This morning, the House of Representatives gave initial approval to An Act Relative to Competitively Priced Electricity, a bill that aims to increase the amount of electricity that is produced through renewable means in Massachusetts.
One of the ways in which this piece of legislation would accomplish this goal is by encouraging more homeowners and businesses in the Commonwealth to generate their own electricity through solar, wind, or other renewable means. In order to create a greater incentive for home and business owners to start producing their own green electricity, this bill will raise the cap on the number of “net-metering” facilities that can be connected to the grid.
Net-metering is a system in which the owners of solar panels, wind turbines, or other intermittent generation facilities are connected to the grid and provide power to the grid when they use less electricity than they generate. With wind and solar, there are times when the customer will also draw from the grid to power their home or business. At the end of the month, the electricity produced and the electricity consumed are totaled and the net-consumption is what is billed by the utility. In cases where production exceeds consumption, the customer is considered a “net-exporter” of electricity and will be billed for 0 kW hours of electricity and receive a credit to their account.
Once the statewide cap on net-metering facilities is reached, net-metering credits will no longer be available and customers with their own electric production facilities will be required to pay for all of the energy that they use in the course of a month, regardless of how much they are able to put back into the grid. Once the cap is reached, the incentive for those considering purchasing renewable generators is severely diminished. Without net-metering, it will take someone who buys solar panels or a wind turbine for their home or business much longer to see a return on their investment.
And now, Massachusetts is dangerously close to the cap on net-metering. The cap is set for private customers at 1% of the electric grid’s historical peak output. That translates to about 51.3 megawatts. According to National Grid, the total capacity of all private net-metering facilities in Massachusetts is at 43.6 MW as of June 12.
While there is a cushion of more than seven megawatts of capacity before the cap is reached, the total capacity of all of the systems that are in the application process for connection to the grid under this cap is more than 300 MW. Competition for the last space under the cap makes renewable energy a risky investment for homeowners and businesses at a time when we should be encouraging it the most.
The bill that was released by the House Ways and Means Committee this morning takes a proactive step to correct this problem. It completely removes the net-metering cap on private customers that use their generators to offset the amount of load their property adds to the grid. This means that if a business or homeowner is considering adding solar or wind power equipment to their property, their risk is lowered and their opportunity for a return on their investment is substantially increased. This preserves net-metering as the financial incentive that it is meant to be.
This bill will also increase caps on net-metering for publicly-owned generation facilities and facilities that do not offset on-site load (solar and wind farms). The primary goal of these changes is to maximize the use of clean methods of producing electricity and minimize the use of oil and natural gas. The secondary goal is to create a sustainable industry that provides good jobs to workers in Massachusetts. Our state is uniquely positioned to become a global player in the fields of solar and wind power, and net-metering not only supports that industry financially, but generates interest and support for it among the general public.
I will be casting my vote in favor of this bill when it is considered by the full House of Representatives later this week. The impact of climate change will be one of the biggest challenges that we will face as Americans in this century. Updating our net-metering laws might be a small step forward for renewable energy, but it is a step in the right direction.