Rodman & Rodman, P.C., an independent accounting and tax firm with a Renewable Energy and Cleantech specialty practice serving “green” clients throughout the U.S., weighs in on proposed legislation regarding Net Metering and Solar Power awaiting passage in the MA House and Senate by July 31st.
“Due largely to the state’s policies providing net metering (credits for returning excess generation to the grid) and Solar Renewable Energy Credits, renewable energy projects — solar projects in particular — have enjoyed exceptional growth in Massachusetts,” said Steve Rodman, president of Rodman & Rodman, P.C. “These programs, along with federal incentives in the form of 1603 grants and Investment Tax Credits have allowed solar projects to confidently project a reasonable return on investment, which in turn has attracted investment and financing. However, solar capacity qualifying for net metering facilities benefiting cities, towns and other public entities has quickly approached the 3 percent cap allocated to each of the state’s electric utility service areas, and the lingering debate about when and how much to raise the caps has become a serious threat to financing future projects.”
Under the current net metering regulations, qualified solar energy generation sites can use excess capacity to create credits against both the cost of electricity and service. “While solar advocates want to significantly increase net metering caps to encourage financing and development, utilities and some industry advocates argue that a large increase in qualified net metering solar shifts the cost of grid infrastructure and other utility expenses away from the direct beneficiaries of solar projects to the rest of utility rate payers,” explained Rodman. “There are strong feelings from some Massachusetts industry advocate groups that also take this position.”
A viable compromise may come in the form of a new Massachusetts bill (H4185), currently awaiting passage in the MA House and Senate. Under the new legislation, net metering caps for solar projects in the Commonwealth would be permanently removed in exchange for a minimum monthly bill, the elimination of Solar Renewable Energy Credits, and the ability for utilities to adjust rates for power received from Virtual Net Metering sources (solar power deployments that share net metering credits with other consumers such as a landlord who owns a solar array and shares the benefits with tenants). In addition, the bill would provide for a “Declining Block Program” of incentive rates that would assign new generation coming online to a specific block value of dollars per kWh over a 15-year period that would decline as new capacity comes online. The block value rates bundle both electricity metering credits and incentive rates for renewable energy.
Some industry groups, such as the Associated Industries of Massachusetts still strongly oppose the legislation as an unfair redistribution of ratepayer tariffs. Even some Massachusetts solar groups are in opposition because they feel that the new legislation replaces a more free-market system that was working well with one that is untested and much more in the control of utilities and regulators. At the same time, The Solar Energy Industry Association and the New England Clean Energy Council strongly support the bill as a reasonable compromise to break the current stalemate on net metering caps, create long-term certainty to reduce risks and encourage continued investment in solar, and meet the commonwealth’s goal of 1,600 MW of solar energy by 2020.
“We support the new legislation and believe strong growth of solar energy in the commonwealth will pay big dividends to all rate payers in the long term while allowing utilities a reasonable path to recover some of the cost of our growing grid infrastructure and service requirements. We also feel that while distributed solar generation may add some expense in the short term, it will add clean generation capacity, reduce transmission congestion, reduce demand for added fossil fuel generation, reduce the need for added pipe and wire infrastructure, ultimately increasing the overall performance of the grid. We also think that thousands of jobs, a growing tax base, and cleaner air are not bad benefits either,” said Rodman.
About Rodman & Rodman P.C.
Founded in 1961 and listed in the Boston Business Journal’s “Top 50 Firms,” Rodman & Rodman, P.C. provides accounting, tax and business services to small and medium-sized companies. For three consecutive years, Rodman & Rodman has been named one of the “Best Accounting Firms to Work For” in Accounting Today. The Rodman & Rodman “Green Team” is a specialized green energy and clean technology accounting and tax services practice within Rodman & Rodman, P.C. that serves “green” clients throughout the U.S. The company is Green Business Certified. For more information, email firstname.lastname@example.org, visit their website at www.rodmancpa.com or contact (617) 965-5959.