Massachusetts Push Dependency on Renewable Energy
Pipelines continue to get approved by states across the country, while others continue to mobilize towards becoming independent of fossil fuels. A new bill and new incentive program were introduced earlier this year that push for more renewable energy. Three Massachusetts lawmakers have introduced Bill SD 1932 that promotes the steady transition to 100% renewable energy by 2050. This push for renewable energy comes at a time where many states are encountering opposing political views against renewable energy.
Bill SD 1932
A portion of Bill SD 1932 reads:
“Section 1. The purpose of this chapter is to steadily transition the commonwealth to 100 percent clean, renewable energy by 2050 in order to
(1) avoid pollution of our air, water and land, reduce greenhouse gas emissions, and ultimately eliminate our use of fossil fuels and other polluting and dangerous forms of energy;
(2) increase energy security by reducing our reliance on imported sources of energy and maximizing renewable energy production in Massachusetts and in our region;
(3) increase economic development by stimulating public and private investments in clean energy and energy efficiency projects;
(4) create local jobs by harnessing Massachusetts’ skilled workforce, business leadership, and academic institutions to advance new technologies, improve the energy performance of homes and workplaces, and deploy renewable energy across the commonwealth; and
(5) improve the quality of life and economic well-being of all Massachusetts residents, with an emphasis on communities and populations that have been disproportionately affected by pollution and high costs under our energy system.”
This follows the already proposed 2008 Massachusetts Global Warming Solutions Act that demands to reduce greenhouse gas emissions by 80% by 2050. If Bill SD 1932 passes, changes would occur in Massachusetts’s renewable portfolio standard and investments in renewable energy industries. These investments would demand more jobs in the field.
Solar Massachusetts Renewable Target (SMART)
The Department of Energy Resources (DOER) announced the SMART incentive program at the same time as Bill SD 1932. The DOER will finalize the SMART program in January 2018. This new incentive will transition from existing Solar Renewable Energy Credits (SRECs) to a dollar/kilowatt hour ($/kWh) tariff system.
The SMART incentive will be a tariff framework that incentivizes 3,200 MW of additional solar development for years to come. “Switching from SRECs to a $/kWh tariff system is expected to cut costs to the state and ratepayers by almost half while providing greater predictability for developers, investors, and facility owners. However, this change also means that compensation for solar energy — especially on commercial and utility scale projects — will be less generous than in recent history” (Ben Vila at CivicSolar, 2017).
Solar Massachusetts Renewable Target objectives
According to an article at Solect, the basic features of the SMART program are:
- 1,600 MW AC declining block program
- Applies to all electric distribution companies
- Same compensation rates across the state
- 10 or 20-year fixed price term depending on project capacity (10-year for small, 20-year for large)
- Compensation structure differentiated between sized-to-load and standalone systems
- Base compensation rates set according to project size
- Adders based on location, and those that provide unique benefits, including community solar, low-income, public, and energy storage projects
- Base compensation rates decline by set percentages in each block following Block 1
- Maximum project size of 5MW per parcel
Net Energy Metering vs. Incentive Programs
This transition of course has on-going conflicts. Net energy metering (NEM) subsidizes solar customers because of the lessening of their carbon footprint. As a result it also decreases additional charges and defunds maintenance procedures of the grid. Utility companies claim that disruption of the grid at peak times results in higher costs to non-solar customers. As a response to the NEM credits, the SMART program will remove the SREC incentives.
Ultimately, this will decrease costs for rate payers as the grid becomes more renewable energy driven. “Each utility zone will have a 20% carve-out for projects under 25 kW to encourage distributed generation and to ensure these projects are not crowded out by larger ones. Baseline $/kWh tiers for larger projects will be determined through a competitive procurement and bidding process with a ceiling price of $0.15/kWh, a market-based method of encouraging competition according to the DOER” (Vila, 2017).
Michael Judge, director of renewable energy at the DOER, announced this year that the agency is coordinating an extension of the SREC II program. The SREC II program will go until March, due to caps being met from net metering. Projects installed in 2017 that are larger than 25kW will be sold at a baseline of 70% of current market values.