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Archive for the ‘Net Metering’ Category

On April 18, 2013 Cadmus staff attended the American Solar Energy Society (ASES) conference in Baltimore, MD. Featured at the conference was a panel discussion of net metering and new finance and policy approaches. Cadmus associate, Erin Sweet, was one of three panelists in this session. Her presentation, entitled “The System of Assurance of Net Metering Eligibility: Early Experiences and Lessons Learned,” drew from Cadmus’ experiences as the developer and administrator of the Massachusetts’ System of Assurance, commonly called the “net metering queue.” Ms. Sweet highlighted distributed generation stakeholders’ historic concerns regarding the availability of net metering services at the time of a project’s interconnection and how 2012 Massachusetts regulations help increase transparency and investor confidence.

Cadmus’ Erin Sweet on the Net Metering and New Finance and Policy Approaches panel at ASES’ Solar 2013

Cadmus’ Erin Sweet on the Net Metering and New Finance and Policy Approaches panel at ASES’ Solar 2013

Working collaboratively with DG stakeholders, the Massachusetts Department of Public Utilities’ (DPU) developed the System of Assurance of Net Metering Eligibility. This net metering queue ensures that businesses, communities, and other entities developing these facilities will be eligible for net metering services when their projects are complete, assuming they can meet and maintain certain requirements. This web-based application system is now located at www.MassACA.org.
This unique system represents a means to smoothly and efficiently approach a cap on an important incentive. Following the presentation, conference attendees shared positive feedback on the Commonwealth’s approach, and speculated on the applicability of such a system to other, similar capped incentive programs. With 43 states in the U.S. having already established some form of net metering, it may not be long until stakeholders in other states are looking for certainty that their project will receive this important incentive; and the System of Assurance provides a window into one state’s solution.

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The Northeast Sustainable Energy Association (NESEA) and Renewable Sales held a Building Energy-caliber session at Renewable Sales’ showroom at 35 Jeffrey Avenue in Holliston, MA on February 16, 2012.

The evening featured networking in the Renewable Sales showroom followed by a discussion facilitated by The Cadmus Group about Massachusetts municipal solar PPA projects. Meg Lusardi, Director of the Green Communities Division of the Department of Energy Resources (DOER), spoke to the Department’s support for community scale renewable energy and outlined DOER resources available to Massachusetts municipalities. The panel featured case studies from the City of Medford and Town of Natick –two of the communities that receive technical assistance services from Cadmus. Cadmus spoke to best practices and lessons learned from our efforts working with local cities and towns on their renewable energy projects. We also reviewed how developers and vendors can apply these lessons when doing business with Massachusetts cities and towns.

Read more about the February NESEA/Renewable Sales event at Medford’s blog, The Medford Patch

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In a typical solar power purchase agreement (PPA), a community hosts solar PV on public rooftops or land and enters into a long-term contract for the purchase of electricity from the PV system(s). This third-party ownership model is the most common way in which Massachusetts communities procure solar PV systems (as opposed to outright ownership, for example).  While 2010 and 2011 saw a significant number of public solar PPA projects in the state, interest from solar developers has slowed in recent months. As a result, those communities just releasing RFPs for their solar project or reviewing bids from a recent solicitation may not see as many responses or as attractive prices as their predecessors, leaving many to wonder –what is going on in the Massachusetts community solar market?

Concern over Renewable Energy Incentives

Solar Renewable Energy Credits (SRECs) generated by PV systems (which communities typically give over to solar developers in PPAs) are an important revenue stream in a developer’s financial model for a PV project. Due to recent analyses of and concerns about the state’s SREC market, some developers are struggling to secure SREC contracts at sufficient prices. Without adequate SREC contracts, developers cannot offer attractive PPA rates to communities. Many solar developers active in Massachusetts have slowed or stopped activity in the state.

What does that mean for my community’s hopes for a solar PPA project?

Some developers and analysts believe that Massachusetts SREC prices will recover in six to nine months and that the pace of development will pick up again at this time. In the interim, communities may not see as much interest from the development community or receive attractive PPA rates (e.g., less than 10 cents) on proposed projects.

In order to take advantage of federal incentives that apply to solar projects developed in 2012, community solar project teams should use this period to prepare for a summer 2012 RFP (or RFQ) release, should the SREC market turn around at that time. Proactive teams can use online tools such as the National Renewable Energy Lab’s In My Backyard tool or PVWatts for preliminary resource assessments and to narrow down potential project sites. Using the results of these analyses, as well as details about the sites, solar project teams should begin preparing language for a RFP or RFQ. If more detailed site assessments are conducted, finding should also be included in the RFP.

If and when Massachusetts SREC market projections improve, the most proactive project teams will be first in line to do business with an eager solar industry.

What if we are currently negotiating a solar PPA?

Local officials and staff in Massachusetts are constantly contacted by interested solar developers. If your community is executing a PPA project at this time, be sure to get as much information as possible as possible about the SREC assumptions used in the developer’s financial model for your project. If a developer assumes more than $285 per megawatt-hour (28.5 cents per kilowatt-hour) for 10 years worth of SRECs, tread cautiously. Make sure that your PPA does not contain, for example, a “Change in Law” provision that allows the developer to renegotiate the PPA price with you during the contract term if their SREC assumptions do not hold (e.g., if the assumptions about SRECs used to price your project were out of date or overly optimistic). Also, if the solar developer will use SREC brokers to sell the SRECs from your project, encourage them to get regular updates from their brokers on available SREC contracts.

 

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When planning a ground mounted PV system (vs. a roof mount), there are several environmental considerations to evaluate prior to entering a PPA.  The overall size of system, landfill or Brownfield location options, wetland areas, and endangered species are all issues to assess when evaluating sites for PV arrays.  While the solar developer’s engineering team typically has the resources to complete all required environmental permitting, a savvy property owner or municipal committee will want to know “fatal flaws” and/or anticipated permit requirements in advance of committing to the project. Understanding potential environmental challenges ahead of time allows for realistic cost and project timeline planning. The site owner should also confirm that the solar developer has a qualified and experienced permitting team on board.

Site Characteristics

As part of a fatal flaws or feasibility analysis, site characteristics should always be considered. Site characteristics that should always be included in any analysis include ground slope, topographic features, access to the site, path to potential interconnection point(s), existing vegetation, erosion potential and soil type. Analysis of environmental features along possible interconnection routes should be considered in addition to the array site itself.

Local Requirements

Do some research on property boundaries and easements, available mapping (wetlands, topographic, utility, endangered species), local by-laws (zoning, planning, and conservation).  Information obtained from the local conservation office, Town or City Engineer, or zoning office can be included in an RFP or made available for review prior to bid.

 State Requirements

A state environmental review (ie. Massachusetts Environmental Policy Act http://www.env.state.ma.us/mepa/ (MEPA)) may be required if the project meets a State’s “threshold” for review.  State thresholds should be checked to see if any project characteristics exceed the threshold.  If they do, a regulatory review may be required and possibly add 30-60 days minimum to the project timeline.  Most states maintain a free online database of environmental resources/protected areas, historic resources and hazardous waste or Brownfields sites.

For example, if the site is a landfill, the landfill must be closed, capped and in full compliance with State regulations.  A Post-Closure landfill use permit is likely required.  Talk to your state Department of Environmental Protection (ie. NHDES, MADEP).  Permits for post-closure landfill use can take 2-6 months.

Federal Requirements

A federal environmental review (National Environmental Policy Act http://www.epa.gov/oecaerth/basics/nepa.html (NEPA)) may be required if federal money is involved or if the project meets a federal threshold for review. As with state regulations, if any project characteristics exceed federal thresholds, they may trigger a regulatory review that will add to the project timeline.

Any site with over one acre of total land disturbance requires a National Pollutant Discharge Elimination System (NPDES) permit for erosion andstormwater pollution prevention. Easier than it sounds, this is a simple document that can be filed electronically and does not delay a project. Best practices, such as using silt fences or haybales around any open excavated areas, should be utilized.

Drafting a Request For Proposals (RFP)

Give the solar developer as much relevant information from your research as possible in the RFP, or provide a list of available resources to examine.  The more information the bidder has about environmental considerations, the more competitive and accurate the bid outcome can be.

Summary

An owner’s agent can assist in identifying potential feasibility issues and evaluate proposals for a PV system.   Factors to evaluate for a ground mounted system are different from a roof mounted system and include environmental considerations.  Proper planning and knowing what to expect help make the bid and project phases go smoothly.

 

 

Guest Blogger:            Maureen Sakakeeny, P.E., LEED AP

Principal

SAK Environmental

 

About SAK Environmental LLC:

SAK Environmental specializes in environmental permitting and compliance, sustainable development, and Brownfields assessment and remediation, and environmental support during construction, throughout Massachusetts and Southern New Hampshire.  Our goal is to deliver technically sound advice and practical solutions enabling our clients to carry out their initiatives with confidence and peace of mind.  We strive to promote sustainable development and environmentally compatible business practices to allow business, industry and community to thrive. SAK Environmental is a privately owned environmental consulting business founded in 2003 and based in North Andover, Massachusetts.   For more information about SAK Environmental LLC, please visit www.sakenvironmental.com.

 

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 DOER filed a report with the Massachusetts Department of Public Utilities outlining recommendations for utilities to improve the process of connecting new renewable energy generation installations to the electric grid. In its filing, DOER attached the Massachusetts Distributed Generation Interconnection Report which surveyed customers seeking interconnection in the state, researched policies in other states, interviewed utilities, and made specific recommendations about improving interconnection processes and policies.

The status of progress on these issues and scheduling for distributed generation (DG) workshops is available at the Massachusetts DG and Interconnection Website (http://bit.ly/MADGIC).

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 Many communities interested in renewable energy have questions and concerns about net metering and interconnection. This is particularly true among communities exploring landfill solar or community wind projects, which are largely dependent on the Massachusetts net metering incentive.

DOER has succeeded in getting a commitment from the Massachusetts utilities to host monthly distributed (on-site) generation workshops. These workshops will cover the basics of interconnecting distributed generation technologies in investor-owned utility territories in Massachusetts as well as other pertinent distributed generation topics, including net metering. The DOER’s Massachusetts Distributed Generation and Interconnection Main Page has more information about upcoming workshops, as well as links to presentation materials from past events. In addition, the DOER DG site provides additional resources on these topics, including the “Basics of Interconnection and Net Metering.”

See http://bit.ly/MADGIC.

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