Manuel A. Fontan, ERS, for Zondits
Solar photovoltaic (PV) power is understandably a hot topic in Massachusetts. This kind of energy has a favorable market outlook, along with other renewable sources and efficiency measures, as cities look toward smarter and cleaner power and in many cases compliance with optimistic greenhouse gas (GHG) emission standards such as the Paris Climate Agreement (COP21).
By the end of 2016, ISO-New England forecasts a total of 1,774.7 MW of PV capacity, with approximately 70% coming from the Bay State. Moreover, a research study by the Solar Energy Industries Association (SEIA) suggests that Massachusetts currently ranks 6th in the nation for installed PV capacity, and program administrators (PAs) are looking to increase solar energy. For example, National Grid’s Solar Phase program focuses on the ownership and operation of solar projects in the utility’s service territory. A total of 21 MW will be installed after phases 1 and 2, with another 14 MW added as part of solar Phase 3 starting in 2017.
In the political landscape, Massachusetts Governor Charlie Baker signed the Solar Energy Act back in April 2016, allowing the state to comply with the goal of 1,600 MW solar PV capacity by 2020. In August 2016 Baker signed a comprehensive energy diversity legislation, which will increase the Renewable Portfolio Standard (RPS), increasing the state’s efforts toward GHG goals. The fact that bipartisan leadership agreed upon the issue underscores what a great achievement this was. In reality, though, these agreements will limit solar market share for years to come.
Considering the market penetration of renewables, it appears that solar has a long way to go toward making a meaningful impact. In 2015, 9.4% of the total electricity capacity in MA came from renewable sources, with two-thirds of that percentage supplied by hydropower and the other third divided among solar, wind, and biomass. The new RPS bill will mainly focus on the development of offshore wind with 1,600 MW capacity and increase of hydropower by 1,200 MW with purchase from Hydro-Quebec. To add insult, the Solar Energy Act will change the net-metering rate structure once it reaches the 2020 goals ‒ potentially creating a major roadblock for solar development, as companies rely on net-metering as one of their main incentives.
In a nutshell, net-metering programs allow customers to sell unused generated energy – in this case, solar energy – back to the grid. There have been ongoing debates whether customers should be paid the retail or wholesale (generation) rate for this unused electricity. The difference is immense because customers were used to receiving credits of $0.16 to 0.17/kWh, and they’ll now receive around $0.03 to 0.04/kWh, depending on the service territory.
But hope is not lost. There are several opportunities where developers and advocates can definitely capitalize. For example, the German government launched a residential PV storage incentive program to support demand back in 2013, subsidizing up to 660 euros/kW (≈$740/kW) of solar power and a maximum capacity of 30 kW. This program has been running for 3 years and it was recently renewed to continue until 2018. Additionally, the California Public Utilities Commission (CPUC) started to develop interconnection standards for distributed energy resources. An increase of renewable capacity in the grid can compromise the distribution system’s stability and reliability, given the generation intermittency of the technology. These requirements will enable a smooth connection between renewable generators and the grid’s distribution system and allow efficient load distribution management with smart inverters.
The ability to deliberately learn from these “best practices,” along with other methods not mentioned here, could expand to other business sectors and could kick-start new solar initiatives throughout the state of Massachusetts and the Northeast.