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

Hybrid solar minigrid to power Tanzanian island village

Tildy Bayar

A hybrid solar photovoltaic-battery energy storage-diesel minigrid project aims to provide power for around 400 households in the remote island village of Lake Victoria (pictured) in Tanzania. 

World Moves Toward 100 Percent Renewable Energy – First Electricity, Then Heating/Cooling, and Finally Transportation

Junko Movellan, Correspondent The exclusive use of energy from renewable resources in at least one sector has now become a feasible goal for 8 countries. Diane Moss, Founding Director of Renewables 100 Policy Institute, discussed this remarkable develop...

Solar power growth impacting UK electricity sector

Diarmaid Williams

Q2 of 2015 saw a large increase in the generation of electricity from solar PV in the UK, with the growth having a significant impact on electricity market prices and other supply factors.

PACE Finance Opening Doors for C&I Solar In California

Susan Kraemer, Correspondent With its excellent renewable policy, California leads the nation in solar. Over the years both the Renewable Portfolio Standard and the California Solar Initiative drove utility scale and residential solar deployment. But w...
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! @megcichon @jennrunyon

FEATURED PARTNERS



EVENTS

Grid-connected and Off-grid Photovoltaics

This training covers all aspects of planning, installation, maintenance,...

5th Annual Hydro Plant Maintenance

Join maintenance professionals to discuss the challenges in maintenance ...

2015 Green Energy Expo

Stop by and visit Canadian Solar at the Green Energy Expo in Mexico City!

COMPANY BLOGS

Prevailing At A Premium

As efficiency sales professionals, we’re often faced with situatio...

Do Your Goals Match Your Values?

Before you set goals for your company or your personal work performance ...

LSX rises with sustainable wine making in Mexico

his custom LSX solar canopy shades the upper deck organic gard...

NEWSLETTERS

Renewable Energy: Subscribe Now

Solar Energy: Subscribe Now

Wind Energy: Subscribe Now

Geothermal Energy: Subscribe Now

Bioenergy: Subscribe Now  

 

FEATURED PARTNERS