If you are following the solar market in Massachusetts, you may have heard about the recent announcement on May 1st by Governor Patrick Duval that the state has already exceeded its 2017 goal of 250MW of installed solar capacity. Included in this announcement is a revised goal of 1.6GW of solar capacity by 2020, a laudable goal indeed! Here are a few article links that describe the details:
- http://www.nesea.org/renewable-energy/massachusetts-rockets-past-solar-goals-patrick-shoots-for-the-sky/
- http://cleantechnica.com/2013/05/02/massachusetts-crushes-solar-goals-aims-much-higher/
- http://www.seia.org/news/seia-applauds-massachusetts-new-solar-goals
Obviously, as a proponent of solar technology, I am ecstatic about the state surpassing its goal and the governor's ambitious recalibration. However, as someone working in the industry, I am cautiously optimistic about Massachusetts' solar future.
Having worked in the solar industry in Pennsylvania in 2010-2012, I know all too well what a state over-shooting its RPS goals can mean for SREC prices, and by extension solar photovoltaic (PV) system owners. In Pennsylvania, the over-shoot resulted in SREC prices dropping from over $300/MWh to about $10/MWh over the course of about a year. Despite a concerted effort by PV system owners and installers (including many small business owners), the Pennsylvania legislature failed to act, allowing the industry in the state to collapse.
Fortunately, with the governor supporting a massive increase in the Solar Carve-out Program Massachusetts appears to be headed down a slightly different path than Pennsylvania did. Assuming the governor's plan is enacted, Massachusetts SREC prices should remain relatively stable for the remainder of the decade. This should allow new system owners (and their financial backers) to see a comfortable return on their investments once their PV systems are installed.
On the other hand, the fortunate prediction above is based on the premise that Massachusetts' solar industry can continue the exponential growth of the past few years. (This is where the 'cautious' part of my optimism comes into play.)
For those of you paying especially close attention to the solar industry in Massachusetts, you may have noticed that the governor's May 1st announcement, coincided with another of important event for the industry. On May 1st, just before the close of business, the Massachusetts Department of Public Utilities (DPU) put into effect its new distributed generation interconnection tariff, the rules by which every grid-tied PV system in the state is installed.
While the increased goal was met with enthusiastic news and blog coverage, I suspect that many in the industry are unaware that the new tariff is in effect and that even fewer still have taken time to read and comprehend the (now) 133 page document!
The tariff, which went through a vetting and approval process that lasted the better part of a year, was modified in an attempt to clarify the process through which proposed distributed generation systems (such as PV) are safely installed. However, due in no small part to utility companies' initially tepid response to the solar industry's demand for a more fair and efficient interconnection process, the new tariff requires utility companies to track virtually every step of the interconnection process (from receiving an application through the customer being authorized to activate its system).
Unfortunately, the result is a quadrupling of the (already not insubstantial) administrative burden related to processing interconnection applications! While in the long-run this may mean that the solar industry gets a 'real-time' status bar of its applications, in the short-term the utility companies are now being forced to divert already strained resources away from pro-actively progressing projects toward system activation to the stenographic task of recording each step in the process.
Furthermore, due to an as-of-yet under-clarified Massachusetts DPU ruling related to net metering, the state's regulators are causing many apparently legitimate PV projects to be stymied unnecessarily. Initially, the DPU ruling 11-11-C was intended to preclude developers of massive solar projects from receiving more subsidies than those to which they were entitled, by requiring that utility companies only offer net metering services to customers through a single meter per legal parcel of land. However, the ruling cast its regulatory net perhaps a little to widely and disregarded the possibility of any exceptions for parcels of land that have multiple independent tenants (e.g. shopping malls, commercial buildings, and apartment complexes).
To make a long story short, it is hard to predict the ultimate result of the ever-evolving PV regulations, but where Pennsylvania's legislature may have let its solar industry languish in the free-market, Massachusetts may be allowing its solar industry to strangle itself in over-regulation. In other words, if Massachusetts is to meet its newly proposed 2020 solar ambitions, it may need to seek a more balanced approach in its regulatory policies.
Regards,
Sean Diamond
*Disclaimer and full disclosure: The author of this post works at National Grid, an electric utility company operating in the State of Massachusetts. This post is NOT intended to represent the views or opinions of National Grid. It is simply the personal after-hours reflections of the author.*
