain net metering facilities served by one utility to customers of a different Massachusetts electric distribution company (EDC); 
• Exempts facilities that serve on-site load and are larger than 60 kW and less than or equal to 2,000 kW (if private) or 10,000 kW (if public) from the net metering caps (for example commercial rooftop or adjacent parking lot canopy); and 
• Changes to the treatment of the Net Metering Recovery Surcharge (NMRS) to reduce costs of the program to ratepayers.

DPU said the moves were made to help the state adhere to its 2021 climate action plan. The full summary of net metering revisions can be found here.

Why rooftop?

Recent modeling from Environment America found that rooftop solar has technical potential to meet 45% of U.S. electricity demand. Today, it only represents about 1.5% of the electricity used.

“Today, in Massachusetts, you can get your energy straight from your roof,” Neumann told lawmakers. “It’s making less and less sense to pay for power from a distant plant spewing pollution when we can soak up the sun on our rooftops.”

Rooftop solar “has myriad benefits for the environment and consumers,” said the report. This includes reducing the need for dirty power plants and expensive transmission lines, providing lower costs, and can help to increase the grid’s resilience to extreme weather and other shocks.

Distributed solar helps squeeze other emitting sources off the grid. Take the 1.4 GW Mystic Generating Station serving the ISO New England grid operator region. The natural gas plant used to be fired up in the winter to prevent blackouts, but the grid operator said increased solar capacity has made the grid reliable enough to shut Mystic down. Over 5.4 GW of solar, most of it rooftop, has helped enable the transition away from fossil fuels, even in the harsh New England winter.

Another environmental benefit of rooftop solar is the reduction of land use for energy development, sometimes referred to as “energy sprawl.” For each gigawatt of rooftop solar installed in lieu of utility-scale projects, over 5,200 acres of land are saved.

Further, rooftop solar can save the nation on rising transmission needs and costs.

“Because rooftop solar generates power that can be used on-site reduces the need for transmission from central generating stations, potentially saving states and municipalities time and money on their energy transitions,” said the report. “To reach renewable energy targets, some expansion of transmission infrastructure will be necessary, but maximizing the potential of rooftop solar can help to minimize the amount we need to build.”

Solar is also now the most cost-effective new generation source in most markets and most conditions in the United States. On average, new-build solar costs 29% less than the next-cheapest fossil fuel alternative, said Ernst and Young.

This article was updated to accurately reflect the net metering exemption thresholds.