Net Metering in Massachusetts

Net metering in Massachusetts often flies under the radar but it plays a crucial role in the economics of solar power. Its value lies in tracking electricity movement between your home and the grid. Net metering can make or break a solar project’s investment potential.

Fortunately for Cape Cod homeowners, Massachusetts stands out for its particularly generous net metering provisions, which helps to explain why the far-from-sunny Baystate has some of the highest solar adoption rates in the country. 

But this may be about to change as concerns rise about the fairness of offering big subsidies to already-affluent homeowners at the expense of people who live in condos, apartments or other rented accommodation. 

Across America, formerly solar-friendly states like California are reconsidering their net metering policies. Will Massachusetts follow their lead?

In this article, we’ll explain how net metering in Massachusetts works and what impact it’s likely to have on your Cape Cod solar project.. We’ll also look ahead at how potential changes to  Massachusetts’ net metering program might affect your home’s ability to go solar in the future.

What is Net Metering?

With an intermittent electricity source like solar, there are always going to be times when a home either generates less power than it needs, or excess power that it needs to dispose of. The most likely time is from late afternoon to evening when electricity consumption peaks but dwindling sunlight means little to no generation from your solar panels. 

A similar disparity also aoccurs seasonally with more output in summer than winter.

To reconcile this supply-demand mismatch, solar panels are designed to feed excess power back into the grid when the system over produces and draw power from the grid whenever the system cannot produce all the electricity that the house needs. 

So for solar customers, the grid acts like a massive battery that can store surplus energy for later use, with er when the sun goes down or or the skies get cloudy.

To measure this exchange of electrons, solar homes are fitted with a special meter that monitors how much power the house uses, just like any normal meter does. But it also measures how much electricity the home feeds back to the grid.

It is the difference between these two amounts that the customer gets billed for at the end of the month, which is why it’s called “net metering”.

The specifics of how a customer gets paid for this surplus energy, including the rate and terms, are all detailed in a Net Metering Agreement. This agreement is signed between the customer and their utility company before the customer can get approval to go solar.

The Evolution of Net Metering in Massachusetts

Massachusetts has consistently been at the forefront of solar energy adoption, ranking among the top ten states nationally. This has been fueled largely by five decades of forward-thinking policies that encourage homeowners to go solar.

The initial tax incentives to back renewable energy in Massachusetts were launched following the 1973 Arab oil embargo. The state initiated its first net metering program in 1981 when Congress enacted the Public Utilities Regulatory Policy Act (PURPA) of 1978. This act mandated utilities for the first time to:

• Connect qualifying solar systems to the grid
• Purchase excess electricity generated by these systems
• Supply power during periods when customer-owned solar units could not meet their needs

Although all US states had to abide by these new rules, Massachusetts took an important extra step: The Department of Public Utilities (DPU) stipulated that Massachusetts’ three main utility companies must buy surplus power from solar sources at full retail rates (i.e. one kWh credit for every kWh fed back to the grid). 

This decision had an enormous positive influence on the rate of solar adoption in Massachusetts for decades to come.

Net metering benefits were then broadened further during a comprehensive restructure of Massachusetts’ energy sector in the ’90s, and were expanded yet again when the Green Communities Act was passed into law in 2008. 

Today, customers with surplus power can sell it back into the grid at full retail prices while also having leftover credits rolled over each month, or transferred to different properties. All of this has strongly motivated Baystaters to embrace solar and encouraged dozens of Massachusetts solar companies to set up shop in the Commonwealth to meet the demand.

Rules for Net Metering in Massachusetts

Solar customers in Massachusetts, including Cape Cod customers served by Eversource, can benefit from net metering when their systems generate excess electricity. For residential units, customers are awarded a 1-for-1 credit for every kilowatt-hour returned to the grid as long as their overall system size doesn’t exceed 15 kW. Systems larger than this limit still qualify for net metering but receive reimbursements at rates reduced by 40%.

Net metering credits can be used not only to offset both delivery and supply portions of an electric bill but also wipe out customer charges completely. These credits don’t expire; they can accumulate over months or even years.

What’s more, it’s possible to transfer net metering credits between properties using a Schedule Z form provided that both properties fall under the same utility territory jurisdiction. 

Homeowners should contact the local utility provider for current information regarding any restrictions on this policy.

Other Articles You Might Like:

• Do Solar Panels Work in Winter?
• Selling a Home With Solar Panels

The Future of Net Metering in Massachusetts

The future may bring changes to net metering in Massachusetts. While these rules have served as a catalyst for solar adoption over the years, some believe that the benefits of solar are so clear and obvious now that such incentives no longer needed. 

In fact, some critics believe that Massachusetts’ net metering practices are unfair since they exclude those who don’t own their homes. Renters can’t utilize net metering yet contribute towards maintaining infrastructure costs through their electricity bills—costs that many solar customers are able to avoid paying.

This was exactly the point made by proponents advocating change in California. After two years of deliberation, the Department of Public Utilities (DPU) recently decided to reduce net metering credits down to just 25% (meaning four kWh must be fed back into the grid for a one kWh credit). 

Although this decision hasn’t sat well with solar companies and homeowners, some industry experts anticipate it could stimulate an upsurge in batteries and other home storage solutions.

In essence, if utility companies won’t compensate at fair market rates for surplus power generated by a solar system, perhaps homeowners would find greater value storing it themselves.

Net metering in Massachusetts has played a pivotal role in promoting solar energy adoption statewide by offering customers generous credits for any electricity they feed back into the grid. But in future, the Baystate may follow states like California in scaling back net metering credits for homeowners in favor of different incentive programs aimed at less affluent utility customers.

Regardless of future changes, there’s no denying that net metering has significantly contributed to the expansion of solar energy on Cape Cod and throughout Massachusetts and will continue to do so for as long as the current rules remain in place.

The specifics of how a customer gets paid for this surplus energy, including the rate and terms, are all detailed in a Net Metering Agreement. This agreement is signed between the customer and their utility company before the customer can get approval to go solar.

To measure this exchange of electrons, solar homes are fitted with a special meter that monitors how much power the house uses, just like any normal meter does. But it also measures how much electricity the home feeds back to the grid.

If you’d like more information on how the Net Metering program could help you save money going solar, you can schedule a no-pressure chat with either of the Cape Cod Solar Guys here.

Massachusetts Solar Financing – Back to Home