MA net metering expands under new law

Tuesday, August 14, 2012

Massachusetts legislation signed into law earlier this month provides a variety of incentives for renewable generation in the northeastern US and adjacent Canadian provinces. Senate Bill 2395, An Act relative to competitively priced electricity in the Commonwealth, expands opportunities for net metering, a practice whereby electricity consumers can spin their meters backwards and offset the cost of electricity they buy by producing renewable power themselves.

Under existing Massachusetts law, qualified retail electricity customers who own distributed power generation equipment like solar photovoltaic panels have the right to sell excess power to their local utility at the same retail rates the customers pay to buy power from the utility.  In essence, this allows customers to offset their utility bills for purchasing power by producing more power than the customer needs.  This can be a powerful incentive for customers to develop distributed generation projects, because the retail rates utilities must pay for net metered power are typically higher than the wholesale rates otherwise available to distributed generators.

To limit the size of this incentive, previous law capped net metering to 3% of each utility's historic peak energy load.  Privately-owned equipment like solar panels on businesses or homes was capped at 1% of historic peak load, while publicly-owned facilities (schools, governmental buildings, etc.) were capped at 2%.

The new law doubles the amount of consumer-owned generation eligible for net metering, raising the private and public caps to 3% each.  This amounts to a tripling of the amount of privately-owned distributed generation eligible for net metering.

The law also allows anaerobic digestion to qualify for net metering.  This expansion of eligible technologies is likely to spur the expansion of projects that convert food, farm, and other organic waste to biogas for combustion in engines or turbines connected to electric generators.

An anaerobic digester located on a farm in New England.  The digester breaks organic waste down into biogas that can be used to produce renewable electricity.

As I noted yesterday, the new law also more than doubles the amount of renewable electricity that utilities must purchase from independent generators through long-term power purchase agreements.

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