Slowing the Solar Revolution

Dan Von Kohorn
May 15, 2015 · 3 min read

Massachusetts “net metering” cap is halting new solar fields.

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I own an undeveloped lot in rural Massachusetts, abutting an old landfill. The landfill was covered with soil and, in 2012, was approved to be converted into a municipal solar field.

I want to do the same next door. I think every watt we can shift away from hydrocarbons is great.

But there is a problem. This area is served by National Grid, a company that reached its solar net-metering cap. I now join a crowd who collectively represent more than 10 megawatts of solar projects that are waiting, halted. The missing electricity would be enough to power 10,000 homes and prevent 40,000 tons of carbon per year. Oops.

Instead of being awash in low-cost electricity and revenues from selling renewable natural resources, towns like Orange are economically suffering.

Net metering caps are dumb

As it stands, utilities hate net metering because they have no profit margin and are stuck paying for infrastructure. This regulation is cruel to the utility companies and reduces capital available for reinvestment. It also creates a strange adversarial relationship with solar farmers exploiting utilities and utilities wanting to cap the growth of solar farms, resulting in a queue and slow growth.

A better system would define a rate split (maybe 80% of the retail rate for electricity would be paid to producers, for example). Then all the incentives would be aligned so utilities can cover infrastructure, maintain profits, and compete to recruit solar field owners to grow solar capacity together. Unfortunately, that’s just fantasy and we’re stuck with bad policy for now.

Maybe a merger to solve the short-term problem?

National Grid and Eversource could merge. Eversource serves more urban areas and is far from their net metering cap — a combined entity would serve a mix of rural and urban areas, sending power from rural solar farms into urban centers. This merger would not eliminate the need to invest in the electrical grid, but it fixes the problem with the cap.

Federal Support

The Federal Government has identified solar adoption a priority in the National interest — as part of freeing us from foreign oil and reducing carbon. They could get a big bang for their buck if they were to subsidize the upgrades to the substations and other electrical grid infrastructure. At the Federal level, simple financial support for infrastructure investment would leave the utilities and free markets to work their magic.

Long term trajectory

This is one of those cases where the future looks very different from the past and it’s hard to accept what is clearly coming. The cost of solar equipment is falling; efficiency is improving; battery technology is improving. All the trend lines point to a future where electricity generation is more distributed and the cost comes down. The states that enable this change will enjoy lower energy prices and stronger economic growth. It remains to be seen how Massachusetts will proceed.

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