One-hundred members of the Massachusetts House of Representatives are collectively calling on House leaders to support legislation to lift the state’s net energy metering (NEM) cap and to stand against potential NEM rate cuts. Notably, the relevant cap applies to only larger solar projects, such as community, commercial and municipal ones, not residential projects.
Last year, both the House and Senate passed bills to raise the NEM cap and, thus, help keep Massachusetts’ solar industry thriving. National Grid has already reached its NEM limit, and Eversource is getting closer to its cap.
Although both the House and Senate bills would lift the state cap, the House version would slash the current value of NEM credits by changing them from retail to wholesale rates.
Now, as a conference committee continues trying to iron out the differences between the two bills and reach a compromise, a bipartisan group of state representatives has sent a letter to the House members serving on the committee, requesting that the leaders not follow through on the rate cuts.
In the letter, the lawmakers write that after the House vote in November, “our offices have been contacted by constituents, municipalities and businesses that are concerned this legislation will lead to job losses, jeopardize environmental progress, and raise electricity bills.”
The representatives say the possible “sharp cuts” to NEM credits would “irreparably harm” the state’s solar sector. “Resetting all new solar projects to the wholesale net-metering credit rate will make it prohibitively difficult to finance low-income, community shared solar or municipal projects.
“In addition,” the letter continues, “the transition to the wholesale rate for existing projects, while 20 years down the road, will lead to major bill increases for municipalities and other solar customers.”
The letter requests that the committee members consider these “critical issues,” maintain the retail NEM credit rate, grandfather in existing customers and raise the NEM cap “as expeditiously as possible.”
“We support your desire to reduce costs,” the letter says, adding that NEM credits aren’t subsidies, “but rather compensation for the value provided by solar generation exported to the grid.”
The letter cites a task force’s findings that “for every dollar solar costs ratepayers, it returns $2.20 in benefits.” Instead of “arbitrarily cutting” the NEM rate to reduce costs, the representatives suggest the legislature reform the state’s solar renewable energy certificate program.
The Solar Energy Industries Association (SEIA) has applauded the letter’s signatories.
“Massachusetts was our nation’s fourth-largest builder of solar energy capacity in 2015, and much of the state’s strong investment climate is due to successfully designed net-metering policies allowing Massachusetts businesses to go solar,” says Sean Gallagher, SEIA’s vice president of state affairs, in a statement. “However, the state has reached one of the net metering caps and, as a result, is seeing a reduction in solar installations.
“The Bay State employs 15,000 solar workers and was home to $800 million in industry investment in 2015,” he explains. “We join members of the House of Representatives in asking House leadership and the full Massachusetts legislature to pass legislation at the earliest opportunity that will re-open the local solar market, restore investments in communities and allow local businesses to rehire workers who have lost their jobs as a result of the caps on net metering.”
According to an Associated Press report, the House letter comes just a day after a group of Massachusetts mayors and town leaders issued a separate letter warning that the proposed change in NEM rates would hurt municipalities’ solar plans.
