On September 23, 2016, the Massachusetts Department of Energy Resources (DOER) presented its straw proposal for the solar panel incentive program to succeed SREC II. With the new program, the DOER aims to continue sustainable development of solar resources in the Commonwealth at a low cost to ratepayers under Chapter 75 of the Acts of 2016 (signed into law by Governor Baker this past April).
The proposal is a tariff-based incentive program that will pay solar project owners for the net energy value of each kilowatt-hour (kWh) generated by the systems over 10 to 15-year terms. The incentive payment will be the total tariff rate minus the value of the energy produced by the project (i.e. the tariff payments will adjust to maintain a net compensation level that takes into account the value of energy that is sold, net metered, or perhaps even used onsite). Furthermore, the total tariff rate will be primarily based on a project’s size and may be increased according to a variety of factors, including where the project is located, whether it provides benefits to low-moderate income off-takers, and if it furthers other DOER policy objectives (e.g. energy storage). The tariff rates will gradually decline over time in a block grant schedule, similar to the successful New York Megawatt Block program.
The program has the potential to keep commercial solar projects in Massachusetts attractive while also making solar policy more consistent going into the future. The DOER will continue to work on finalizing the program details with stakeholders over the next couple of months, and the program is expected to be ready to replace the SREC II program by the summer of 2017.
PowerFlex will continue to monitor the program’s development and actively participate in the stakeholder process. Our team has vast experience working with incentive programs in Massachusetts and can help maximize their benefits to your bottom line.
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