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Larger Developers Wary Of Mass. Solar Volatility

Solar policy in Massachusetts is not a house of cards in the sense that it didn’t all come crashing down when somebody bumped the table this summer. However, there is enough shaking and wobbling of the edifice to raise some concerns among those dedicated to developing solar power in the Bay State.

The aforementioned bump came in the form of the failure of widely touted legislation designed to restructure net-metering and project caps.

Scott Fenton, a partner at the Massachusetts law firm Bowditch & Dewey LLP, says the failure of the net-metering bill is just one symptom of impediments that have beset the solar sector in Massachusetts. The main effect of its failure to pass is the return of uncertainty and some degree of volatility to the market. One source of this instability is friction among competing solar interests and players in the commonwealth. Other impediments come from the structure of city and town government, where considerable authority rests.

“Massachusetts is probably not as solar friendly as it was four years ago,” Fenton says. “Towns have become more wary of large ground-mounted solar projects and their impact on the community.”

Fenton says the new solar renewable energy certificate (SREC) regulations that came out in the first quarter - known as SREC II - placed a lot of emphasis on managing what kinds of solar development the government wanted and where it wanted that development to occur. The sectors of focus include projects of 25 kW and smaller, ground-mount installations over 25 kW, arrays on brownfields and landfills, and large arrays of 6 MW or more - so-called “managed growth” projects. Each of these sectors is scored, with large landfills at the top and managed-growth projects at the bottom. These are capped at various levels, and these caps are subject to change.

“In my opinion, the caps are an attempt to create more opportunities by dividing up the market into four different sectors,” Fenton says. “They don’t want a handful of solar facilities to take up the lion’s share of the allotment of megawatts for that year.”

What strikes Fenton as odd is that the government is taking such an active role in directing how this growth is going to occur. By encouraging smaller installations, the policy promotes job creation. Looking at it from the developer’s perspective, the money is really in the larger-scale projects, where economies of scale and meticulous planning enable predictable returns. According to the SREC II incentives, Fenton says, the commonwealth would love to have every landfill turned into a solar facility. But you can’t always have a large solar development on a landfill - if it is not facing the right way, the incentives do not matter.

 

Moving targets

Regardless of the outcome, the system is clearly producing volatility. As the regulations are designed, the Department of Energy Resources (DOER) comes out with guidance on what the limits will be on the managed growth sector of 6 MW projects and over, which are the slots of most interest to the large developers Fenton represents.

This year, the cap is 26 MW. Next year’s cap is 80 MW. After that, things get fuzzy.

“In August, DOER came out with guidance saying 2016 is going to be 0 MW,” Fenton says. “But then, they recently changed that to 20 MW. So, it becomes a very volatile market for developers. How are they going to do these projects when the numbers are going to fluctuate like that?”

The legislation that failed in August was supposed to replace the SREC II regime with a stable platform to build toward the Patrick administration’s goal of 1.6 GW of solar deployed in the commonwealth by 2020. As it stands, the SREC II program will continue to reshape the development outlook according to how the pipeline fulfills the four-sector approach.

“Five years from now, we’ll look back and see whether this was a good idea or a bad idea,” Fenton says.

- Michael Puttré

 

HECO Unveils Plan To Clear Hawaii PV Backlog

Based on initial results from a battery of solar inverter tests, Hawaiian Electric Companies (HECO) is moving to clear the current backlog of customers awaiting approval to interconnect their rooftop solar photovoltaic systems in neighborhoods with high amounts of solar already installed.

Once the final results of the inverter tests are available, HECO says it will evaluate the applicability of these solutions for future customers who apply for interconnection.

The backlog of interconnection applications has been a sticking point for solar installers and developers for more than a year. The process of clearing out the backlog is expected to take about five months.

Under the plan, by April 2015, customers currently awaiting interconnection under the net-energy metering program to neighborhood circuits with PV capacity over 120% of daytime minimum load will be approved for interconnection after meeting key conditions.

First, the PV systems must use inverter models that meet stricter settings for preventing transient overvoltage, or rapid voltage spikes, that can endanger customers, their appliances and utility equipment. Second, PV systems must use inverter models capable of complying with Hawaiian Electric specifications to “ride through” possible unstable frequency and voltage conditions during emergencies on the island-wide electric grid.

These actions are based on the favorable results from initial inverter testing. HECO says it will consider the final testing results and evaluate the applicability of these solutions for future customers who apply for interconnection.

In some cases, the normal technical review process may identify other issues that require more significant equipment upgrades. About 250 applications may be in this category, but HECO anticipates these should be approved for interconnection no later than December 2015.

“We have been working diligently with inverter manufacturers, other national technical experts and the solar industry to address potential safety and reliability issues that no other utility in the nation has yet faced,” says Jim Alberts, Hawaiian Electric senior vice president of customer service, in a statement. “Applying results of recent inverter testing, over the next five months we expect that we’ll be able to approve almost all of the customers who have been waiting for interconnection on these high solar circuits.”

HECO says that once inverter models have been certified by Underwriters Laboratories, inverter manufacturers, installers or knowledgeable customers must reset inverters to these new settings. In the meantime, installed inverters must use the recently approved interim settings.

One PV industry professional based on Oahu says the inverter tests are going to be the key issue on which this solution rides. Inverter manufacturers devoted primarily to the residential market - about 10 kW and less - may have difficulty meeting the requirements promptly. Inverters not able to meet the specifications HECO devises will remain in applications limbo.

 

Obligation to clear

“Clearing the backlog is an obligation we have been working to fulfill for over a year,” says Peter Rosegg, senior spokesperson at HECO. “Other groups have been approved based on other changes, and this represents the last major group waiting. After this, we expect to have no backlog, only the normal throughput of applications and prompt approvals upon proper review.”

HECO consists of Hawaii Electric and two subsidiary utilities, Maui Electric and Hawaii Electric Light, each with separate service areas. HECO says all of those on the waiting list are Hawaiian Electric customers.

As of October 2014, the list of applications in progress for Hawaii Electric’s service area on Oahu includes the following categories and numbers of customers:

• About 1,100 customers are seeking interconnection on circuits with installed PV equal to or less than 120% of the daytime minimum load. HECO says these applications are moving through the normal process and are likely to receive prompt approvals.
• About 1,000 customers are awaiting completion of upgrades to substations or other modifications to their own systems and will soon receive approvals.
• About 2,700 customers are on circuits over 120% daytime minimum load. These will be approved over the coming months as this plan is implemented.

Similar approval plans will go into effect for Maui Electric and Hawaii Electric Light. Each utility has about 330 customers awaiting approvals on circuits with high amounts of installed PV.

“We would be intent on clearing the backlog no matter what,” Rosegg says. “But clearly our plans for an improved queue process and tripling rooftop solar, as we have promised in filings with our utilities commission, require clearing the backlog.”

 

Solar Businesses Show Support For EPA Plan

Over 500 solar industry leaders from hundreds of businesses have signed and issued a joint letter to the White House, endorsing limits on carbon pollution from power plants and advocating that solar energy become a focal point of the U.S. Environmental Protection Agency’s (EPA) proposed Clean Power Plan.

“As solar power installers, manufacturers, designers, aggregators, product suppliers and consultants, we welcome the unveiling of the Clean Power Plan,” reads the letter, organized by the advocacy group Environment America. “This plan is a critical step toward transforming our energy system to one that protects our health and environment, and that of our children.”

In June, the EPA proposed its Clean Power Plan, which would require power plants to cut carbon emissions 30% nationwide below 2005 levels by 2030. The plan is open for public comment until Dec. 1 and is slated to be finalized next year.

Solar businesses and groups say they are ready and eager to help meet and exceed the pollution reductions proposed by the EPA.

“As a nation, we’re poised to finally turn the page from sooty smokestacks to sunnier skies - and America’s solar energy industry is uniquely positioned to play a key role in the fight against climate change,” says Rhone Resch, president and CEO of the Solar Energy Industries Association. “Look at what’s happening today. There’s enough solar in the country right now to power more than 3 million American homes, and we’re just scratching the surface of our potential.”

Environment America says solar power is on the rise across the U.S., where every four minutes another home or business goes solar. According to the latest solar jobs census from the Solar Foundation, the solar industry employed roughly 143,0000 people in 2013, adding more new employees last year than any other sector.

“Solar creates jobs and spurs job training at all levels and in all communities and grows the economies of solar-friendly states,” says Polly Shaw, vice president for government affairs at SunEdison. “And clear, long-term policy signals like the EPA’s Clean Power Plan give manufacturing leaders like SunEdison the confidence to invest in new technology and infrastructure innovations.”

As solar power capacity in the U.S. has grown, its costs have fallen dramatically, dropping 51% since the start of 2011, according to Environment America. The group says declining prices are one reason solar is becoming more accessible, more versatile and more equipped to play a big role in carbon pollution reductions.

“Solar power delivers significant environmental and financial benefits to consumers,” comments Vikram Aggarwal, CEO of EnergySage, an online marketplace for solar power systems. “The timing for this proposal couldn’t be better. The Clean Power Plan will help the solar industry to reach more households quickly, accelerating and amplifying solar’s impact on preventing climate change.” R