THE HOUSE WAYS AND MEANS COMMITTEE unveiled a solar power bill Monday night that would temporarily lift the cap on a key incentive but then rein in costs associated with the program and possibly allow utilities to collect monthly fees from solar power generators.
Solar developers and the state’s two major utilities have been waging a fierce lobbying war over so-called net metering incentives the last few months, with solar advocates urging lawmakers to support a fast-growing industry by lifting the cap on net metering and utilities arguing that the program is too expensive for their customers and needs to be curtailed.
The same battle has been playing out in states across the country, with utilities saying they are just looking out for the financial interests of their customers and environmental advocates charging that utilities are trying to slow down solar because it represents a threat to their business model.
The House bill gives a nod to both utilities and solar developers, but some solar advocates said the bill overall would be devastating to their emerging industry. “The sun is setting on solar development in Massachusetts,” said Sean Garren, the northeast regional manager of an advocacy group called Vote Solar. “This redrafted bill offers a little to address our immediate solar crisis, but sounds the death knell for consumer solar investment in the long run.”
The House bill would give solar developers what they have been demanding, an increase in the so-called net metering cap that would allow projects to move forward before a key federal tax credit expires at the end of next year. But once the initial state target of 1,600 megawatts of solar capacity is reached, the bill would dramatically change the way net metering works.
Net metering is a billing system for solar power generators who feed electricity into the regional power grid. Under the current system, solar developers receive credits equal to the retail price of electricity for the power they deliver to the grid. The retail price includes the cost of the power plus distribution and transmission charges assessed by utilities.
Once the 1,600 megawatt target is reached, the House Ways and Means bill would dramatically reduce the value of the net metering credits solar developers receive for their power. Instead of a net metering credit valued at the retail price of electricity, developers would receive a “market net metering credit” that would be equal to the average wholesale price of electricity. The difference between the retail and wholesale price of electricity is substantial. The retail price of electricity is about 16 cents a kilowatt hour, but the wholesale price is half that.
The bill would also allow utilities such as Eversource and National Grid to petition the Department of Energy Resources to establish a fee called a “monthly minimum reliability contribution” for customers who receive net metering credits. Utilities say many customers who generate solar power produce more electricity than they use, and end up paying nothing to support the operation and maintenance of the grid.
“Any such minimum contributions shall ensure that all distribution company customers contribute to the fixed costs of ensuring the reliability, proper maintenance, and safety of the electric distribution system,” the House bill says.
The House bill also directs the Department of Energy Resources to develop rules and regulations to lower the overall cost of the state’s solar incentive programs. The rules and regulations would have to be approved by the state Department of Public Utilities.
Members of the House Ways and Means Committee have until 10 a.m. Tuesday to vote on the measure. The full House is expected to take up the bill in the afternoon and, if it is approved, send it along to the Senate. The Senate approved its own net metering proposal this summer.
The House bill is very different from the Senate bill and a proposal filed earlier by Gov. Charlie Baker. The Senate bill would lift the net metering cap and direct state officials to come up with a sustainable incentive program for the solar market. The governor’s bill would lift the cap and, once the initial 1,600 megawatt target is reached, establish a three-tier payment system for net metering credits. Residential customers would continue to receive the retail price of electricity for their credits; commercial customers would receive the wholesale price; and government and low-income customers would receive a price slightly higher than the wholesale price.
Solar developers had been hoping the net metering cap would be lifted before the Legislature recesses until next year on Wednesday, but the chance of the Senate going along with the very different House approach that quickly seems unlikely. Many solar developers say they may have to pull the plug on their projects if the net metering cap is not lifted before Thanksgiving. Solar developers say it takes a long time to put together a project, and they can’t push ahead with so much uncertainty, particularly with a key federal tax credit set to expire at the end of the year.