It’s still a great time to go solar in Massachusetts, but 2014 will bring changes. Governor Deval Patrick, one of the biggest advocates for clean energy, will be stepping down and a new elected official will take his place. A new SREC program will emerge. With SREC II, there will be changes in how SRECs are calculated, how much they are worth, and new financing opportunities for residential customers. And, last not but not least, electricity prices are going up… way up!
The solar highlights for the upcoming year include:
1. 2014 is Governor Patrick’s last year in office, but his solar legacy will continue.
Solar companies in Massachusetts felt a bit uncertain as we approached the end of the Governor’s term in office. Under the current administration, the solar energy capacity installed increased 80 times from the 3 MW installed in 2007 to over 250 MW in mid-2013. It came as a surprise when the goal was reached 4 years early. Emergency regulations were put in place to continue the current SREC program (SREC I) in the short term and plans were announced for a new SREC program (SREC II), with a goal of 1,600 MW by 2020.
2. SREC I will end, but SREC II is still very good.
The Massachusetts Department of Energy Resources (DOER) began the formal rulemaking process for the SREC II program on January 3rd and we anticipate SREC II will go into effect as early as the beginning of Q2. One of the biggest changes is the introduction of SREC factors allowing different projects, categorized by size and market sector, to earn SRECs at different rates. For instance, residential and small commercial projects will earn SRECs at a quicker pace than larger commercial or utility-scale projects. The value of SRECs in SREC II will be a bit lower than SREC I, but we anticipate this will only add a half year to the time to payback of a residential solar investment.
3. A state-sponsored financing program will emerge as the Commonwealth Solar II rebate sunsets.
The Commonwealth Solar II rebate is still in place as of Q1 2014, but the rebate is set to be phased out with the introduction of a new financing program that will encourage direct ownership of residential PV projects. Given the information currently available, funds will not be available for third-party leasing or PPA arrangements and the financing should go into effect at about the same time as SREC II. Details of the new loan program are not currently available as DOER is developing a proposal for stakeholder review.
4. Rising electricity prices makes solar shine even brighter.
Massachusetts electricity prices in past years have held relatively steady, but in 2013, we saw rates increase about 8 to 10% in Massachusetts and it looks like more the same is happening this year. Until increased their cost of electricity in December 2013 by a penny and NSTAR announced a two cent rate hike for Sudbury residents, moving prices from $0.17 per kWh to almost $0.19 per kWh. Planned increases have been attributed to natural gas prices and storm related charges. With almost 75% of Massachusetts electricity generation coming from natural gas pipelines, it’s no surprise why the state is investing in solar. Homegrown renewable energy creates local jobs and protects our state’s economy. For individual system owners, you have the benefit of locking low electricity costs.
What does this mean for Massachusetts residents? You haven’t missed your chance to invest in solar. The return and payback of a solar PV system is still excellent and Massachusetts continues to have some of the best solar incentives in the country. Brightstar Solar is a Massachusetts solar installer focused on the residential and small commercial sector. We work with each customer individually to maximize incentives, navigate the installation process, and complete grant and rebate paperwork. Please contact us if you are interested in a complimentary solar evaluation of your business or home in Massachusetts.
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