E026: Future of Net Metering In Massachusetts with Senator Boncore, sponsor of the NEM Cap Bill

In this episode of energywakeup Yann is joined by Senator Boncore, the Massachusetts State Senator representing a large part of Boston and Cambridge. He is the sponsor of the net metering cap increase bill that would raise the cap by 5% across the board, clearing a large amount of backlog for SREC II projects.

Senator Boncore provides valuable insights on where the policy is going and how it may or may not progress. This interview was recorded at SolarWakeup Live Boston, which means that your competition that attended the event already has this valuable information.

Make sure to catch previous episode on your favorite podcast platform, episodes with

Mike Judge from Mass DOER

Jon Wellinghoff on the DOE NOPR

Sunpower’s Tom Werner are now available

Make sure to check out SolarWakeup Live! in D.C. on 12/6 and NYC late January.

If you enjoyed this episode as much as I did, make sure to subscribe on your favorite podcast platform including iTunes, SoundCloud and Stitcher radio. Please subscribe and share with your friends how much EnergyWakeup is helping you.

YANN: So our first speaker Senator Joseph Boncore. This is his district, we are in his market. He represents Cambridge Winthrop. [inaudible 00:00:08] you are– either you are his customer or he is your customer, depending on if it’s election season or not Winthrop Revere and Boston senator Boncore has served on the Winthrop Housing Board, and was elected to the state Senate about 18 months ago in a special election. Most importantly, and the reason we have him here today is he’s the sponsor of Senate bill 1824, which raises the net metering cap by 5%. This is a vital aspect of the solar market and clearly something that we want to hear about the bill has not been signed by the governor yet and it hasn’t passed. But that is what we want to find out about. Welcome to solar wake up live senator.

SENATOR: Thank you, thank you for having me.

YANN: So, you have in front of you a nice crowd of what represents the Massachusetts solar market. And most importantly, these are the people that are running businesses. They would probably have a couple thousand jobs represented here of solar companies. You’re not on the Energy Committee, but yet you sponsored Senate, Senate bill 1824. Tell us the story of how that happened.

SENATOR: So, I am not in the energy committee I don’t have much of background in solar obviously you know as millennial, which I am, I can put myself in that category. It’s something I see some fellow Millennial’s here in the front row. It’s something that Millennial’s are definitely concerned about. I represent a district that encompasses, you know, it’s a very coastal district, so people in my district are very concerned with climate change things of that nature. But I also represent a very innovative district, where in my district, I represent all of Vinnie Street, I represent all of the financial district in downtown Boston, also part of my district.

So, these are two places where solar has kind of you know taking a lead. It’s obviously important to the district, not just I don’t have a lot of manufacturing, and I think you know, when we talk about solar, and on the legislative level, you know, we like to talk about manufacturing. But there’s so much more around innovation I think, and around obviously capital and financial, financial companies that are investing in solar. So as I would say, though I wasn’t a you know, you know, proponent so I believed in solar you know, my district, my life experience as a public defender, you know led me to a criminal justice background and to work on bills like that.

You know, my housing background led me to be, I’m now chair of the housing the Senate’s Housing Committee. But just looking at my district, the people I represent, the companies I represent, you know, and knowing the 2020 goals that we’re trying to get to here in Massachusetts, and how woefully inadequate we are in getting there or, where our track has been, I thought that solar was a was a good position for me to take and obviously, raising the net metering cap by 5% for public and private industry, is it’s going to help and get us to 2020 goals.

YANN: So, tell us where the bill stands now, where it goes from here and sort of some of the barriers that you’re encountering in the legislative process.

SENATOR: So, you know, I would say the bill as it currently stands I filed it in January, at the beginning of the session, we should all understand there’s over 2000 bills filed in the legislature. So that bill was reported to the Telecom utilities and Energy Committee short for TUE, if I reference that, that’s what it means, that’s shared by Senate Barrett on this, and the Senate side, and representative golden on the house side. So we were able to get the bill heard. So the bill was heard last month. So we’re rating the legislative process is that, after a bills reported out it will be– after it’s heard it’ll be reported out favorably or unfavorably, favorably by the committee, either way whatever wage reported out it will come back to the Senate.

I would say in Massachusetts the Senate has been the body of innovation technology and especially around solar, they’ve been the driving force in the legislature and some of these issues. So, I think we’re in a good spot where the bill will be ported hopefully you report it out and shorter order it’ll get over to the Senate, and after it’s to the Senate, we’ll put it to a vote, for all the Senators to vote on. Thereafter, it’ll go to the house. The biggest impediment that I see right now in the legislative process is that last year Massachusetts took up a pretty common–

Well, it started out as a very comprehensive, what we would call a legislative omnibus of energy policy. It got watered down, probably to a minibus by the time we took it up. But I would say that there was some net metering, some net metering legislation within that package. And where had Massachusetts, had typically relied 1% increases, and that metering, for the past somewhat years. Since net metering has become a common topic, this bill actually increased net metering by 3%. So, I would say the majors impact– the major impediment is to that legislators who are dealing with you know, two thousand other bills may not see the priority that we all see in this room.

Legislators from across the state who don’t represent innovative districts like I do or financial districts like I do, don’t see the problem or the necessity to raise a net metering cap. So you know, I think that’s on me in the legislature to bring that up. But it’s on everyone in this room to make sure that legislators across the Commonwealth are understanding that, when we raised it to 3% that just dealt with a lot of the backlog, the backlog projects that we have in Massachusetts, I mean in Massachusetts is more than 120 projects across the Commonwealth that in backlog. So if we raise enough metering cap again by 1%, we’re going to deal with the backlog. But we’re not moving the Commonwealth forward, so you know, we need to raise it to 5% to deal with some of that backlog and move on because when we have backlog, that means jobs for the Commonwealth.

That means, people aren’t working, Massachusetts employs over 15,000 people in your industry, this is something I don’t need to tell you, I know. But you know when people aren’t working when capital’s tied up, you know, you know that’s a real problem. Currently, with the 120 jobs, there’s somewhere in the neighborhood of 72 million dollars tied up in capital investments that can’t come to fruition because of the net metering cap. Where it’s that, I mean, in overall the net metering capital, it makes about 6% of the state’s energy portfolio. So I think it’s you know, it’s time to bring the conversation to the next level.

YANN: So, given the fact that the solar market, in Massachusetts has 15,000 workers and real jobs right, I mean, solar now represents probably a job in every representative district and state Senate District, why do you think there’s still a lack of perceived power, political influence and political power in the solar industry when it comes to working the state legislative process?

SENATOR: I mean, again I mean you’re dealing with industry, other industries that have just been in the state legislature for so much longer. You know, and it’s a bandwidth issue. I mean, like I said, we deal with a lot of bills in the state legislature and you know, you guys your industry is relatively new to the Commonwealth and it’s you know, being there it’s being in front of us it’s activating a base. It’s letting not just the lobbyists and the activists know at the top levels, but letting the constituents know and getting the message all the way down.

So, legislators are dealing with this situation and talking about solar you know, there’s a perception you know, that Solar is intended for you know, a dentist who works in– who lives in a very high flew affluent community, and you know some people, most people I would say, you know who aren’t in the industry don’t realize that it can affect everybody. It affects you know, it’s not just a solar bill, but it’s a jobs bill. It’s an economic stimulus for the entire Commonwealth and it’s a–you know, there’s middle-income earners in solar as high-income earners and solar and it affects everybody, you know. When me and my staff are drafting this bill, I almost wanted to call it and that metering bill for the purpose of creating jobs. Because when you talk about creating jobs, I think it resonates with more legislators across the Commonwealth.

YANN: Is there you know kind of going on that topic? Is there a political risk for anyone that votes against your bill?

SENATOR: I would say so. I mean, I would say you know, I would say this is a political risk with certain demographics. When they don’t invest– when they don’t vote for the bill, I think with the rhetoric going on at the national level as to you know, what climate change is, what renewable energy is, I mean it’s on us at the local level to take up this mantle and I think in you know in California which probably leads the nation in solar development and investment and in Massachusetts which is second, I mean on those two coasts, I think any legislature not paying at any mind or being a void of what the real realities of not moving towards a renewable energy portfolio or strengthening that and having government influence, and making sure that that’s growing. I think that that any legislator who doesn’t– who would vote against raising it a mere 5% is taking a huge political risk.

YANN: So, you know the other side of the table you mentioned, the jobs and the job creation that this generates is that the people that are using solar energy in almost every project that I’ve been involved in and most of the room the consumer is also saving money. You served on a Housing Authority board and housing authorities have become one of the largest counter parties to solar projects. There’s still a perception that as you mentioned that this only helps the affluent dentist. From a– for those and I know there are some bills to also work on this issue, you know, what does it represent to middle and low income energy consumers when it comes to having access to more solar energy?

SENATOR: I mean I think you know they’re realizing it, I mean what are you talking about middle income earners, even low income earners, these are people who are not planning financially you know, and a lot of instances for the future. So, they don’t see an investment today oftentimes paying dividends tomorrow. And when you talk about housing authorities you know, in some housing authorities these people on subsidized housing who aren’t paying the energy bill, the housing authority in fact pays the energy bill.

And that’s why the public sector cap, is about 1% higher because the state sees it, but to get it to the end user is a different discussion. And I think when we start to talk about community solar and on the municipal level, you know changing ordinances and having a say at the municipal level in opening up solar farms, which would be very difficult in my district it’s obviously densely populated, but having some form of community solar, letting the end-user see in their energy bill what the real results are. You know I think we’re getting there, I think by the good work everyone here is doing and having a conversation like this, you know we’re getting it to where it should be going.

YANN: So, you know your bill covers net metering, but we have a parallel track going on in Massachusetts right now is smart. The DOER has finalized its rules and now it’s at the D P U. The, there is a combination of the two being that the parties that are trying to influence, maybe water down some of this policy is on both your bill as well as the D P U process currently. How powerful is the anti solar or the, I want to slow solar down legislative force in Massachusetts?

SENATOR: I mean, I think it’s you know when we’re talking about growth of an industry, obviously were taking away from another industry and an effect and I think that was the idea of you know meter capping, what we’re doing in that metering and also what smart growth. You know we’re trying– well smart growth is a little different. I don’t see smart growth directly related, I do see smart growth as a plan by the governor and the administration to ensure that incentives, you know weren’t so out of whack that the end user is the rate payer you know it wasn’t worthwhile anymore.

So kudos, to the governor and his administration for taking on this issue and I’m beginning to understand this issue. And that’s what– they’re going to do, what they’re going to do. They’re going to set up the regular– they set up the regulatory framework, they had to go through D P U, you know and as the governor does that, I think we can’t be complacent with that? I think we still need to have this conversation about raising the cap. I mean smart growth was a legislative initiative, to get the incentives back into whack and ensure that, you know the tax incentives were made sense now, that more people are using solar.

So, while that’s tracking, we still need to keep our eyes on the prize with net metering and raising that cap. So, I mean I do see them a little separate but I think you know listen, there to the original question, you know we are battling you know fossil fuel industry that that’s been very powerful. I think Massachusetts does have an advantage with local activist groups and people who have stepped up and kind of you know taken on that cause, so it’s at all levels of government people are having that conversation.

YANN: If you were to look back and I mean Massachusetts I don’t know the numbers second or third biggest solar market now definitely on a per capita basis nationally, especially outside of California, solar industry kind of there’s California and there’s X California. How would you view the progress that Solar has made over the past five or so years and what kind of advice would you give to the solar market and solar advocates, on how they can continue to improve in both legislative messaging and market penetration?

SENATOR: I mean seeing we are the number two market for solar growth in the country, I think Massachusetts has made incredible strides. Massachusetts has a 2020 goal of getting to 1600 megawatts of solar energy on the grid and I think so, where I think comparatively to other states you know, we’re really on the cutting edge. As we are on most things, I like to say so, I think in the past five years just setting goals, having goals and making the investments. We have five billion in investments in solar energy in Massachusetts, you know comparatively per capita or otherwise that’s really big.

I think the advice to– my advice to solar energy is you know this is an easy conversation for the senator from Boston and Cambridge to have because I have financial institutions in my district, I have innovative institutions right here we’re in one of them you know. I think as we talk to other legislators, we need to change a little bit of the rhetoric on how we’re talking about. We need to make sure that you know it is jobs we’re talking about, its development, its economic development and when we grow solar in a responsible way, you know that it’s not us first Sam, it’s not versus first, fossil fuels but it’s growing in a way that it’s going to bring down the cost to the end-user in the Berkshires if a solar farms built out there. And it’s really very much making it a local issue I think in government it’s something that’s lost.

I think it’s something that’s starting to come ahead now, with kind of the lack of work going on in Washington DC in Congress and with the executive branch. But you know making it a local issue and letting know the end user from all across the Commonwealth is going to see you know their pocketbooks hit or not hit or you know and making sure that people, everyone has access to solar. And it’s not just for the dentist from Lexington Massachusetts, it’s for you know– the middle income earner and the Berkshires or Springfield or Wooster. I think moving the rhetoric that way it’s just going to help the entire market from the top down.

YANN: So, there’s an ongoing movement in the solar industry to engage more of our– I mean there’s 270,000 people now working in the solar industry in the US. And there’s an ongoing push to try to get some of them to run for public office. I don’t think there are any solar professionals in the state legislature here now, but what would you– what kind of advice would you give to you know to someone that wanted to run for office to move certain things forward? And given some of your background and your expertise and the work you’re doing in criminal justice based on your background. How valuable is it to have a member of the legislature that has some domain expertise and can have the conversation you’re saying without sort of the advocates in the room?

SENATOR: Yeah, I mean it I think it’s you know it’s incredibly beneficial to have you know somewhat of an expert in the room. You know, just last week the Senate took up criminal justice reform. You know, I’ve been in the Senate for 18 months, there are people who have been in the Senate for 30 years you know I had more to say and more influence on that bill than probably any other senator in the room, just because of my background and experience. So, to have someone familiar with the industry, like I said before I wasn’t familiar with the industry, I have this one issue and that metering that I’m happy to champion and carry because it makes good sense to me. But beyond that to get into the weeds on this some of this stuff, you know I would encourage someone from the industry to run you know.

Hopefully not against me, so I want to be very clear with that, no but even, if you did run against me, you know you know elections are a good place to bring out these issues and press the issues. And you know even if you don’t win, you make sure that your opponent or the person you’re running against for that seat, you know has an idea of what’s going on. You really press them you bring them up to speed, as it will go. So, I would say that experts in the industry, as long as you’re that’s not the only reason you’re running and as long as you’re not so much of an ideologue around it. That you’re not able to work with others to get to a goal, because we can’t in this country and in the state you know let good be the evil of perfect right?

We got to be able to get there and we got to get to good. I mean this makes a lot of sense for everybody in the room to get to 5%, probably makes a lot of sense of everybody in this room to get to 10%. But we need to work in a collaborative way and to ensure that everyone in the Common wealth is heard and dealt with and it’s a process. And ideologues typically don’t make the best legislators; because they’re a little too you know they’re not pragmatic about getting to a solution. So– but expertise in the legislature, because of the bandwidth of legislators and the fact that there’s 2,000 bills right there, that we’re dealing with this session, I mean some expertise in an area will truly you know you’ll be a legislator on such ago.

YANN: So, a) were you surprised when Sia– I mean the way I found out about this bill is Sia last month wrote a press release saying, “Massachusetts needs to step up and pass your bill.” And so that kind of got some national attention on the issue. And you know how helpful was that and handicapped the forward progress, because the worst thing in the solar industry is the uncertainty. When you don’t know if you can make an investment to hire someone or when you’re looking at a customer in the eye and say I don’t know what the value of the net metering will be, that hurts and that stops progress and investment. Handicap for us how this looks going forward.

SENATOR: I mean, I think with the national recognition it’s gotten and with the local recognition, I hope you will all still push for, you know it looks pretty good. I mean there is an understanding with certain members of TUE, the telecoms utilities an Energy Committee that I talked to, that this needs to be done. So, I’d say those people who are in the trenches with this bill and the hundreds of other bills that just that committees dealing with, they understand that something has to be done. I can speak to the Senate President Stan Rosenberg, he knows we need to raise the cap. He knows that doing what we’re doing is just helping some of the backlog and not garnering further investment, further capital, further job growth in the Commonwealth.

So, I’d say there are people that understand it, but not everyone does it’s not a priority for everyone and I think it’s, you know we need to get it down to the level of each individual legislature in the Commonwealth. Their constituents need to be talking about this as a priority. Their constituents need to see the benefit of the job growth of solar being really, for everyone, for every level of income earner and they need to see the progress that can be made with what solar.

So, I’d say the bill will look really good coming out of the Senate. I would say in decamp it very high coming out of the senate and then as we as it gets further down the process and over to the house, we’re going to need a bigger push on that under.

YANN: Any of you on timing of when you think this could happen?

SENATOR: Again, I’m not on the committee, so I can’t even speak that when it will be reported out. You know I’m happy I’ve written and my staff has written letters to see that it’s reported out after the hearing, but our legislative cycle goes through next July. So, I you know I would expect it to come out of it to at least be debated on the floor before that.

YANN: Okay, so a little bit on a federal issue and because we know that you have the year of the president there the trade—

SENATOR: The senate president?

YANN: [laughter] No, the other guy. The trade commission, early this morning voted for recommendation to increase the cost of solar panels by about 35%, in what some would dub a protectionist move brought on by some players in the solar market.

SENATOR: I would agree with those people.

YANN: Which ones?

SENATOR: The protectionist.

YANN: Yeah, the protectionist and what message would you– so now the president’s going to decide if there should be increased costs of solar modules. What would you say to the president, what the impact of that might be to your constituents and the folks that you’re talking to in the solar market here in Massachusetts and the taxpayers given that this would have an impact across the board?

SENATOR: What would I say to the president? That’s an interesting question [laughter]. But in this realm and then we’re adding solar what I would say to him is that, in Massachusetts we’re doing a lot to grow solar in a responsible way. To make sure that the end user, the rate payer is seeing the benefit of solar. I would tell this president that, this protectionist move and this ruling is not going to benefit solar. Making solar more expensive to people is going to stymie growth and we can’t have this stymie of growth.

You know, this is one place where if foreign markets are creating you know a similar product for less money at this time and at this special time and growing this economy forward, that we need to keep costs low to grow the industry. We need if we– if investors I mean if finance companies are seeing that it’s too expensive to do it, I mean there’s other places they can spend this money, there’s other places they will spend this money. Solar growth in this Commonwealth and across this nation is what we need to do for future generations.

So, I would advise against it, I’m sure he would tweet something at me on the other end that was unrelated and something probably about me personally. But, I would certainly advise against it and let him know that, you know an investment in solar is an investment in our future.

YANN: So, I want to thank you for your leadership, I join everyone in the room to wish for your success in this especially this bill.

SENATOR: Our success.

YANN: Our success or your success to make us more successful and please give a round of applause for the senator [Applause].

E025: SMART Program In Massachusetts and How Regulators View 201 Petition Risk with Mike Judge

On the 14th of November, DOER released the RFP for the initial block of the much anticipated SMART program. The timing of the release was cause of many questions considering the shadows of the 201 petition which could affect the price of solar in Massachusetts. SolarWakeup covered many of these questions with Mike Judge, Director of Renewable Energy at DOER, during last month’s SolarWakeup Live! in Boston.

Full Transcript Below. (While we attempt to make it verbatim, it may miss a few words)

Make sure to rate and review the podcast!

Make sure to check out SolarWakeup Live! in D.C. on 12/6 and NYC late January.

If you enjoyed this episode as much as I did, make sure to subscribe on your favorite podcast platform including iTunes, SoundCloud and Stitcher radio. Please subscribe and share with your friends how much EnergyWakeup is helping you.


YANN: [00:00:00] Want to thank Mike judge from DOER for coming today, I am sure if you are in the solar industry in Massachusetts you know Mike and you know Mike’s work. Your work kind of depends on him doing his job. He is a director of renewable & alternative energy at DOER, he’s been at DOER for seven years so he knows the SREC program and he knows how to administer it. Also at MASSCEC, you’ve managed the solar carve out of the RPS amongst other things but now most recently you have been the leader in developing the rules of the SMART program. You finalized those rules but because it’s a tariff as we know it, the DPU, which has released some draft language, can you talk about where the process stands and what you make of the process so far?

MIKE: [00:00:57] Absolutely so the DOER, the legislation was passed last April, requiring the DOER to create new solar programs. We started working on that last summer, we had some listening sessions, we put out the draft proposal in the fall, final proposal in the late winter or mid-winter and we issued our regulations, promulgated those in August. So now DOER’s part here is almost done with components are which I can talk about in a minute but now the model tariff has been filed by the distribution companies jointly filed at the DPU and they are kicking off that proceeding, we had a deadline to intervene, several interveners, several people intervening with their granted status today and then there was procedural conference and a public hearing last week and so right now we are waiting for them to advertise the procedural schedule for the remainder of the proceeding. Don’t know exactly what they are going to do next but we did ask at the conference where they try to aim for first order date and set up a schedule accordingly so that the transition to occur hopefully spring of next year.

YANN: [00:02:13] So speaking of the transition, what is the main goal in the transition going to SREC to SMART?

MIKE: [00:02:20] I think there is a few things, the biggest one I would say is trying to create certainty and bring cost savings to ratepayers. One of the benefits of SREC its different than other states is we did actually have a good job of mitigating some of the risks, our auction mechanisms and SREC values remain high but financiers still would take very, there’s a steep discount that you’d have to take when you are selling things over a long term contract. So in some cases we’ll have taking 50% of the SREC value and the problem with that from a rep air stand point is that you are still paying 100% and so when you have an SREC that’s worth 100 dollars and someone buys it a hundred and fifty and selling it back for three hundred dollars, the generator, the owner of the facility or the developer of the facility is only getting 150 but their financial backer is getting the 150 as you are paying that. So by moving to a tariff, we can create financial certainty and you can have transactions between the utility and owner of the facility which removes a lot of that soft costs and financial costs.

YANN: [00:03:37] So talk a little bit about the process and the involvement of the industry to get to the final rules.

MIKE: [00:03:46] Yeah so we tried to really be as inclusive as possible throughout the process and so we had these initial listening sessions at the same time we were conducting some analytical work on the necessary incentive values, that was last summer and then we put out the straw proposal, collected feedback on the industry, got over 600 pages of comments on the straw proposal, 250 sets of individual comments and lots of feedback from stakeholders and then we convened a number of working groups. So we reached out to the major associations in all sorts of different stake holder groups and ask them to appoint representatives to a working group by either there’s five working groups and so they’re established on different components of the program and they about 40 pounds over the course of the fall. All different types of people, land use advocates, small solar developers, large solar developers and low income advocates, you take utilities, the attorney general’s office and the product of that was our final proposal which we then took some additional informal comments on and then we had the formal rule making another 100 sets of comments and feedback from stake holders there and that’s when well get to the final rule. So I’d like to think its been an open and transparent process where we’ve tried to solicit as much input from the general public as possible but now there is still one final process left where we are focused more on the mechanics of the program then the policy.

[00:05:32] Some important questions of the policies as we enter into that mechanics discussion but the eligibility criteria, the process of establishing incentives, all that’s really been established by the regulators.

YANN: [00:05:43] So one of the major attributes of the SMART program verses pretty any other solar programs around the country, it looks like you are really working to encourage solar projects to include energy storage; why did you choose the two kind of matrix, two kind of Y axis of percentage of capacity to solar plus number of hours?

MIKE: [00:06:15] So earlier in the Baker administration we launched the energy storage and it’s a 10 million dollar initiative, the majority of that fund is going towards administration projects and those administration projects will actually be awarded soon but the first component of that was comprehensive study on the benefits and the used cases of energy storage in Massachusetts and we found that there is tremendous for all sorts of different used cases for energy storage and there was a series of recommendations that came out of that and one of them was averaging the solar program to include solar plus storage. As we develop more solar regs 1600 megawatts DC and this will be another 1600 megawatts AC. So collectively when SMART is done, we will have probably somewhere between 2200 and 3500 megawatts AC of solar capacity in Massachusetts, nearly 95% or more that’s going to be on the distribution system too and then so that all acts as load reducer and when you have that much solar on the system, you really starting to see it very reminiscent of California, you see it today there’s a little bit of one today in the spring of this year, it was really very dramatic.

[00:07:42] So we really need to have battery storage or some way to mitigate that and we saw this was really like a tremendous opportunity to incorporate storage from the get go because it makes more sense to have storage upfront when you are building these products rather than being retrofitting it, it’s more expensive to do it after the fact so just pair them upfront. As far as to why we structure the incentive that way with its looking at the ratio of storage capacity to solar capacity and the duration of the storage, that was done primarily because of the results of the energy storage which showed that the shorter term to medium term storage with the generally sized, approximate size to the facility is compared was going to provide the best benefits to repairs and actually if you look at that chart, as you move to longer duration or higher capacity, there is a diminishing increase in the amount of incentive that the facility has received and that reflects that same thing. It’s really a sweet spot in the 2 to 4 hour and sized to the 25-60% of the solar capacity and that’s reflected in the benefits that we identified in the storage study.

YANN: [00:09:08] So talking about the mechanics of the next step of the SMART program, how much more can you do under your guidance at this point before the DPU issues the final order things like, hosting the auction, the initial auction or participating in the DPU process kind of give some guidance on things that maybe you were silent on but have an opinion on now that’s there is language around us.

MIKE: [00:09:42] I think there’s still a fair amount that we can do. So the two big things that are left on our plate are the roll out of the program and being able to do the intake of application so we have solar program administrator, the distribution company’s choice who solicited for that summer. They’ve made their selection, they’ll be executing that contract possibly this week and so there’ll be an announcement on who that entity is and then the RFP for the initial competitive procurement, that’s drafted and we are first working on details with them so that should be going out soon and those are the two really kind of big items that DOER is doing, we also have to build the application platform, make sure it’s working, get the website up and running, do a lot of outreach and stakeholder communications and then plan for that transition but in addition to that we are full intervener and the DPU proceedings, we plan on providing comments and filing briefs, asking discovery questions we’ll be active with on that proceeding, not clear if we are going to issue sponsor testimony and put up a witness and that proceeding is resolved but we plan on being involved and there are certain things that are in the tariff that are not expressly called for in the reg.

[00:11:08] An example would be the utilities cost recovery mechanism. So I’ll state just very briefly there the proposal is a fixed charge cost recovery and there are some details and mechanics of that. DOER will likely pick a position from that, I don’t know what that position is going to be this time, I can’t really speak to that but we’ll be participating in that proceeding and taking a stand on what we think cost recovery mechanism looks like.

YANN: [00:11:41] Speaking about the auction right? because you could that’s obviously everyone wants to know what the clearing price is going to be from a development standpoint but we also have this pending federal issue with the 201 petitions happening, we’re module prices can be double what they are today.

MIKE: [00:11:54] Yeah.

YANN: [00:11:55] How do you, can you have an auction before the 201 is resolved?

MIKE: [00:12:00] So I’ve spent a fair amount of time, I’ve asked this question a lot of people and the consensus generally seems to be that yes, there’s no reason to delay, we should we should put something out there is obviously some uncertainty lingering out there and I think we’re watching it very closely. The timing of the release of the RFP is actually maybe fortunate that it’s coming out a week or two later than we originally envisioned because now people will have full visibility until at least what’s recommended by the ITC and that we will be making final announcements on the result of it potentially after the White House makes a decision on what they’re going to do and we can take that into account to some extent, I think as regulators, state regulators, we try to not design our policy around what may or may not happen at the federal level because it’s hard, it’s really hard to do that and when you have sort of optionality things that might go one way or the other that’s challenging. That being said, we do have the ability to make changes to the program if necessary. So there’s something really drastic happened, it’s our reg, we can open that reg, not saying we want to I don’t think that’s you know, that’s no one wants us to do that really you know, you we don’t open regulations without careful consideration but we can take appropriate action if necessary. So we’re watching it closely, I think we’re going to run the procurement, hopefully people will be able to understand at least what their what the potential outcomes are at the time they’re submitting bits but yeah we’re well aware.

YANN: [00:13:38] But do you see you know because this is a clearing price right? There’s there there’s both financial modeling as well as strategy.

MIKE: [00:13:49] Yeah.

YANN: [00:13:50] I mean people are going to be bidding what maybe gets them below the highest clearing price. So you know maybe they don’t want their number but they’re hoping to be under the clear, clearing price number you know, what if I assume a modest whatever you know, maybe I’ll take today’s ITC recommendation and model that into my number but someone says you know what I’m not modeling any of that and maybe there’s enough of those people that unrealistically bid into the system and then all of a sudden the White House comes out with double the ITC’s amount right? I mean do you see a scenario where maybe you’d say you know what there was too much uncertainty and we have to issue another RFP?

MIKE: [00:14:39] Well we do routine the flexibility in the Reg to do a couple things, the Reg allows us to determine whether or not there was a non-competitive result, we can issue of additional solicitations. We can also administratively set prices so I think we’re sort of in a wait-and-see, let’s see what we get, let’s see what happens, let’s see how it plays out and then we can, we have some ability and flexibility to make decisions and modifications to a certain degree but if things are that really kind of dramatic impacts, then we can take further action as well if necessary.

YANN: [00:15:16] So when do you see the RFP being issued?

MIKE: [00:15:20] I’m hesitant to give like a firm date but I’d say in the next two weeks (October 31st – November 13th) or so, like it’s very it’s well developed and we’re working, it’s high priority for us.

YANN: [00:15:32] So let’s speak about some of the dynamics you know, solar advocates are coming back and saying listen, the block one makes sense. Block one there’s a clearing price, everyone under the price gets that price and then the feedback is well after that, it moves to an average, it takes that it takes the mean of the initial bids and works down from there. Which from their standpoint can be skewed if there is a wide range of bits, what do you think about that feedback and do you think there’s a fix for a process?

MIKE: [00:16:08] Yeah, so part of the reason we went that way is that there was some concern that there would be a lack of participation in the initial procurement. If people could just wait for block one and get the same rate as they could have gotten in the procurement, then a lot of people would just opt-out and just wait and see what happens but by setting the block one rate at the clearing of the marginal clearing price, then you’re sort of guaranteeing anyone who participates in that initial procurement is going to get a higher base compensation rate than anyone who waits for block one. That being said, people in block one can also take advantage of adders and other, they can be alternative on bail credit, they can mean that metering facilities, they don’t have to be a qualifying facility. So there’s some advantages to waiting to but I think that you know, there are again opportunities for DOER to make modifications to the final procurement results. If you, I’m going to throw in an extreme example here, if we saw a bid come in at one penny kilowatt hour, obviously that’s probably not a very realistic bid and that’s not something that someone can actually achieve if that was the clearing price, DOER does have the flexibility to say this was not necessarily competitive or administrative least set the price you know, I don’t know that we would take this action, I think we want to wait and see and reserve our judgment but we could say, we’ll count, we’ll set the average but we’re not going to count that one set bit in setting the average. So I think, we are hoping then nothing like that happens, we’re hoping that people are responsible and bid in what they actually need but we’re watching it closely.

YANN: [00:17:51] How do you, how do you get you know, you’re going to have, I mean some would argue that any project in the SMART program is going to have energy storage associated with it you know, many people say that these days. Energy storage prices are dropping and this will be a way to increase the return of the project. So having energy storage is just going to make financial sense for investors to participate in, you’re going to have all of this dispatchable resource, not dispatchable but not just energy but also capacity, how do you get the distribution companies and utilities to take this energy and take this power and participate in the market? Because you know it does give them some flexibility to but they’re not required to.

MIKE: [00:18:47] Well this is this with respect to capacity rights and ownership or the energy?

YANN: [00:18:56] The value of that.

MIKE: [00:18:57] So there’s actually some long-standing precedent on the net metering side in Massachusetts for the utilities taking ownership of the energy. So any energy that’s exported back onto the grid they take title to and then they sell that back into the market. They actually install the interval meters on these systems and they register the assets in ISO England, most solar generators don’t even know that they’re doing this behind the scenes and offsetting the costs of the net metering program through that. So I’d expect that would work the same way and SMART for the energy side of things. Capacity is a bit more of an open-ended question right now and I’d be hesitant to kind of offer a position on it because I don’t think the or air has a formal position that we’ve worked out yet. What I will say is that it’s been raised as a top issue of the proceeding by a number of people with me and there are two dockets actually at the TP right now, there’s one on net metering and capacity rights and then there’s SMART, which is going to have to deal with this as well and in the net metering rules in 2009 order, where a lot of the net metering rules were established, the DP said that the utilities have, are allowed to take title to the capacity in order to avoid offsetting it.

[00:20:12] They didn’t direct them to enroll in the markets and actually do something with it, they didn’t require them to take title and I think that’s the question that’s at hand, should that be firmed up and I think the same question will apply in SMART and the DPU has aligned those proceedings, I haven’t talked to them about this or anything but it seems as though they’ve outline those proceedings so that they’re happening coincident with one another and that they can issue sort of a unified approach to how this is all going to be settled going forward.

YANN: [00:20:41] Do you see potentially this discussion including the rights to dispatch the assets?

MIKE: [00:20:48] It could, I don’t know exactly what the utilities position will be, I think this is all going to get fleshed out in in discovery, in the discovery phase of the proceeding when intervenors are asking questions of the utilities, there’s going to be a lot of questions asked about what is your intent regarding the capacity? How do you intend to participate in these markets? How do you intend to offset the costs and it’ll be interesting to see what their perspectives are because I think that will probably inform a lot of the intervenors positions when they actually file testimony and briefs later on? That’s why I’m a little hesitant to say what DRS position is because I’m not entirely sure.

YANN: [00:21:26] But it’s an interesting sort of thesis right? If one party has the rights to the capacity, especially on energy storage integrated systems but they don’t own title of the actual asset therefore can’t dispatch, they wouldn’t be able to bid the capacity and to market without knowing.

MIKE: [00:21:47] No, it’s a tough question, it’s not I’m glad I don’t have to grapple with it at the DPU you buy we can just offer an opinion and they but yeah it’s, I think it is to me from the feedback I’ve received on the tariff as filed, this seems to be the top issue for, top concern among the solar industry this and the cost recovery mechanism and there’s a lot of other smaller issues and a lot of other people in intervenors in the proceeding who have a specific thing a specific item they want to address but as far as kind of issues that affect everybody that all intervenors I expect will comment on, I think these are two of two of them.

YANN: [00:22:30] What’s the fairest criticism the solar industries offered about the rules this far?

MIKE: [00:22:36] I suppose that there’s some complexity to them, that I think you know DEOR ours never really shied away from complexity. I do think it is a big shift from where we have been historically and but I think the industries, I think it’s less complicated than people think it may be once we kind of dig into it and that what it does really does is it creates a lot more options for business models. It levels the playing field between qualifying facilities and net metering, it creates this alternative to net metering in the event that that metering caps, it gives sort of a fixed price rec contract for behind the meter facilities, it has all these different adders. So I think it at first glance there’s just a lot getting thrown at you and it takes a little while to sort it out but people seem to be finding their niche like this is what, this is the market I want to serve, this is the types of projects I want to build, this is how the business models going to work and I think once people kind of get their arms around it will start to make sense but if definite, I definitely recognize there’s a lot of moving parts and it is a lot of new things and it definitely challenges people to kind of rethink how they’ve been doing business.

YANN: [00:23:58] So another critique of the DPU rules, which I’m sure you probably because you mentioned finance ability is that some of the draft language kind of makes it seem easy to cancel a contract or cancel might be the wrong word, how important is the bank ability of a SMART project for DOER?

MIKE: [00:24:27] I think it’s very important, I mean that’s really what we’re trying to create here is certainty and price certainty, revenue certainty to the generators and cost certainty to ratepayers you know what you’re getting for a revenue stream ratepayers, know what they’re paying over the life of the project and that’s, that hasn’t been the case with net metering and extracts, both of those are volatile, uncapped well that’s right kind of the cap with the ACP rate but they’re volatile streams and prices and costs for those programs can shift dramatically from year to year. This program is pretty, when something, when a project gets locked in you know what they’re going to get paid and just to be clear, I would say that the it isn’t a DPU rule, it’s the utilities proposed tariff but the, in that tariff I know there’s some concerns about some of the language around, their ability to cancel things. I think some of that is intended to just be sort of pro forma from their part certainly I think wording matters and the details, those details will be fleshed out but there a lot of the eligibility criteria for participating in the program itself, that all sits with DEOR and those final decisions will be made by DEOR.

[00:25:43] These are I think those are more tariff enrollment terms, there’s some specific things that you’re required to do as participating the tariff that could result in a cancellation and I think all that it’s going to have to be washed out.

YANN: [00:25:55] Do you do you worry as you add you know, you mentioned you know 1,600 megawatts AC of solar in the state, naturally as you add more solar to the grid, more infrastructure will have to be built and many times solar developers will end up having to build new infrastructure substations etc. Things that cost millions of dollars, do you worry that over time the cost of having to build up the infrastructure goes counter to the fact that the revenue streams are going down over time?

MIKE: [00:26:31] Absolutely, I mean I’ve heard a lot of, that’s another concern I think of people is interconnection costs seem to be going the opposite direction in many cases and I think storage can help mitigate some of that but and you know there’s maybe work that needs to be done on the interconnection side of things at some point as well. The, but that is definitely a concern of ours and we did build into the program review, I can’t remember how many megawatts, after a certain amount of megawatts are reserved, we will conduct a review and potentially make changes if necessary. So if things are going slow, if one market segment isn’t really picking up, if one utilities service territory is lagging behind, we can step in and modify our rules to see if we can kind of adjust that accordingly and get things back on track. So we’ll definitely be watching intricate, we watch interconnection and monitor it very closely.

YANN: [00:27:31] What kind of advice can you give other states right because you know, as a lot of people have been in the weeds here and maybe they think it’s too complex. There’s no doubt that Massachusetts continues to make forward strides in growing its solar market whereas other states are not right? I mean the and it’s not like you have this supermajority from a political standpoint you know, it’s a diverse state politically and you know what kind of, what are you, are you speaking with other states about crafting language? What kind of advice are you giving them and why do you think other states that could be doing something like this, are falling short?

MIKE: [00:28:15] It’s hard for me to kind of speak as to why they might be I mean I think one thing that we’ve done is, we’ve haven’t let perfect be the enemy the good sometimes I mean, I so our programs are complex but we also just kind of really, we put something out there and the goal is to get projects in the ground, let’s get things built and then we’ll learn from our mistakes and then adjust accordingly in the future. If you spend too much time on the front end trying to craft the perfect policy and then you put something out and it doesn’t really work, I think that there’s been some states that have seen that happen, we do talk to other states and especially a lot of our neighboring states. There’s been a lot of interest in some of the land-use stuff that we’re doing among East Coast states, that is a part of our program that you know we sit under the Secretariat of Energy and Environmental Affairs. So when projects get cited on farmland or on a wetland or near a wetland, then that impacts some of our sister agencies and there were all answering to the same secretary so he hears it from those agencies and it was a very important thing for him that the, that our Paul is, our solar incentive policies were in alignment with our environmental and agricultural policies so we spent a lot of time and effort crafting that and a lot of states have taken notice, spend time on the phone with Connecticut, Maryland, Rhode Island, who similarly smaller East Coast states with not a lot of land and but the ambitious goals trying to build solar and they’re trying to grapple with how do we match our environmentally in our energy policy?

[00:29:53] So yeah, I mean, I guess advice other states, don’t let perfect be the enemy of the good, listen the stakeholders and try to be as inclusive as as many business models as possible because Solar is complicated. Every project is different and there’s all sorts of different types of solar projects and solar companies and you got to try to find a way to be as inclusive as possible.

YANN: [00:30:18] Speaking of stakeholders and advocates you know, maybe you’re not going to give criticism but give some feedback to solar advocates on how to improve the language you know, I asked us the same question to Senator bond Cory this morning you know, how do we get, why we in this net metering fight again and you know with no foresight on when that will get resolved but give some feedback to the other side of the table that are asking you for things and how can they improve their messaging, when they’re trying to get something from you?

MIKE: [00:31:00] Well I will say that I think the solar community of Massachusetts has done a great job over the last few years of getting a more cohesive message and being more on the same page. A few years back, I think a lot of fractures kind of emerged where you had different sectors of the industry sort of arguing against one another, there was a bill back in 2014.

YANN: [00:31:28] Or 41, 85 yeah.

MIKE: [00:31:29] And there was a lot of internal debates and it was, I think surprising to the administration at the time in the legislature to watch the solar industry have infighting amongst each other and I think there’s been a lot of good work done since then but it’s still not perfect, I mean you have a lot of different voices to the extent that people can speak with one voice, I think that’s very helpful. I know that’s not always know is easy to do and actually in the DPU proceedings SIA has intervened on behalf of a number of associations so there’s not different associations participating in that proceeding, there’s only one voice and I think that will be helpful for the industry to not have conflicting messages being sent to the DPU about what solar is looking for out of that. I know that could be very difficult though, I think that’s probably the biggest thing I would I would say and because I know legislators have said this to me too that, it seems like they don’t get the same message from solar stakeholders, like one group wants one thing one, wants another thing they’re all saying they want net metering cap increases but they all say something different,  they say it in a different way or say something different and it’s just, they don’t live and breathe this every day.

[00:32:47] So they spend a lot less time thinking about this than I do or the people at DOER do and so when they hear conflicting things, I think it just confuses them and they say well, we’re not going to deal with that so do the extent you can unify that message that’s really helpful.

YANN: [00:33:06] How important is it to your success that the net metering caps are increased?

MIKE: [00:33:12] Well I think that we have tried in the SMART program to ensure that net metering caps being increased are not a barrier to the success of the program. That’s why we’ve created the alternative on bill credit, that’s why we’ve allowed for a mechanism that would level the playing field a bit between net metering facilities and qualifying facilities because in today’s environment, it being qualifying facility doesn’t make a lot of sense Massachusetts. If you have SRECs in the QF rate, you’re just making a lot less money than someone who has SRECs net metering but Nitor SMART it’s not as much of a difference between those two and I think we’ve tried to ensure that continued increase of net metering caps is not critical to the program success because that was a major barrier for SRECs net metering caps weren’t raised, then S trucks weren’t going to get built whereas traditionally wouldn’t get built and all right so I don’t think it is as critical to the success of the SMART program as it was to the success of the asteroid program but certainly we remain engaged in that.

YANN: [00:34:23] Discussion, do you have a handicap of your expectation for the net metering cap increase?

MIKE: [00:34:30] That’s on well we’re just between friends.

YANN: [00:34:32] Yeah. So with that I want to thank Mike for joining us today.

MA DOER Releases 100MW RFP, Starting SMART, But Results Could Be Changed

  • MA DOER has released the initial block procurement with a 100MW RFP ahead of the resolution of the 201 petition case which could increase the cost of solar modules significantly
  • The MA distribution companies, that make up the SMART program, have selected CLEAResult as the administrator and the initial bidder conference will occur on November 17th, 2017
  • DOER has issued the final regulations and submitted them to the DPU to enact the tariff rules. DOER has requested the tariff to be created by June 1st, 2018 but the process is ongoing
  • The regulations from DOER and the RFP are meant to be final, however if the 201 case severely impacts the results of the program, DOER reserves the ability to make changes
  • Developers are looking at their own situation for bidding strategy. Some bidders are considering submitting projects meant for SREC II as NEM cap increases seem unlikely and other bidders have modules reserved without 201 impact

On the 14th of November, DOER released the RFP for the initial block of the much anticipated SMART program. The timing of the release was cause of many questions considering the shadows of the 201 petition which could affect the price of solar in Massachusetts. SolarWakeup covered many of these questions with Mike Judge, Director of Renewable Energy at DOER, during last month’s SolarWakeup Live! in Boston.

The initial 100MW RFP is managed by the newly selected administrator, CLEAResult, and will set the clearing price for the initial set of solar projects. All blocks after the RFP will be benchmarked against this RFP making the pricing important for the entire program.

As the 201 case is not fully resolved, bidders will have to predict its outcome or ignore it completely. Some developers commented to SolarWakeup that modules have already been procured which are not impacted by the outcome of the trade case. In the scenario that the case increases the cost of solar panels, future blocks of the program could result in underpriced tariffs for the solar generation as capital costs of installation increase.

Mike Judge commented about this scenario to SolarWakeup, “We [DOER] do have the ability to make changes to the program if necessary. So if something really drastic happened, it’s our reg, we can open that reg,” Mike continued, “we don’t open regulations without careful consideration but we can take appropriate action if necessary.”

DOER is hopeful that bidders understand the various outcomes of the 201 case and looks at changes to the regulations as an option of last resort. This doesn’t minimize the impact to the RFP results. Bidders with SREC II projects, some operating, could decide to bid those projects into SMART prior to electing SREC II compliance if they view the NEM cap increase as unlikely.

Make sure to check out SolarWakeup Live! in D.C. on 12/6 and NYC late January.

Make sure to subscribe to EnergyWakeup on your favorite podcast platform including iTunes, SoundCloud and Stitcher radio. Please subscribe and share with your friends how much EnergyWakeup is helping you.

You can hear the full podcast here with transcript

E024: Live From DC, Tom Matzzie, CEO of CleanChoice. Talk Power Markets, Community Solar And Policy

Live from MDV-SEIA’s Solar Focus Conference in Washington DC, I speak with Tom Matzzie, CEO of CleanChoice Energy. CleanChoice is a retail energy retailer that sells clean energy to homeowners and businesses across 9 states.

As a market participant, CleanChoice can create the products that can revolutionize solar development across markets, even outside of community solar regulations. CleanChoice is the largest developer of community solar in Maryland and working on a project in Brooklyn.

Tom is a politics veteran that once live tweeted a retired CIA director’s conversation with a reporter while on a train. This is a great conversation for anyone that works in solar because you need to know more about power markets than you do now.

Make sure to rate and review the podcast!

Make sure to check out SolarWakeup Live! in D.C. on 12/6 and NYC late January.

If you enjoyed this episode as much as I did, make sure to subscribe on your favorite podcast platform including iTunes, SoundCloud and Stitcher radio. Please subscribe and share with your friends how much EnergyWakeup is helping you.