From a policy perspective, it has been a busy start to 2018 for the solar industry. Since the beginning of January, there has been significant policy activity at both the state and federal levels. From the Eversource Rate Case and SMART program implementation in Massachusetts to Duke Energy’s rebate program in North Carolina and the Trump Administration’s decision to impose a tariff on imported solar cells and modules; it’s an exciting time in solar. In short, this month we’ve experienced progress and challenge. Fortunately, BlueWave and our allies in the larger clean energy industry will continue our efforts to strengthen the solar market among the states and at the federal level and keep you informed along the way.
Let’s get to it…
DPU Approves Eversource’s Proposed MMRC – Imposing a First in the Nation Demand Charge
On January 5, 2018, the Massachusetts Department of Public Utilities (DPU) issued its second order in the Eversource Rate Case. This order dealt with Eversource’s proposed rate consolidation proposal and their proposed Minimum Monthly Reliability Contribution charge (MMRC) which imposes a rate on new residential and small C&I net metered solar customers as of December 31, 2018.
The DPU approved Eversource’s proposed MMRC with very minor changes, making Massachusetts the only state with a mandatory 24/7 demand charge imposed on new residential solar net metering customers in the United States – not a distinction for Massachusetts to be proud of. Multiple state public utility commissions across America have rejected such a demand charge.
There are three parts to the MMRC: (1) an increase in the existing customer charge, (2) the new mandatory non-coincident peak demand charge based on the highest hour of electricity use by a customer each month and (3) a reduced volumetric energy charge.
Among the concerns raised about the MMRC by the solar industry and clean energy associations were:
- Inconsistency with the enabling statute, the Solar Energy Act of 2016
- Eversource’s use of non-coincident peak demand (an individual’s peak demand use) vs. coincident system peak demand (peak demand for the entire system)
- Lack of tools provided by Eversource that enable residential customers to measure/monitor their peak demand use enabling them to make adjustments to reduce the impact of the new demand charge
- Confusion that this new, complicated charge will cause among new residential solar customers and the solar industry.
- The increased costs the MMRC will have on the new solar PV systems over the life of the system.
Eversource’s assumptions and estimated MMRC cost impact on an average residential customer was challenged by representatives of the solar industry at a recent joint state Senate/House Telecommunications, Utilities and Energy Committee (TUE) hearing, who argued the cost to new residential solar customers will likely be higher based on actual customer peak electricity use. As President of the Solar Energy Business Association of New England (SEBANE) and on behalf of BlueWave Solar, I testified before the TUE Committee explaining to the Committee that the MMRC was confusing at best and at its worst – financially punishes people who invest their hard-earned money in reducing our reliability on fossil fuels.
Moving forward, the solar industry and our clean energy partners intend to fight this decision on multiple fronts. Our colleagues at Vote Solar have appealed the DPU’s MMRC decision to the Massachusetts Supreme Judicial Court. In addition, BlueWave, SEBANE, the Northeast Clean Energy Council and other solar industry and clean energy associations are working together to pursue a legislative solution. Stay tuned for information on ways you can help us resolve this unfortunate decision.
Solar Massachusetts Renewable Target (SMART) Implementation
On January 11, 2018, the Department of Energy Resources (DOER) announced the results of the SMART competitive procurement, setting the base incentive rates for the Commonwealth’s new solar incentive program. These results represent a step closer to implementation of the SMART program. The following links provide information on the base rates that were set for each utility territory and also provides information regarding the remaining MWs in Block 1 of the SMART program.
CLEAResult was selected as the program administrator for the SMART program. They will be responsible for managing the statement of qualifications application process. It is anticipated that the application process for the remaining Block 1 MW capacity will begin in late April or early May.
DOER has also released draft SMART program guidelines for public comment. These guidelines cover various program topics including: Agricultural Solar Tariff Generation Units, Brownfields, Land Use and Siting and the Energy Storage Adder among others. The public is encouraged to submit comments on these guidelines by February 23, 2018. BlueWave will be submitting comments on several of these proposed guidelines including Land Use and Sitting, Agricultural Solar Tariff Generation Units as well as providing guidance on Community Solar. Find more information about the draft guidelines here.
The last step in the implementation process is the conclusion of the DPU SMART Tariff proceeding which is presently ongoing. The utilities filed a joint tariff with the DPU on September 12, 2017 that will, among other things address utility cost recovery for the program, rights to project capacity, removal from the program and the establishment of an alternative on bill crediting mechanism as substitute to net metering. BlueWave, through SEBANE, has joined a coalition of solar and clean energy industry partners headed by SEIA to intervene in this proceeding in order to ensure that the solar industry’s concerns are addressed. It is anticipated that the DPU will issue its order regarding this tariff in May or June of 2018. Once the order is issued, the SMART program will begin.
Tar Heel State Solar Market Heats Up
There was exciting solar news in North Carolina recently – Duke Energy announced a $62 million rebate program that will put North Carolina on the map as the cheapest place in the United States to go solar.
The residential solar market in NC has largely been in “wait and see” mode for the past 5–6 months as installers and customers alike have waited for details on the much-awaited Duke rebate to emerge. The plan released January 22nd features 20 MW per year over 5 years, with a $.60 per watt rebate. The rebate is capped at system sizes of 10kW, or $6,000.
This more modest rebate, combined with the cap, should create a sustainable incentive that will drive solar adoption across most of NC for the next several years. How’s that for a sunny outlook? We’re proud to have a dedicated team in the Carolinas helping residents go solar in the easiest way possible.
Trump Trumps Solar – Imposes Tariffs on Imported Solar Cells and Modules
Last week the Trump Administration announced its decision on the much anticipated Suniva solar trade case. From an industry perspective, the president’s decision was both predictable and disheartening. Two foreign-owned solar companies have caused a 30% tariff to be placed on solar cells and modules imported from China, Canada, Mexico and other countries that supply materials to American companies, the very market the president has said he wants to protect.
There has been a lot of discussion about the impacts of these tariffs—a great podcast from the folks at Green Tech Media explains a lot of the details, it’s a good listen. The bottom line for BlueWave and the rest of the industry is that Americans overwhelmingly support solar and it is hard to ignore the economic engine of solar. There are 260,000 solar jobs in the United States, that’s more than the fossil fuel industries combined. Just this past week the CEO of NextEra Energy, Jim Robo, was telling investors that he thought that by 2020 it would be cheaper to build renewable power plants than traditional coal and gas plants. NextEra owns some of the largest “traditional” power utilities in the country. Renewable energy is the future and it’s happening right now. This tariff won’t stop the energy transformation.
In terms of next steps, this tariff will go into effect on February 7, 2018. By Presidential Proclamation, the US Trade Representative will also establish procedures to consider exclusions of particular products from the tariff. As it relates to challenging the tariff, the solar industry is exploring its options. This tariff may also lead to affected countries filing complaints with the World Trade Organization, which could lead to retaliatory actions against the United States.
Although there is cause for concern, we will push through the tariffs and continue to grow the renewable energy sector. The solar industry is a perfect vehicle for job creation, energy independence and a cleaner environment.
Thanks and tune in next month for more BlueWave Policy Connection. We’ll see where the solar policy roller coaster takes us.
If you have any questions let us know! E-mail us at ExternalAffairs (at) bluewavesolar.com