Massachusetts’ opportunity to get SMART about solar
Massachusetts has long led the nation in solar development and jobs. The Commonwealth ranks seventh in the nation in solar installations, second in solar jobs, and first in solar jobs per capita. This solar leadership has translated to hundreds of businesses, thousands of jobs and healthier communities and environment.
The Commonwealth’s solar growth is built primarily on two bedrock policies – net metering and the Solar Renewable Energy Credits (SREC). Right now, Governor Baker is working to replace one of these central solar policies, SREC, with a new Solar Massachusetts Renewable Target (SMART) program. Whether the SMART program is effective or not, along with whether caps on net metering are removed or raised, will determine whether Massachusetts continues to lead the nation in solar power.
The SMART program has a good aim – to nearly double the Commonwealth’s solar – and a strong underlying structure, but the proposed tariffs that will implement SMART need several key improvements to work.
Allow solar and storage companies to bid in the open market: As the tariff is currently drafted, utilities would have the right to the energy and capacity value of projects in the SMART program, potentially including projects with storage. For solar projects not receiving net metering, utilities should be given the right to use the capacity value of projects to bid into the Independent System Operator of New England (ISO-NE) market, but if they do not wish to, the project developer or owner should have the ability to bid into that market. For storage projects, the utilities should not have the right to the capacity value of those projects, and instead, allow the project developer or owner to bid into the market and use the storage to increase the projects value. Allowing solar and storage into these markets helps to lower the price for all ratepayers by increasing competition and cheap resources.
Protect customers from being kicked off SMART: The tariff gives utilities both vague and potentially significant leeway to remove customers from the SMART program, which will cause uncertainty and confusion as the program is implemented. Further details and clarity need to be added to the tariff to allow customers to respond to issues and to limit utility discretion in the decision.
No more fixed charges: The tariff would recover costs for the program through a fixed charge on customers’ bills. Fixed charges hamper the ability of customers to reduce their electric bills through distributed energy resources, like energy efficiency and solar. Fixed charges also adversely impact lower use, including many low-income, customers who pay a larger portion of their bills through fixed charges. Costs should be recovered through an energy charge as they are currently for the SREC program.
Modernize and simplify on-bill crediting: The SMART program puts into place an alternative On-Bill Crediting Mechanism meant to offer another option for projects to receive compensation other than net metering. While some portions of the On-Bill Crediting Mechanism are positive, such as the transfer of credits across a larger part of the Commonwealth, there are several key problems with the tariff as written. It is critical that allotment of credits to subscribers be based on electric bills rather than use; that owners be given the flexibility to allocate unsubscribed credits to existing or new customers; and that owners be allowed to update the list of subscribers at least monthly. Overall, the management of the new On-Bill Crediting Mechanism should be an opportunity to modernize and simplify the transfer of credits to customers or subscribers.