House Passes Compromise Solar Legislation

After languishing in conference committee for over five months, the lead House and Senate negotiators finally released compromise solar legislation. The House and Senate took the legislation up last week and the Governor signed it into law earlier this week. While the compromise legislation was an improvement over the House bill that I opposed in November (see Update on my Legislative Work in 2015 to learn more about that earlier vote), I felt compelled to vote against it for three main reasons:

  1. the legislation will unnecessarily slow the development of solar in MA, which will make it harder for us to meet our legally-required climate change targets
  2. the legislation isn’t based on good data — in reducing compensation for energy exported back to the grid by 40% for many solar projects, it fails to account for all the costs and benefits of solar for the grid and ratepayers
  3. the legislation is regressive — it discriminates against community-shared and low-income solar projects, which will hurt mainly middle-income and low-income people in MA who can’t put solar on their own roofs

For more on the legislation and my role in the debate on its passage, see the below State House News Service story:

By Matt Murphy

House lawmakers in a near unanimous vote approved a compromise bill on Wednesday to raise the cap on solar power in Massachusetts with diminished incentives despite opposition from the business community and pro-solar Democrats who critiqued the bill from opposing sides of the issue.

The House voted 152-1 in favor of the bill (H 4173) produced by a House-Senate conference committee that spent five months negotiating over the future of solar net metering, a program that allows solar customers to sell power back to the grid at retail rates.

The Senate will likely consider the legislation on Thursday.

Rep. Jonathan Hecht cast the lone vote in opposition, warning that the devaluing of incentives for solar development will slow the expansion of the energy resource in Massachusetts.

“The legislation will slow the development of solar in Massachusetts and I think that’s to the detriment of everyone,” said Hecht, a Watertown Democrat.

Several other House Democrats, including Rep. Frank Smizik, expressed similar concerns, but ultimately voted for the bill, which includes a cap lift that industry leaders said was essential to jump-starting stalled solar projects.

Before the debate, House Ways and Means Chairman Brian Dempsey pushed back against criticism from Associated Industries of Massachusetts, the state’s largest business trade group, which wrote a letter to lawmakers Wednesday urging them to reject the bill. The business group said the bill “lacks any real reform” and will add $8 billion in new energy costs for residential, commercial and industrial customers over the next 10 years.

Dempsey said AIM misread the political landscape after more than 100 lawmakers wrote to the conference committee last month urging them to resist any reduction in the value of credits offered to public and private customers who sell solar energy back to the grid.

The compromise bill would reduce the value of those credits by about 40 percent, cutting the reimbursement price to roughly 11 cents to 12 cents per kilowatt hour compared with the 17 cents to 21 cents currently paid.

“It appears to be an unrealistic expectation around what was doable in terms of a final bill,” Dempsey told the News Service, adding, “Clearly it demonstrates the need for better advocacy on the part of AIM to communicate their view and their position because a majority of the members felt that we wanted to continue with a solar program and we believe we struck the right balance.”

Dempsey also took umbrage with AIM’s John Regan accusing lawmakers of “taking care of their own” by exempting municipal solar projects from the lower net metering credits at the expense of private business.

The Haverhill Democrat said “clearly cities and towns did a very effective job of advocating to members of the House and Senate.”

“There has to be a dose of reality in terms of the landscape and the will of the Legislature and the administration to continue (the incentive program),” Dempsey said. “To expect that through this process that there wasn’t going to be a middle ground between viewpoints is really unrealistic.”

Rep. Thomas Golden, a Lowell Democrat who negotiated the final bill for the House alongside Dempsey and House Minority Leader Brad Jones, said it was an “extremely, extremely difficult” task trying to please all stakeholders.

“It was the goal of the conference committee to find a balanced solution between the rates that would keep our solar industry thriving and moving forward while still staying cognizant of our constituents, the ratepayers, who pay on a daily basis,” Golden said.

In a nod to the business community, Golden said House conferees also wanted to make sure Massachusetts remains “welcoming” to business.

With the caps on net metering reached in territories served by both National Grid and Eversource, solar advocates have been clamoring for action on the bill to unfreeze the market that had, to some degree, stalled in anticipation of a cap lift. Smizik said the months of inaction since the bill was sent to conference in November had driven jobs and development out of state.

The bill would lift the cap on private projects eligible for net metering credits from 4 percent to 7 percent of peak electrical usage, and from 5 percent to 8 percent on public projects.

“The bill approved today by the House will put thousands of solar workers back on the job and ensure families and communities reap the clear economic, tax and income benefits of solar. By no means a perfect bill, this legislation represents a short-term compromise to keep solar growing in Massachusetts,” said Sean Garren, Northeast regional manager for Vote Solar.

Hecht, in remarks on the House floor, challenged assertions made during the debate of the past several months that solar incentives were driving up costs on non-solar customers, citing studies done in states like Maine, Minnesota and New Mexico about ratepayer benefits to solar that offset much of the expense.

“I think we’re accepting as true these unproven assertions that have come basically from utility companies,” Hecht said.

Hecht and Smizik also expressed their wish that the compromise bill had preserved retail-rate credits for low-income developments, and Hecht said he would have preferred to see residential customers, which are exempt under the bill, have their credits reduced in exchange for higher incentives for low-income projects.

“Essentially, the conference report calls for paying wealthy and middle class solar homeowners a higher reimbursement rate than it pays low income solar customers for the very same amount of energy returned to the grid,” Boston Community Capital, a community development financial firm, said in a statement.

The bill would grandfather the value of net metering credits at retail rates for 25 years for existing projects, and would set parameters for the Department of Energy Resources to develop the next generation of solar renewable energy credits, a separate incentive program run through the state.

Golden noted that while the bill does authorize utilities to petition the state to charge solar-producing customers a minimum bill to cover power transmission and distribution costs the Department of Public Utilities already has the power to sanction a minimum bill. The legislation would allow DPU to exempt low-income families from minimum bills.

House Passes Compromise Solar Legislation