The Sol SOURCE is a monthly journal that our team distributes to our network of clients and solar stakeholders. Our newsletter contains trends and observations gained through monthly interviews with our team, and it incorporates news from a variety of industry resources.y
Massachusetts – If it seems like we write about Massachusetts a lot, it’s because we do. The transition from the Massachusetts SREC II regime to the new SMART program is one of the most closely followed policies in the industry. Since we last covered the transition, the Massachusetts Department of Energy Resources (DOER) released updates to the storage guidelines and further amendments to the Statement of Qualification Reservation Period Guideline that aimed to provide clarity on the adder for community solar+storage. Comments on each of these updates were due as of July 27th, and final versions were released last week. The finished versions kept in line with industry expectations.
There are still several key outstanding items that must be addressed before SMART kicks off. The state Department of Public Utilities (DPU) still needs to issue an order on the model tariff, which could come in the next few weeks. Following that order, electric distribution companies (EDCs) will need to file their compliance tariffs. From the DPUs order, the industry is waiting on clarification on several SMART Tariff Incentive items and Alternative On-Bill Credit issues.
With all of this work still to be done, it will likely be a month of two before DOER will be able to open the SMART program, with an effective date likely in the fall. No matter when it comes, the solar industry is ready to dive in, and few will be surprised if initial tranches fill up within the first few days. Massachusetts’ continued collaboration with stakeholders has led to a program that will continue to incentivize solar in the Commonwealth and keep the state, which has the sixth most solar installations, moving up the ranks. For customers that would like clarity on any recent updates in the program, shoot us an email at email@example.com. We are happy to answer any questions.
New York – Early last month, the New York Department of Public Service issued proposals for changes to the Value of Distributed Energy Resources (VDER), the state’s alternative to net metering aimed at more accurately pricing electricity sold back to the grid. While VDER intended to create a nuanced solution to the net metering debate, the complex five-layer value stack has arguably created more confusion than clarity.
One layer – the Demand Resource Value (DRV), which calculates the distribution costs offset by the resource averaged across the utility’s territory, has received criticism for calculating compensation based on a DER’s performance during the year’s top 10 load hours, which is considered insufficient data by solar stakeholders. Among other changes to the DRV, the state proposed an alternative that would calculate compensation based on 460 peak summer hours, providing more certainty for developers who were afraid of their projects’ vulnerabilities to small, idiosyncratic factors when only looking at 10 peak hours. The proposals offer additional fixes to the VDER, each representing a specific fix to one of the many small holes the state is looking to plug, which were bound to open in such a complex valuation.
These proposals follow the June re-design of the state’s Megawatt Block incentive program. The new-look program is looking to avoid issues that plagued the last version, such as overly-lenient requirements on project maturity that resulted in many projects accepted into the block but few getting built, by tightening up requirements.
California – On September 10, California officially signed a 100 percent clean energy goal to be met by 2045, a groundbreaking bill for a state that is showing yet again why it is the undisputed leader in clean energy. The state becomes the second behind Hawaii to set a 100 percent goal to be reached by 2045 (Massachusetts signed a bill in August that will effectively require 100 percent renewables by 2090), and the most ambitious in terms of scale. The bill also accelerates the state’s renewable portfolio standard (RPS) to 60 percent by 2030, a move that could generate an estimated 10 GW of additional solar demand over the next 12 years. Introduced in January of 2017 and passed by the state senate last year, the bill endured a long-fought battle in the state assembly against often-heard anti-RPS arguments of raised costs for consumers.
Although the bill passed and signed by Governor Jerry Brown, another bill aimed at expanding California’s grid to other western states and regionalize the governance of CAISO, the state’s grid operator, failed. The bill AB 813, was looked at through two different lenses by environmental groups. On one end, supporters felt that the bill would allow access to more renewables in different states, and by increasing competition, consumers would see cost reductions. However, detractors felt the bill could reduce in-state renewable investment, as well as provide coal plants with another avenue to provide power when they would otherwise be forced to close. The bill split groups like the state’s Environmental Defense Fund and the Sierra Club, who typically fight on the same side. The bill is the third in three years to propose an expansion to the grid, failing each time.
- Facebook, who passed its goal of powering 50 percent of its operations with renewable energy last year, announced their commitment to reaching 100 percent by 2020. The corporate giant looks to join Apple and Google, who have already reached the goal. To date in 2018, corporates have already purchased a record 3.86 gigawatts of renewable energy.
- In an effort to fuel the long-dormant Ohio solar market, prominent companies with Ohio operations including Walmart, JPMorgan, Whirlpool and Eaton, lent their support to a report by Powering Ohio that calls for 2.2 GW of solar in the state by 2030. The state, which currently has 176MW of installed solar, has seen little solar development since the state’s RPS was suspended in 2014. Though it has since resumed, the meager renewable energy goal of 12.5 percent by 2027 has led to little solar growth. Despite the widespread public support for renewable energy in Ohio, we do not expect a drastic change in the state’s renewable energy goals unless drastic changes happen in the November elections. Governor Kasich, seeing the economic benefits of renewable energy for his state, has defended the legislature’s constant attacks on the state’s already weak renewable energy goals.
- Clearway Energy Group, a Global Infrastructure Partners-formed company comprised largely of what was NRG Renewables, bought 4.7 GW of utility-scale solar from SunPower, who is turning its focus primarily to their residential solar operations. The deal, which totaled over $1 billion, serves as an example of the tough realities faced by similar firms in the post-tariff, utility-scale market.
- We finally got a piece of the pie! Solar now represents at least 10 percent of electricity generation in five states, a feat reached when Massachusetts reported solar made up 12 percent of its generation in the first half of the year. As is no surprise, California leads the pack with 19 percent of its energy being produced by the sun.
ABOUT SOL SYSTEMS
Sol Systems, a national solar finance and development firm, delivers sophisticated, customized services for institutional, corporate, and municipal customers. Sol is employee-owned, and has been profitable since inception in 2008. Sol is backed by Sempra Energy, a $25+ billion energy company.
Over the last ten years, Sol Systems has delivered 700 MW of solar projects for Fortune 100 companies, municipalities, universities, churches, and small businesses. Sol now manages over $650 million in solar energy assets for utilities, banks, and Fortune 500 companies.
Inc. 5000 recognized Sol Systems in its annual list of the nation’s fastest-growing private companies for four consecutive years. For more information, please visit www.solsystems.com