Solar Changes Coming in 2017

Massachusetts continues to be an excellent place for new residential solar installations due to valuable federal and state financial incentives. However, the state incentives are changing in 2017. The SREC (solar renewable energy credit) program that has been in place in Massachusetts since 2010 will be phased out for new installations. Installations that already participate in either SREC-I or SREC-II will not be affected. The SREC program is being replaced with a solar tariff program (see below). The proposed incentive system addresses the high cost of administering the current SREC system and concerns that non-solar customers are subsidizing solar customers.

The Mass DOER (Department of Energy Resources) has set a deadline of Jan 8, 2017 for new systems to participate in the current SREC-II program. Projects that connect after this date, but before the tariff system is approved, will be allowed to participate in the SREC-II program, but SREC payments will be reduced. Each 1000 kWh of generated electricity will only earn 0.8 SRECs instead of 1 SREC, a reduction of 20% in the financial incentive provided under the pre-2017 SREC system.

The “Next Generation” solar incentive program was issued as a “straw proposal” on September 23, 2016, and can be reviewed on the Massachusetts government website. Once the new program is approved (expected in Q3, 2017), no new systems will be allowed into the SREC-II program. Instead, they will receive financial incentives through solar tariffs, where electric utilities will pay the producers of solar electricity a tariff based on the size and type of system and the category of the system owners. For small residential systems, the tariff payments will be available for the first 10 years of system ownership (same as the current SREC system). The tariff proposal creates a system where incentive payments will fall over time as the cost of electricity rises. Incentives will be better for low income system owners, and for systems that don’t use net metering.

Solar incentives will decrease in value in 2017, but purchasers of new solar systems will still enjoy many financial incentives to reduce the cost of ownership. There is likely to be a period of uncertainty until the proposed new incentive program is approved since the final tariff rates are still under discussion.

Craig Forman, Green Newton board member, has an interest in renewable energy.