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June 2, 2015 | How Net-Metering Built a Successful Massachusetts Market
Over the past seven years, Massachusetts’ solar market has seen extraordinary growth. The installed capacity in 2007 was a mere 3.5 MW, when then-Gov. Deval Patrick announced an aggressive, ambitious goal of installing 250 MW of solar by 2017.
Patrick created the Commonwealth Solar Rebate Program in January 2008, and the results are startling. In 2013 alone, the state installed 237 MW, eclipsing Patrick’s goal four years ahead of schedule.
Currently, the installed solar capacity stands at 674 MW, with a new goal of 1.6 GW set for 2020. Massachusetts currently ranks as the state with the fifth highest level of solar penetration in the United States, ranking only behind California, Arizona, New Jersey, and North Carolina.
Much of the success in building the market is attributable to the state’s aggressive net-metering (NEM) policy. NEM is a billing mechanism that credits solar-energy-system owners for the electricity they send onto the grid, helping consumers lower their electricity bills. (Massachusetts currently has 7th highest in the nation at 13.79 cents/kwh.)
But there are potential hiccups that could temporarily slow down the growth of this rapidly expanding industry, which currently employs 6,400 residents at 283 companies. National Grid and other state utilities are trying to squash net-metering entirely.
State legislators wanted to extend NEM for multiple years to provide stability to the market, and in early 2014 a deal was in place to do just that. Instead, the program was postponed when small, local solar installation companies decided the bill didn’t adequately represent them — effectively killing the bill. As a result, NEM saw a one-year extension through 2014 and will be considered for another extension this year — a potentially destabilizing situation for the industry as it heads into another year where exponential growth is possible.
Recently, a new type of net-metering policy has entered the market. Called virtual net-metering (VNM), this new model allows a solar array to be located on a separate electric meter from the offtaker (or benefactor) of the solar electricity. VNM has opened up new opportunities including Community Solar, which has the potential to access the large 75% piece of the market without realistic access to solar on their own properties. This community-based solar model is taking hold in other parts of the country (Colorado was one of the first states to do it successfully), and VNM makes it possible.
Massachusetts is a progressive state, and the legislature is behind the solar industry 100%. We believe NEM will be preserved in 2015 and beyond, and we believe there is great potential for VNM to expand the solar market in Massachusetts for years to come.