The Department of Energy Resources has released a draft of proposed changes to the regulations governing the state’s “solar carve-out” program, which in its first phase helped to establish Massachusetts as a national leader in solar development.

The next phase of proposed incentives for solar photovoltaic development, called the Renewable Portfolio Standard Solar Carve-Out II, creates four tiers of credits for different types of solar installations.

The first tier, with the highest credits, includes small-scale solar installations with capacities under 25kW, which could include residential, parking canopy, emergency power generation, and community shared solar.

The second tier of credits will be available for larger installations that are either roof-mounted or ground-mounted and use at least 67 percent of the energy produced on site.

The third tier of credits will be available to solar installations on landfills or brownfields, or to units with a capacity of less than 500kW where less than 67 percent of the energy would be used on site.

The fourth and lowest-value tier will apply to all solar installations that do not fit into any of the first three tiers.

The Department of Energy Resources may re-evaluate the credits in 2016 or 2017 to accommodate market or policy changes. Solar installations that come online under the Solar Carve-Out II policy will be eligible to receive credits, referred to as Solar Renewable Energy Credits (SREC), for energy production for 10 years.

Most non-residential solar installations rely on both SREC and “net metering” credits to attain financial viability. The success of the solar market in Massachusetts has led to a rapidly diminishing chance for projects, particularly those on municipal land, to qualify for a finite amount of net metering credits. The Department of Energy Resources commissioned a study in late 2013 to assist in decision making around future net metering policy. The department has stated that the policy will remain in place until the goal of 1600MW statewide is reached.

Under the state’s Renewable Portfolio Standard, utilities are required to purchase a portion of the energy that they provide to consumers from renewable sources or pay fees into the state’s Alternative Compliance Program. Approximately $30 million in funds from the ACP will be used to support a new program of loans to facilitate the financing of direct ownership of residential solar units. According to the Department of Energy Resources website, details of the program will be announced in the coming months.

Last May, four years ahead of schedule, the state met its initial goal of 250 megawatts of solar capacity. By the end of 2013, the state had 361 megawatts of solar capacity.

The new target for 2020 is 1600 megawatts, a goal that would require 140-200MW of solar development per year to meet.

Municipalities have been leaders in the state’s solar progress. More than 120 cities and towns host solar installations on municipal land, and almost every municipality is home to at least one solar installation.

The draft “solar carve-out” regulations will be subject to a hearing in late January and will be sent to the Legislature’s Joint Committee on Telecommunications, Utilities and Energy for comment. Final regulations are expected in early spring.
 

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