Net metering in Massachusetts: one of the Bay State’s top solar incentives

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net metering massachusetts 2018

The best states to go solar in all have at least one thing in common, and that is beneficial net metering policies. Massachusetts’ net metering policy allows property owners to send electricity generated by their solar panel system onto the grid, and receive credit on future electric bills for excess energy produced by the system. 

Net metering is particularly important in places with significant seasonal weather differences. When installers design solar panel systems, they take roof size and electricity needs into account. In Massachusetts and much of the Northeast, installers also carefully consider geography and weather patterns. A 6 kilowatt (kW) system in Massachusetts will produce less electricity over the course of a year than a 6 kW system in California because of the differences in weather patterns and sunshine.

To help you get the most out of your solar panels, your installer will cover as close to 100 percent of your electricity needs as possible given the amount of available roof space and regional factors. Thanks to Massachusetts’ net metering policy, solar system owners can “bank” net metering credits in the summer when there’s more sunshine and more hours of daylight. Then, come winter, they can use those credits to keep their monthly electricity costs low.

Current net metering policies in Massachusetts

Massachusetts currently has a cap on the amount of solar that is eligible for net metering. This cap varies depending on the utility company, and whether the system is publicly or privately owned.

Large-scale solar panel farms (and their beneficiaries) are most impacted by the cap. The majority of Massachusetts homeowners don’t have to worry about the cap, because single-phased systems under 10 kW (like most residential systems) are exempt from it. Homeowners can choose to install a system larger than 10 kW, but will need to apply with the Department of Public Utilities (DPU) for a special cap allocation, which can be a long process with no guarantee on approval.

The state of Massachusetts currently requires all regulated utility companies (which include the three largest utilities in the state: National Grid, Eversource and Unitil) to offer net metering. Municipal utilities aren’t required by the Department of Public Utilities to offer this service, but many are solar friendly and offer some form of net metering regardless.

National Grid’s and Eversource’s net metering policies

The two largest utility companies in the Bay State, National Grid and Eversource, have favorable net metering policies and bill solar homes based on their net use of electricity.

National Grid and Eversource offer net metering credits that cover distribution, basic service, transmission, and transition changes on Massachusetts electric bills for residential solar panel systems that are exempt from net metering caps. Credits are calculated as and appear on your electric bill as a dollar amount for both utilities, not a kWh amount.

Net metering doesn’t cover 100 percent of your monthly electricity bill. There are some charges that you’re still responsible for paying as a customer of the utility, including:

  • Fixed customer service charges the utility may have (these remain the same regardless of your energy consumption)
  • Mandatory funds for energy efficiency or renewable energy programs
  • Applicable demand charges

With either National Grid or Eversource, a customer can choose (with certain limits) where to send their excess net metering credits. Many property owners choose to bank these credits and allocate all to their own electric meter. You also have the option to virtually “offset” another utility customer’s usage, as long as 1) the meter is under the same distribution company as your system (e.g., Eversource customers can only virtual net meter credits to another Eversource account) and 2) the meter is located in the same electricity load zone. Some property owners elect to donate net metering credits to non-profits in the area, or nearby friends or family members that could use the discount on their electricity bill.





Don



How net metering impacts other Massachusetts solar incentives

One of the biggest incentives in Massachusetts right now is the solar renewable energy certificate (SREC) market. Solar system owners receive certificates based on the amount of electricity being produced by their system, which they can then sell for a profit. Utilities buy SRECs to meet their renewable energy requirements mandated in the state’s renewable portfolio standard (RPS).

The price of an SREC can vary depending on supply and demand in the market at the time, but an average homeowner in MA generates six to eight SRECs a year, which are selling for roughly $265 at the time of this post. Net metering plays no role in this incentive, as they’re completely separate.

Currently, Massachusetts is in the process of transitioning away from the SREC program, and is rolling out a new incentive program called SMART, otherwise known as the Solar Massachusetts Renewable Target. While still a production-based incentive like SRECs, SMART guarantees a rate per kWh of energy produced, instead of generating whole certificates to sell at market prices.

Unlike the unpredictability of the SREC market, in the SMART program homeowners will be guaranteed a fixed rate per kWh for the duration of the program (10 years for systems under 25 kW). SMART is made up of blocks that each have a set per-kWh rate. As more solar system owners enroll, blocks fill up, and incentive amounts decrease. The SMART program rates also also change based on utility company. For example, a homeowner who uses National Grid for electricity may receive a lower tariff amount than a customer of Eversource, depending on the block they’re eligible for.

Another major difference between SREC and SMART is that SMART takes your net metering credits into account when calculating your incentive value.

For example, in the proposed rate for Eversource Block 1, homeowners are eligible for a standard incentive value of $0.39/kWh. Assuming that a homeowner’s net-metering credits with Eversource average out to roughly $0.18/kWh, this homeowner would receive a $0.21/kWh credit ($0.39/kWh SMART credit – $0.18/kWh net metering credit = $0.21/kWh).

For an average 6 kW system in Massachusetts that produces 575 kWh a month, the SMART program is equivalent to an incentive of $120 a month. This amount may decrease over the years if your utility companies rates increase (and therefore, net metering credits change), but the all-in rate of $0.39/kWh would remain fixed.

The SMART program is currently being finalized, and is expected to be rolled out summer 2018.

Going solar in Massachusetts

As with any big purchase, it’s good to evaluate multiple offers from different installers. If you’re looking for rough numbers to get an initial idea of cost, try EnergySage’s Solar Calculator that offers cost and savings estimates based on your electric bill and area. If you’d like to get in touch with installers about your options, you can sign up on EnergySage, to receive multiple quotes from local installers to compare side-by-side. Both the calculator and custom quotes take current incentives, including net metering, into account.

Any reputable local installer will be familiar with the current net metering policies in your area. Prior to signing a contract, it’s worth asking any installer about what you’ll still be responsible for paying on your electricity bill post-solar. Many companies will also have sample electric bills for you to take a look at and see net metering credits in action.





Don



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