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Senate Solar Subsidy Could Add $600 Million to Electric Bills

Posted by Robert Rio on Jul 27, 2015 7:35:47 AM

The state Senate last week passed on a voice vote with little debate a solar-energy subsidy that could add as much as $600 million to the electric bills of Massachusetts consumers, businesses and institutions.

solarpanels.smallApproval of an amendment doubling the scope of state subsidies for solar power will leave consumers with a total tab of $4 billion by 2020. The amendment contained none of the ratepayer protections advocated by AIM and others.

The measure now goes to the House of Representatives as part of a larger bill that would require virtually all permitting and financial decisions by the state to conform to a still-vague plan to adapt to climate change.

Associated Industries of Massachusetts opposes increasing the solar subsidy because virtually all the savings (except for wholesale fuel costs) attributable to solar installations are basically a transfer from non-participating ratepayers to those who have solar, increasing costs for those who may not be able to take advantage of solar programs.

AIM supports instead the creation of new policies that continue to promote the expansion of solar energy in Massachusetts without forcing non-solar customers to subsidize millions of dollars in profits for developers.

“It is unconscionable for lawmakers to take money from low-income homeowners and small businesses that already pay the highest electric rates in the country and put it in the pockets of solar developers,” said John Regan, Executive Vice President of Government Affairs at AIM.

The cost of solar subsidies in Massachusetts is almost twice the level in neighboring states. AIM and others, as part of a task force established by the Legislature last year, advocated reforming the current program and bringing costs into line with other states before expanding the program.

We believe:

  • Reducing the cost of solar programs and electricity should be the priority.
  • Competition in solar procurement will drive down costs.
  • Those who are still “Connected” to the grid must pay their fair share of maintaining the grid that they in fact rely upon. 
  • There should be no grandfathering of the current program when a new program is enacted.
  • The current net metering cap should not be increased until a new solar program is developed that is cost-effective and sustainable. 

All these increases have come at a time when Massachusetts pays the highest electric rates in nation because of past bad policy decisions. According to the US Energy Information Administration (EIA), an arm of the Department of Energy, residential rates in April were the second highest in the continental US, just a fraction of a cent below Connecticut and nearly double North Carolina.

Comparing the data to the same time last year, residential electric rates in Massachusetts have increased 23 percent while the national average has inched up only 2.7 percent.

In the Commercial and Industrial sector, rates increased 10 percent relative to last year, while the average national rate for these sectors declined.

Topics: Massachusetts economy, Energy

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