Beaton hopes to “wean down” solar industry incentives
While the Baker administration maintains the state is poised to hit its solar energy production target even without a change in law, solar industry advocates said lawmakers must take action to keep projects moving.
Net-metering allows utility customers to receive the retail rate for solar power sold back to the grid. The net-metering cap for the National Grid service area was reached this year for public and commercial solar projects.
"Companies like mine will start looking at other states," Zaid Ashai, CEO of the solar firm Nexamp, told the Committee on Telecommunications, Utilities and Energy on Tuesday. Ashai told the News Service, "You have to grow. You have to grow jobs. And if there's really not growth it's hard to make the case for continuing investing in the Commonwealth."
Ashai, whose veteran-founded business has offices in downtown Boston and Haverhill, said he is looking at New York, Maryland, New Jersey, North Carolina and Rhode Island.
Residential solar projects are not limited and the net-metering cap has not been hit in other service areas.
Energy and Environmental Affairs Secretary Matthew Beaton said the state is on track to meet its goal of 1,600 megawatts of solar power two years early, in 2018, without a lift to the solar cap.
Beaton told lawmakers he opposes raising the cap without a "sustainable" framework that lowers costs for ratepayers and he said wants to "wean down incentives." Department of Energy Resources Commissioner Judith Judson said the administration wants to be sure "we're not over-incenting."
Sen. Benjamin Downing, a Pittsfield Democrat who is co-chairman of the committee, wondered if by not acting lawmakers would be "sending a signal to the market we're going to change the rules in the middle of the game."
Last summer lawmakers raised the net-metering cap. Utilities back a minimum charge on bills so that solar customers contribute toward the cost of maintaining the electrical grid.
In addition to net-metering, the state requires utilities to purchase a certain amount of solar credits, which solar producers can sell. Beaton said the total solar incentives will cost ratepayers $6.6 billion from 2010-2035, though that calculation does not include the benefits of solar.
Ashai said solar credits are cheaper for ratepayers when they are generated by larger-scale projects - which are generally the commercial and public projects now subject to the net-metering caps.
Following Beaton and Judson's testimony, a stream of lawmakers, municipal officials and solar industry representatives testified in favor of lifting the cap.
Rep. Tom Calter, a conservative Kingston Democrat, said he is "somewhat disappointed" in the administration's position and said solar "powers our economy."
Rep. Denise Provost, a Somerville Democrat, said bumping up against the net-metering cap has been "chilling" and sends a "terrible message" to the market.
Amesbury Mayor Ken Gray, a Republican, said a project to generate 9 megawatts of solar energy on an old landfill in his city is now in "jeopardy" because of the cap.
"The intended benefits must be predictable," Gray said.
The Associated Industries of Massachusetts, which is concerned about the state's relatively high cost of electricity, warned that those without solar panels subsidize those who do generate solar.
"While it is understandable that developers and even some participants want to keep the status quo, virtually all the savings (except for wholesale fuel costs) attributable to solar installations are basically a transfer from non-participating ratepayers to those who have solar, increasing costs for those who may not be able to take advantage of solar programs," AIM lobbyist Robert Rio said in written testimony. "While the easy answer is to encourage more solar, in fact, the viability of the program depends on this inequity. If everyone took advantage of solar programs, there would be no ratepayers left to pay the cross-subsidy."
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