Earlier this week, stakeholders in Massachusetts endorsed a compromise agreement to reform the state net-metering policy. Net-metering policies provide credits at full retail rate for excess generation provided to the grid. The agreement will remove a cap on the number of net-metered customers currently limiting the solar market in return for a minimum charge for all electric customers which will help utilities collect for fixed delivery costs.

Key Details

• The solar industry would benefit from the removal of a net-metering cap currently equal to 3% of the historical peak load; utilities benefit from the assurance that all customers contribute to the cost of the distribution system
• The agreement would also phase out and replace volatile solar renewable energy credits with tiered performance-based incentives
• Stakeholders negotiating the compromise included the Northeast Utilities, National Grid, the New England Clean Energy Council, the Solar Electric Energy Industries Association, and the Massachusetts Division of Energy Resources
• The next step is for the agreement to be passed into law by state lawmakers

Implications

Massachusetts offers a new model in the ongoing attempt to find a sustainable, win-win rate-making alternative to traditional net-metering policies. The use of an across-the-board minimum charge joins monthly net-metering fees (Arizona) and the value of solar tariff (Minnesota) as potential solutions to the problems with current ratemaking.

More Information

Greentech Media: http://www.greentechmedia.com/articles/read/Massachusetts-Solar-Industry-Utilities-and-Regulators-Reach-a-Deal-on-Sola

Framework Overview: http://www.seia.org/sites/default/files/resources/Metering%20and%20solar%20stakeholder%20meeting%206%2011%2014.pdf

This report is part of the Clean Tech & Sustainability Minute series. To view all featured Minutes, please click here.