The new order provides equitable access to solar energy and affordability to low-income and environmental justice populations
FOR IMMEDIATE RELEASE:
6/04/2024
Department of Public Utilities
Electric Power Division
BOSTON — Today, the Massachusetts Department of Public Utilities (DPU) issued an order on the Phase II regulations for the state’s Solar Massachusetts Renewable Target (SMART) Program. The order updates the SMART Program to bolster the state’s ability to reach its 2030 and 2050 Clean Energy and Climate Plan Goals, and, most importantly, increases access to SMART for low-income and environmental justice populations through new community solar programs.
The announcement of the DPU’s new order comes after the Healey-Driscoll Administration was awarded $156 million for Massachusetts Solar for All program, which will deploy 125 megawatts of solar capacity and provide a 20 percent reduction in energy costs to more than 31,000 low-income and disadvantaged households.
This order approves several mechanisms that improve low-income customers’ ability to benefit from the SMART Program, including Low-Income Community Shared Solar (LICSS) programs offered by utilities and through approved municipal aggregation plans. The SMART Program, which was implemented by DOER in 2018 and is still overseen by the agency, is the state’s primary program to establish and support the development of solar energy in Massachusetts.
“With the issuance of the SMART Phase II order, Massachusetts can continue to serve as a leader on solar while keeping equity at the forefront,” said Chair James Van Nostrand. “LICSS is a revolutionary program that provides the tangible benefits of clean renewable energy at lower costs for communities that bear a disproportionate impact from climate change.”
“The changes to the SMART Program outlined in the Department’s Order are important to advancing the Commonwealth’s clean energy goals.” said Commissioner Cecile Fraser. “With this order, more low-income customers will be able to share in solar’s benefits as we drive down emissions and improve reliability.”
“The SMART Program changes approved in this order should help low-income customers benefit from community shared solar programs and support further growth for the Massachusetts solar industry,” said Commissioner Staci Rubin. “The Department’s directives to electric distribution companies regarding the cashout rate for solar generation should also demonstrate the important value of solar generation for Massachusetts residents and workers.”
Barriers affecting low-income customers from participating in the SMART Program include lack of capital or the ability to qualify for financing to directly invest in a renewable energy project, perceived credit risks of serving low-income customers, and challenges developers face in identifying low-income households to participate, including higher customer acquisition costs.
Many low-income customers are residents of environmental justice areas that have limited access to renewable energy resources while bearing the brunt of health impacts from emissions. DOER analyzed its existing data and found that those who qualified for low-income eligible rates made-up only 2.5 percent of the entire SMART capacity.
With the greenlighting of LICSS programs to operate throughout Massachusetts, low-income customer participation in generating renewable energy can substantially increase and in the process help lower electricity bills.
Low-Income Community Shared Solar (LICSS)
Eversource customers are able to take advantage of the utility’s LICSS program approved by the DPU in this order. The Eversource Community Solar Access Program (ECSAP) includes a simplified billing offering at no cost and an easy enrollment plan to encourage more low-income customer participation. In its filings, Eversource detailed that the ECSAP includes a target of $420 in annual bill savings for each low-income customer enrolled, which totals more than $300 million in direct benefits to low-income customers over the lifetime of the program.
The Department reviewed National Grid’s LICSS, the Solar Access Initiative (SAI), during the SMART II proceeding and found areas that the EDC could further improve its plan. The order directs the utility to revise its SAI plan to incorporate streamlined and simplified billing, credit, and enrollment structures that will be evaluated in a new proceeding. National Grid’s success in implementing a similar LICSS in New York demonstrates the EDC is well-positioned to implement a successful LICSS program for its service territory for Massachusetts.
Municipal Aggregation and LICSS
Direct benefits for low-income customers are now more obtainable. The updated SMART regulations allow new alternative programs for LICSS and community shared solar within municipal aggregation plans, providing more benefits to low-income customers by granting a discounted rate or credit on their energy bills. Previously, communities that had DPU-approved municipal aggregation programs could not offer LICSS or community shared solar programs.
Several municipalities indicated their desire to append their municipal aggregation plans to establish LICSS programs for constituents. The Department will review LICSS program designs for Boston, Chelsea, Newton, and the municipalities operating collectively as Cape Light Compact, and other communities who seek to offer LICSS in a different docket, with the goal of further providing equitable access to clean energy and affordability for low-income communities. In its investigation to establish municipal aggregation guidelines, docket #23-67, the DPU will approach the approval and implementation of LICSS within municipal aggregation plans.
Customers opting into a LICSS under a municipal aggregation plan will save $5-10 each month on the program. These alternative LICSS programs are also eligible to receive funding through SMART.
Customers interested in applying to SMART are able to sign up for more than one LICSS program providing more flexibility and rewards.
Further Updates to SMART
The new DPU order addresses the of Alternative On-Bill Credit (AOBC) used between solar facility owners and the EDCs. Any solar generation unit that was in operation on or after January 1, 2021, is able to receive a cash out for unused alternative on-bill credits. There are currently 323 solar facilities under SMART that will now be able to receive this cashout. The cashout rate will be consistent with the rate in which the credits were generated.
Additionally, the order approves rebates for solar developers wishing to use pollinator adders. Pollinator-friendly solar developments help to expand and enhance the pollinator habitats across the state, improving the health of both residents and our crucial pollinator population. Pollinating animals, like bees and butterflies, help sustain our ecosystems and produce our natural resources, but their numbers declined in recent years. The approval for the use of pollinator-friendly facilities will help to provide renewable energy with additional benefits to Massachusetts residents and promote efforts to increase pollinator populations.
To enhance the development and deployment of energy storage systems (ESS) in Massachusetts, the DPU chose not to limit the charging periods for solar facilities with ESS. The use of solar-ESS facilities is a significant tool that can maximize the direct and indirect benefits to ratepayers while getting Massachusetts closer to its energy and climate goals. The Energy Storage Initiative, which was launched in 2015, is the state’s program to advance ESS by attracting, supporting and promoting storage companies and the development of commercial storage technologies throughout the Commonwealth. Massachusetts has a current ESS goal of 1,000 MWh by December 31, 2025. As of February 15, 2024, the EDCs reported 569 MWh of installed energy storage with an additional 8,806 MWh of storage under development.
The DPU established a two-pronged approach to address a multitude of revisions of the SMART program that would be handled on concurrent tracks: while the Phase I investigation was conducted, DPU began the second phase of its investigation. The SMART Phase I order allowed the increase of the program expansion from 1600 MW to 3200 MW and added new definitions to the program, amongst other revisions. The Phase II order is the culmination of a robust proceeding that included evidentiary hearings, several requests for information from interested parties, and various comments from municipalities, trade associations, solar developers, energy suppliers, and more.
About the SMART Program
The Solar Massachusetts Renewable Target (SMART) Program is DOER’s incentive program established to support the development of solar in Massachusetts. The DOER regulation in 225 CMR 20.00 sets the regulatory framework for the program. The tariff-based incentive is paid directly by the utility company to the system owner, following the approval of the application by the Solar Program Administrator and DOER.
The SMART Program is a 3,200 MW declining block incentive program. Eligible projects must be interconnected by one of three investor-owned utility companies in Massachusetts: Eversource, National Grid, and Unitil. Each utility has established blocks that decline in incentive rates between each block.