What to do about Massachusetts’ Sputtering Solar Market?

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With solar installations down dramatically in Massachusetts, a national advocacy group is calling for the state to triple its solar energy target to 4,800 MW. In a new report, Vote Solar says that the policy change is crucial if the state expects to meet its clean energy goals and generate solar jobs.

The new target would apply to Solar Massachusetts Renewable Target (SMART), a program launched last year to incentivize 1,600 MW of solar — 3,200 MW shy of what Vote Solar says is needed.

Vote Solar called for the new target following a 50% reduction in new solar installations, primarily in Massachusetts’ residential sector.

solar energy target

By foxbat/Shutterstock.com

The advocacy organization calculates that its more aggressive solar energy target would put the state on track to achieve its 35% renewable energy requirement by 2030, create between 8,000 and 9,000 jobs and drive more than $5 billion in investments to the state.

“Without an increase of at least 3,200 MW to the SMART program, the Commonwealth risks falling short of its own renewable energy and decarbonization requirements, incrementalism
that our communities and climate cannot afford,” said Sean Garren, Northeast senior director for Vote Solar.

The organization says that many solar projects are now languishing on waiting lists amid the uncertainty caused by the recent changes in state energy policy. The state’s solar workforce fell by about 30%, or 4,372 jobs between 2015 and 2018.

Impact on microgrids, storage

Garren sees the slowdown also influencing the development of energy storage and microgrids in the state. Solar and storage are often incorporated in new microgrids.

“We know nationwide that solar plus storage is a match made in heaven,” he said. “Massachusetts has done a lot recently to encourage storage. My sense has been that the market is growing but not growing as fast or as extensively across the state because solar has been slowed down.”

In addition to tripling the goals in the state’s solar program, Vote Solar calls for policymakers to integrate energy storage and distributed energy resources into the state’s SMART program and utility grid planning. That would maximize the carbon reduction benefits of solar and would give solar workers confidence in a few years of consistent policy, the organization said.

Newest solar energy target still falls short

Although there is some political appetite at the state level to expand the state’s solar energy targets, it is not as much as Vote Solar seeks. On Thursday, the state announced a straw proposal that adds 800 MW to the SMART program and encourages more commercial and industrial projects and behind-the-meter storage.

The latest proposal would expand the program by 50%. That’s a smaller increase than Vote Solar’s proposal to expand capacity by 200%. “There is a large gap between those two,” he said.

Because solar is “overwhelmingly popular in the state and the state itself has some ambitious climate goals, Garren is “somewhat hopeful” that the state may still expand solar by more than the current proposal of 800 MW.

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From strong start to sputter

Massachusetts had a strong start with solar, but risks losing its position as a national leader. The state has typically ranked in the top 10 states over the last decade for installed solar projects. To date, it has more than 2,400 MW of solar capacity, about 10% of the state’s consumption.

In 2002, Massachusetts became one of the first state’s in the nation to establish a renewable portfolio standard (RPS), which requires that a certain percentage of a state’s electricity come from renewables. The standard is integral to Massachusetts’ mandated reduction of greenhouse gas emissions outlined in the Global Warming Solutions Act of 2008.

In 2008, solar received a boost with passage of the Green Communities Act, which also created solar renewable energy certificates (SREC) to provide a market value for the environmental benefits of solar power production. These certificates worked in combination with the compensation for energy and electric grid benefits provided by solar.

The first solar program SREC I, began in January 2010 and was closed to new solar projects in April 2014. The second solar program, SREC II, was finalized in 2014 and designed to trim costs
and send a more predictable price signal to the solar industry and investors.

The state passed additional legislation in April 2016 which directed the DOER to develop a successor to SREC II, a new program which would create a long-term sustainable incentive program that promotes solar in the state. The legislation also increased caps on the net metering policy which had stalled projects and hindered the ability to create new jobs and generate additional carbon-free energy.

industrial microgrid

By Federico Rostagno/Shutterstock.com

Why the slowdown occurred

With that, the DOER established the SMART program to encourage the development of an additional 1,600 MW of new solar-generating capacity. The program launched in November 2018. By then, the caps on net metering were reached in several utility service areas, effectively stalling hundreds of clean energy projects and the jobs they would have generated, Vote Solar said.

The program began soliciting applications for photovoltaic projects up to 5 MW in size. The DOER received more than 2,500 applications in the first week. Within two weeks, it had received applications for more than 600 MW of installations, nearly 40% of the total capacity of the program.

But the launch of the SMART program took place amid other challenges for the solar industry. The new obstacles included uncertainty over new state regulations, a rate case decision which affected utility Eversource, caps on net metering and the federal government’s tariffs on solar equipment. As a result of the uncertainty, projects ranging in size from 25 KW to 5 MW in two service areas were placed on a waiting list.

The DOER initially projected the SMART program was on track to reach 1,600 MW by 2022 and it is already closing in on that target. Most of these projects will take a couple of years to be operational and no new projects are currently planned.

Vote Solar called for the new target following a 50% reduction in new solar installations, primarily in Massachusetts’ residential sector.

Falling behind other bellwether solar states

Meanwhile, the state’s RPS, once seen as cutting edge, now pales compared with more aggressive standards set by other states.

Starting in 2020, the Massachusetts RPS will require an increase of 2% annually for 10 years in the percentage of its electricity that comes from renewables. The yearly increase will fall to 1% in 2030 unless the legislature amends the law. By 2030, the RPS in Massachusetts will be about 35%.

New York and California, by comparison, require 100% clean energy by 2040 and 2045 respectively. New Jersey and Maryland have renewable targets of 50% by 2030.

Although Massachusetts’ current target lags those states, its solar program is not capable of delivering even those modest goals in Vote Solar ‘s estimation. The organization believes that the state needs between 2,900 and 3,600 MW of additional solar capacity to fulfill its current clean energy requirements. This assumes modest electric load growth.

Time to recalibrate?

Vote Solar argues that the SMART program reached commitments for 600 MW within the first two weeks demonstrates the need to “recalibrate” the state’s new solar integration and development policies.

In addition to the limited capacity, the SMART program has not delivered the diversity of projects it had promised. Currently it has not driven solar developments in low-income areas. The net metering caps have meant that businesses and municipalities are not able to choose to put solar on their property to meet energy needs. As a result, the projects are largely being sited in open fields rather than on rooftops, carports or landfills.

Solar Development in Massachusetts by Market SegmentMassaachusetts

 

New York’s longer term view

Vote Solar suggests in its report that Massachusetts may want to take a longer term view. The organization points out that the state of New York recently passed a climate and clean energy law that requires the state to develop enough solar to power one million homes by 2025, achieve 70% renewable energy by 2030 and reach 100% emissions-free electricity by 2040.

The organization said New York’s law creates a solid and long-term path to combating climate change and setting up a strong market for clean energy in New York. That law would create
more than 11,000 jobs, drive $10 billion in local economic benefits and several millions of dollars on electric bills in the solar industry during the next five years.

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