Scrap the Back-Room Solar Subsidy

Posted by Bob Rio on Jun 23, 2014 6:30:00 AM

How did your neighbor afford to install the array of solar panels now sitting on his roof?

solarpanels.smallSimple - you paid for some of it.

And you may soon pay more for it because of a back-room deal hatched by solar panel providers and other special interests on Beacon Hill.

The House Ways and Means Committee is debating a proposed revamp of the state’s expensive solar subsidy program that would add an estimated $1.5 billion to the electric bills of employers and consumers during the next 15 years.

The bill was developed behind closed doors by state officials and organizations with a vested interest in keeping the program as lucrative as possible, including solar and clean-energy lobbyists and at least one solar installation company. Associated Industries of Massachusetts (AIM) and other advocates for electric ratepayers were excluded.

AIM enthusiastically supports the use of solar power in the Bay State, but opposes the current proposal to lift the existing cap on the subsidy, or net metering, program in specific utility territories. The rate shock caused by the measure will place a damper on the economy by increasing costs for the commercial and industrial ratepayers who currently foot 40 percent of all electricity costs in Massachusetts.

The association, in a letter sent last week to the Ways and Means Committee, urges the panel to direct the Massachusetts Department of Energy Resources (DOER) to initiate a new and transparent discussion of solar net metering with realistic timelines, realistic goals and a multitude of options, including a cap on the yearly cost of the program. The objective should be to advance renewable power while simultaneously reducing overly generous subsidies to this industry.

Net metering allows customers to receive credits to their electric bill for generating solar power.

“Net metering benefits only those who are able to install solar panels on their roofs or have some access to community solar programs. It largely excludes low-income people, renters and small businesses that do not have the appropriate land area for solar,” said John Regan, Executive Vice President of Government Affairs at AIM.

“The result is that the ‘have-nots’ will subsidize those who have the means to install these panels, a wealth transfer amounting to billions of dollars. As the program gets larger, the subsidies get larger, creating a never-ending escalation of costs to those left on the system still paying the bill

The bill would also replace a second subsidy program that establishes a market for solar energy certificates sold to utilities so they meet their renewable energy mandates, with an electricity tariff program designed to get as much as 1,600 megawatts of solar developments built in the state.

AIM’s objections to the current bill include:

  1. The troubling, non-collaborative approach that deliberately excluded interested parties from the development of the new draft.
  2. Lack of disclosure concerning the cost of the program to ratepayers.
  3. Language that eliminates oversight by the Legislature.
  4. Unclear need for the legislation.

The secretive negotiations that produced the current bill have made it nearly impossible for AIM and other organizations representing the interests of ratepayers to estimate the final cost of the expanded subsidy program. Negotiators refused to discuss the cost of the program at an informational meeting on June 11 in Boston and dismissed a question from the audience on this topic as irrelevant.

And financial data is not the only evidence missing from the proposal. The solar subsidy has often been touted as necessary to reach greenhouse gas-reduction goals, but there was no indication at the informational meeting or in the supporting documents as to the amount of greenhouse gases that would be reduced by this program or the cost per ton of greenhouse gases reduced.

“A rush to pass this legislation will touch off a firestorm of criticism from a business community forced to pick up the tab for a poorly conceived and economically destructive program.   The Legislature is being handed in the hectic final days of the session a costly measure that will set energy policy for decades to come with no protections for ratepayers,” AIM said in its letter to the committee.


Topics: Massachusetts House of Representatives, Energy, Subsidy

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