Environmental and Land Use Law

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Emergency SREC Regulation Takes Effect, as DOER Begins Work on New Solar Incentive Program

Sewing the seeds of a new solar incentive program.

To alleviate the backlog of solar projects that have recently submitted SREC II applications in excess of the program’s cap – as well as to address larger “market uncertainty” – Massachusetts’ Department of Energy Resources (DOER) filed an emergency regulation that took effect April 8.

The regulation will remain in effect for 90 days (until Thursday, July 7), as DOER must conduct full rulemaking proceedings to make it permanent.

DOER announced that is has begun developing its next solar incentive program, in partnership with renewable energy consultant Sustainable Energy Advantage (SEA). SEA is currently conducting a financial analysis, based upon which DOER will lead a public rulemaking process.

The Emergency Regulation

For projects over 25kW – that had either received Assurances of Qualification or submitted an SREC application by April 8 – the regulation will grant Statements of Qualification dated April 8th. But the statements will only remain valid if the project is built (or authorized to interconnect) by January 8, 2017.

For projects 25kW or smaller – that had submitted an SREC application by April 8 – the regulation will qualify them under the SREC II program, but only if they resubmit their applications with utility authorization to interconnect before “the start date of the next incentive program.”

The SREC II Program

The SREC-II program was the latest iteration of DOER’s Renewable Energy Portfolio Standard (RPS) Solar Carve-Out program. It became effective April 25, 2014, and recently met its caps.

The program mandated that utilities meet renewable energy portfolios standards by purchasing a certain number of Solar Renewable Energy Certificates (SRECs) – tradable property rights to the environmental benefits of solar power generation.

One SREC is equivalent to 1000 kW-hours of solar-produced electricity. The program valued small projects most highly and large projects least. It used factors to scale the value of SRECs, ranging from a factor of 1.0 for small projects (ex: residential, roof-mounted), to .7 for large-scale ones (ex: large solar farms on private land).

As solar technology becomes more efficient and costs decrease, DOER plans to gradually reduce the subsidies to solar developers that SRECs represent. The new incentive program will likely reflect that reduction.

This blog discussed the SREC II program in more detail when it became effective in 2014.

Image Credit: Philippa Willitts

 

About the Author

Kevin D. Batt – Senior Counsel

Kevin represents public clients in general municipal, land use, environmental, energy and construction matters.

Please contact him at (617) 621-6514 or by emailing kbatt@andersonkreiger.com.


Posted In: Renewable Energy, Solar Energy

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