New Hampshire, USA — While most incentives focus on renewable energy electricity and fuels, the Northeastern part of the United States has slowly been making inroads to include renewable heating as part of state Renewable Portfolio Standards. Now, a Coalition has formed in Massachusetts to include biomass, solar and geothermal heating in the Massachusetts Alternative Energy Portfolio Standard. SB 1593 was filed in early January 2013 by Sen. Finegold of Andover, Mass.
Following a recent win in New Hampshire, which added thermal energy to its renewable portfolio standard last year, other New England states are noticing the benefits. “Similar to New Hampshire and Maryland, the Massachusetts bill is technology agnostic. Anything that is producing useful thermal energy can be applied,” said Chris Williams of the HeatSpring Learning Institute.
More than 85 percent of U.S. heating oil is consumed in New England, which amounts to about 5 billion gallons per year, according to Charlie Neibling, principal and partner of Innovative Natural Resource Solutions and former general manager of New England Wood Pellet. Many areas, including large sections of Massachusetts, Vermont and Maine, do not have access to natural gas and must use pricey heating oil and propane — in Massachusetts alone, 54 percent of households heat with oil and propane. Ground- and air-sourced heat pumps, biomass and solar thermal are the only technologies that can either eliminate or significantly reduce these expenses, said Williams.
The barriers to develop these resources still exist, though. “The operations and maintenance costs are very minimal, but the upfront cost is a little more. So when people are investing in all of the equipment, the decision to go with the efficient technologies is a little harder to make,” Williams said. But installation costs have the potential to drop slightly as capacity increases.
However, if the bill is passed, it will allow consumers to sell the energy they produce back to the utility – similar to an SREC market. According to Williams, adding this production-based incentive will significantly increase the profitability of property owners inventing in it.
“Instead of spending $2,000 on oil each year, they will be saving that $2,000 and getting maybe a $600 to $700 REC payment every year,” he said. “When you increase the amount of money every year with new technologies by 20-30 percent, that can be pretty substantial.”
Creating a larger REC market with developed technologies also has the potential to significantly lower fees for utilities. In 2008 the Green Communities Act was passed which included specific technologies that were allowed under the Massachusetts Alternative Portfolio Standard, such as combined heat and power and electricity stored in flywheels. These are very niche technologies that had not been developed substantially, said Williams, so there is a constant supply shortage, which cases utilities to pay a fine since they are not purchasing enough credits.
Utilities have had to pay significant compliance fees under the Green Communities Act, which totaled $12 million in 2011 alone, explained Williams. “So now we have these other technologies that are much more robust and can be deployed much faster, which could decrease the amount of fines that utilities are paying.” According to bill supporters, these market corrections will ultimately reduce costs for ratepayers.
If the bill is successful, Williams hopes it will spread to other states. Vermont, for example, has set a goal to use 90 percent renewable energy by 2030, but currently nine out of ten detached homes use oil or propane for electricity and heat. A coalition is already forming in the state to introduce similar incentives, Williams noted.
Supporters of the Massachusetts bill include the Massachusetts Forest Alliance, Solar Energy Industries Association, Biomass Thermal Energy Council, and GeoExchange.
Legislative action is expected to take place this fall. Stay tuned for continued coverage as it unfolds.
Lead image: Heating and cooling via Shutterstock