A proposal would shrink state subsidies for solar developments on previously undeveloped “greenfield” sites.
As Massachusetts begins to update its solar subsidy program, there is disagreement on what kind of project sites the state should incentivize.
At issue is whether the state should discourage construction of larger projects on previously undeveloped land, commonly called “greenfields,” and instead promote projects on urban rooftops or brownfield.
Some solar developers argue that proposed changes to penalize greenfield development will make it all but impossible to find sites to serve large groups of customers. Others say it’s important to help preserve open spaces and ensure solar’s benefits reach lower-income, urban communities.
“A big part of the proposal is aimed at further limiting the amount of solar going into greenfields,” said Sean Garren, a senior director with renewable energy advocacy group Vote Solar. “That will definitely be at the center of the debate for the next few months.”
The Solar Massachusetts Renewable Target (SMART) Program launched in November 2018, replacing an earlier incentive system. SMART pays the owners of solar installations a set rate for each kilowatt-hour of energy generated. A base rate is determined by the utility territory a project is located in, the size of the project, and when the application was filed. In each territory, the first 200 megawatts of capacity in the program receive the highest price; the rate drops every time another 200 megawatts is approved. The original program was designed to subsidize 1,600 megawatts of capacity.
Projects that include features the state hopes to encourage — those that serve low-income residents or include energy storage components, for example — can earn a few extra cents per kilowatt-hour. Larger installations built on greenfield are subject to a “subtractor,” losing a fraction of a cent per kilowatt-hour.
The state is currently undertaking a legally required review of the program intended to ensure it is functioning as effectively as possible. After four months of listening to feedback, the state energy department released its proposed changes to SMART in early September.
The recommended modifications include an expansion of the program by 800 megawatts, changes to how low-income consumers are defined, and a new requirement that all larger installations include energy storage components.
But one of the recommended tweaks sparking the most concern is a proposal to increase the greenfield subtractor rate by a factor of five in an effort to ensure solar development doesn’t encroach too far into land that may have conservation value. The rate is currently 0.0005 cents or 0.001 cents per kilowatt-hour per acre, depending on the details of the plot; it would change to 0.0025 cents or 0.005 cents if approved.
Though the numbers may seem small, the change could be enough to render future large greenfield developments financially unfeasible, said some in the industry. And without the ability to do large installations, community solar projects — bigger developments that serve a group of smaller households or businesses — will be all but impossible, said some.
“You’re basically going to shut down all community solar in Massachusetts,” said Ilan Gutherz, vice president of policy and strategy for Borrego Solar, one of the state’s leading renewable energy developers. “It’s going to mean a massive slowdown in development.”
The timeline of the intended rate change is also a serious concern, said David Gahl, northeast director of state affairs for the Solar Energy Industries Association. The proposal calls for the new numbers to go into effect as soon as the changes are approved, leaving projects that are already well along in the planning process on a whole new — and unexpected — financial playing field.
“A lot of projects have spent money already,” Gahl said. “To change to rules on them midstream is pretty problematic.”
If the change disrupts the development of major projects, Massachusetts will have a much harder time reaching its ambitious carbon reduction and clean energy goals, Gutherz said. The state has declared its intention to reduce carbon emissions 80% by 2050 and its renewable portfolio standard calls for the amount of renewable energy sold in the state to increase by one percentage point each year; the current requirement is 14%.
Yet, because Massachusetts has traditionally been a leader in solar adoption and incentives, the state has a relatively mature market, Gutherz said. Therefore, most of the easily accessible rooftops, landfills, and other previously used sites have already been developed, Gutherz said. Continued progress in solar adoption will require development of greenfields, he said.
“Most of the low-hanging fruit has been picked,” he said.
Others in the industry, however, disagree about the necessity of greenfield projects. With the right incentives in place, there are plenty of brownfields and rooftops that would be appropriate for solar development, said Ben Underwood, president of operations at Resonant Energy, a nonprofit solar energy provider focused on developing projects in underserved areas.
Policies that better promote solar development in urban and low-income areas would allow more residents to receive the benefits of local renewable energy, while still increasing adoption substantially, he said. He would like to see the rates for rooftop and parking canopy projects increase. He also wants a policy that properly incentivizes development in low-income neighborhoods.
“The policy has been so heavily slanted toward those large greenfield projects that it is not going to kill the solar industry to focus on using perfectly good roofs and perfectly good brownfields,” Underwood said.
Even among those who are eager to protect open spaces, there is also widespread concern that the greenfield subtractor, as currently formulated, may be too blunt an instrument for the nuanced task of balancing conservation and renewable energy needs. There is currently little data available about the scale of solar developments on open space and the conservation value of the affected land, said Heather Clish, director of conservation and recreation policy for the Appalachian Mountain Club.
“There doesn’t seem to be a very clear accounting for or even forecast of the greenfield acreage that has been impacted or would be impacted by the projects already proposed,” she said.
Some parcels of land subject to the subtractor may provide less ecological value and be good targets for solar sites, while others may have much greater conservation significance, Garren noted.
“We can do better about defining the lands we want to protect and provide developers with more concrete guidance,” he said.
Public comment is open on the proposed changes until Sept. 27. The department has stated its intention to file the regulations by mid-November and put the changes into effect by mid-February next year.