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Massachusetts Raises Caps on Solar Net Metering

Massachusetts has raised the caps on the Commonwealth’s net metering program. The governor’s signature was inked on April 11, 2016 on a bill approved by the legislature last week, after months of negotiation.

Net metering programs allow homeowners and other solar customers to sell excess power they generate back to the electrical grid in exchange for a credit. Each utility has a cap on the amount of large-scale projects that can receive credits in their area. Existing net metering caps have been reached in much of Massachusetts, inhibiting further solar development in the state.

The new law, seen by many as a compromise between the competing interests of solar advocates and utility companies, will lift the cap by 3 percent (from 4 percent to 7 percent of peak load for privately owned systems, and from 5 percent to 8 percent for municipally owned installations) for public and private projects. While expanding the amount of eligible projects, the new law will lower the rate of individual credits by 40 percent for most new large-scale development.

The law also allows utilities to apply to state regulators for a “monthly minimum reliability contribution,” which is a fixed charge to the owners of solar systems. Utilities argue that these fixed fees are justified to offset financial burdens imposed on non-solar customers through the use of the utility’s electric distribution system by net metering customers.

Single-phase systems below 10 kW and multiphase systems below 25 kW, such as residential rooftop arrays, are exempt from the cap and reduced payments. Further, existing systems that are already connected to the grid are grandfathered in under the old rates for a period of 25 years.

Additional information on the net metering in Massachusetts can be found here and a copy of the bill that was signed into law can be found here.

© 2019 Foley & Lardner LLP

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About this Author

Jason W. Allen, Foley Lardner, Energy Industry Lawyer, Finance Attorney
Partner

Jason Allen is a partner and business lawyer with Foley & Lardner LLP, where he is a member and co-chair of the Energy Industry Team. He is a member of the Finance & Financial Institutions, Transactional & Securities, and Private Equity & Venture Capital Practices. Mr. Allen’s practice focuses in the areas of mergers and acquisitions, private equity, finance, and general corporate and commercial law, with a particular emphasis on transactions in the energy industry. 

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Thomas Mullooly, Energy Attorney, Foley and Lardner, Renewable project develop
Of Counsel

Thomas Mullooly is an energy lawyer with Foley & Lardner LLP. He has in depth experience across all regulatory aspects of the energy industry and provides counsel on contracts, mergers and acquisitions, renewable project development, and state and federal and ISO compliance issues. He has led regulatory proceedings and litigation before FERC and in state commissions across the country. Mr. Mullooly is vice chair of the firm’s Energy Industry Team.

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Justus Britt, Solar Energy Project Attorney, Foley Lardner Law Firm
Associate

Justus Britt is a business lawyer and special counsel with Foley & Lardner LLP. Mr. Britt focuses on the development and acquisition of solar energy projects. His project development experience includes advising clients on real estate, permitting, and construction matters, including negotiating supply, EPC, and O&M agreements. Mr. Britt’s acquisition experience includes leading due diligence efforts and assisting on stock and asset purchase agreements, as well as joint venture agreements. He is a member of the firm’s Energy Industry Team and the Transactional...

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