The World's #1 Renewable Energy Network for News, Information, and Companies.
Untitled Document

Shoring up Solar in Massachusetts

Massachusetts officials are preparing to take a number of steps to shore up one of the state’s key solar power subsidies, including spending millions of dollars to buy up the credits developers use to help finance their projects.

Solar installations have spread rapidly in Massachusetts over the last year and a half, thanks in large part to a series of state and federal subsidies. Gov. Deval Patrick just last month held a press conference on the solar-paneled roof of a South Boston building to announce that the state had achieved his goal of 250 megawatts of installed solar capacity four years ahead of time. He set a new target of 1,600 megawatts by 2020. 

But the rapid growth of solar power in Massachusetts has flooded the market with one of the special credits developers use to finance their projects, driving down their price and threatening to bring a halt to the industry’s expansion. The Patrick administration is now trying to siphon off some of the excess supply so prices can stabilize.

“There’s an oversupply in the marketplace,” said Dwayne Breger, the state’s director of renewable and alternative energy development. “We’re trying to get the market back into equilibrium.” 

The moves by the Patrick administration are another sign of how dependent solar power is on two subsidies that are ultimately paid for by electric customers across the state. One credit pays solar power generators an inflated price for their electricity. The other credit, called a solar renewable energy credit, or SREC, pays them simply for producing solar electricity. 

For every 1,000 kilowatt hours of electricity a solar developer produces, the developer is issued one SREC. The SREC has value because state regulators require companies that sell electricity in Massachusetts to buy solar credits equal to .27 percent of their electricity sales. The price of the credits fluctuates with supply and demand. In 2010 and 2011, when demand for the credits outstripped supply, the credits were selling for as much as 55 cents a kilowatt hour, more than three times the current retail price of electricity. But as solar production ramped up in 2012, SRECs flooded the market and their price dropped precipitously to around 20 cents a kilowatt hour. 

Starting Friday, regulators plan to start bringing stability to the SREC market by taking three steps. First, companies selling electricity in Massachusetts will be required to increase their SREC purchases to .38 percent of their sales. The state Division of Energy Resources also plans to begin buying up $8 million to $11 million of SRECs. And next month the DOER plans to hold a first-of-its-kind auction with the goal of selling off surplus SRECs at the price of 28.5 cents a kilowatt hour. 

Breger says the goal of the initiatives is to stabilize the market for SRECs so the solar power industry can continue to grow in Massachusetts. “We’re not targeting a certain price” for the SRECs, Breger said. “We’re trying to help the market get back into a supply-demand balance.” 

This story was cross-posted in the Clean Energy Finance Center’s biweekly newsletter, the Clean Energy Finance Source. Subscribe to CommonWealth Magazine to read more Massachusetts-oriented energy stories from MassINC. 

Lead image: Lighthouse via Shutterstock

Untitled Document

RELATED ARTICLES

States Already Seek To Delay Clean Power Plan

Andrew Harris, Bloomberg Fifteen states led by coal-rich West Virginia asked a federal court to stall Obama administration rules intended to c...

Stolen Solar Panels and Sabotage A Challenge for Powering India With Renewable Energy

Anindya Upadhyay, Bloomberg Disappointment spread across Tarun Singh’s face when he saw that parts of his solar power microgrid in eastern India’...

Suntech Parent Company Buys Majority Share of US-based Suniva

Ehren Goossens Shunfeng International Clean Energy Ltd., the Hong Kong-based solar company controlled by billionaire Zheng Jianming,...

Sunrise in Pakistan as the Country Delves into Solar PV

Robert Harker Pakistan has joined the list of countries that are exploring solar power as a means to bridge critical energy generat...

PRESS RELEASES

Array Technologies’ DuraTrack HZ v3 Continues to (R)evolutionize at SPI

Array Technologies, Inc. (ATI) prepares to showcase its recently launched tracking syst...

Appalachian's Energy Center assists counties with landfill gas to energy projects

The Appalachian Energy Center at Appalachian State University recently completed a proj...

Early Bird Registration Deadline for GRC Annual Meeting is This Week

The deadline for early-bird rates for registration for the biggest annual geothermal ev...

Redesigned HydroWorld.com Video Gallery

Hydropower news and information, and interesting promotional announcements are now avai...

FEATURED BLOGS

Transitioning to Net-Zero Living

Judith and Jeffrey adore living in Belfast, Maine – a quaint harbor town of Belfast, Maine. They previously res...

The True Cost of Electric Vehicles in Australia

In order to avoid increased congestion, further greenhouse warming and lessen Australia’s reliance on imported ...

The Coming Multi-trillion Dollar Energy Investment Drive

In coming years, a multi-trillion dollar low-emission energy investment drive will get underway. Three catalysts wil...

The Perfect Elevator Pitch

The elevator pitch is a concise statement that grabs attention and communicates value, ideally leading to a next step...

FINANCIAL NEWS

Bruce Mohl is the editor of CommonWealth Magazine, the quarterly journal of Massachusetts politics and civic life. Mohl came to CommonWealth from the Boston Globe, where he spent nearly 30 years in a wide variety of positions covering business an...

CURRENT MAGAZINE ISSUE

Volume 18, Issue 4
1507REW_C11

STAY CONNECTED

To register for our free
e-Newsletters, subscribe today:

SOCIAL ACTIVITY

Tweet the Editors! @jennrunyon

FEATURED PARTNERS



EVENTS

Intersolar South America 2015

Exhibition and Conference: September 1-3, 2015 Intersolar South America ...

Intersolar Europe 2016

Exhibition: June 22-24, 2016; Conference: June 21-22, 2016 Intersolar Eu...

Intersolar India 2015

Exhibition and Conference: November 18-20, 2015 Intersolar India 2015 I...

COMPANY BLOGS

How To Recruit An Internal Ally

When you’re collecting information for a proposal, the person with...

The Proof Is Not Always In The Pudding

One of the best ways to turn a skeptical prospect into a buyer is to giv...

Pushing Beyond The Cushion

Efficiency projects are all too often viewed as “optional” o...

NEWSLETTERS

Renewable Energy: Subscribe Now

Solar Energy: Subscribe Now

Wind Energy: Subscribe Now

Geothermal Energy: Subscribe Now

Bioenergy: Subscribe Now  

 

FEATURED PARTNERS