Incentives Push Massachusetts Residents to Go Solar
May 20, 2013
To be green, sometimes you need to spend a little green. That’s the lesson Massachusetts officials have learned by enticing homeowners to invest in renewable energy through tax breaks, rebates and other economic incentives.
Since 1979, Massachusetts has offered a $1,000, one-time tax credit to homeowners who install solar systems, but that incentive didn’t exactly push residents to invest in these relatively costly systems.
What really drove the solar energy market, according to Dwayne Breger, director of the Division of Renewable Energy at the Massachusetts Department of Energy Resources (DOER), was the legislature’s passage in 2008 of the Green Communities Act. Among its most notable initiatives, the legislation established one of the nation’s first renewable energy portfolio standards (RPS), requiring that 15 percent of the state’s electricity come from renewable energy sources by 2020.
To enact this and other green legislation, the state created the Massachusetts Clean Energy Center (MassCEC) in 2009. The agency started providing rebates to homeowners, businesses and municipalities that installed solar power systems with the capacity to generate up to 15 kilowatts.
DOER also implemented a solar carve-out program, which issues a solar renewable energy certificate (SREC) to solar system owners for each megawatt-hour of electricity they generate. SRECs trade at market value, which floats currently between $200 and $250 apiece — a price often higher than fossil fuel-generated electricity. Retail electric suppliers gobble up these certificates, as they are required by state law to buy a certain number of them annually in support of renewable energy production.
If homeowners are hesitant to invest in the upfront costs of a photovoltaic system, third-party businesses have stepped in to fill the void by installing the equipment and racking up SRECs while hosts enjoy lower energy costs.
“It may take an upfront cost, but the payback with incentives is quite strong,” Breger said. “If you don’t want to have the upfront cost, you can do the third-party arrangement and have small but immediate energy-cost savings over time.”
So far, nearly 4,000 residential solar projects have been installed and only 10 of the state’s 351 cities and towns don’t have some form of solar activity, Breger said.
Gov. Deval Patrick’s goal in 2007 of stalling 250 megawatts of solar by 2017 now seems like an easy layup, considering residents, businesses and municipalities have already installed 205 megawatts, according to the MassCEC. The state has since readjusted its goal to 400, because of the success of its solar carve-out program.
Homeowners’ embrace of solar energy means the state’s RPS currently stands at 9 percent, Breger said, with an annual growth rate of 1 percent — on pace to meeting the 2020 goal.
Adoption of small-scale wind energy production has been less feverish, with the MassCEC reporting that 100 megawatts have been installed so far, despite an eventual goal of 2,000 MW by 2020. Most projects are based on farms or homesteads interested in testing out the systems, Breger said. Wind may be less popular because the financial incentive is only $50 per megawatt-hour generated — not to mention the fact that slapping solar panels on a roof is less complex in terms of zoning and neighbor relations than erecting a wind turbine in the backyard.
As for other projects, MassCEC plans to distribute $10 million through 2016 in rebates of up to $3,500 to homeowners, businesses, nonprofits and municipalities that install solar hot water systems as alternatives to oil or natural gas burners. The agency is also piloting a program that provides grants of up to $2,000 to homeowners who replace coal stoves, non-EPA-certified woodstoves or outdated fireplace inserts with high-efficiency, low-emissions fireplace inserts or wood-pellet heating systems.
These efforts are all part of Massachusetts’ plan to move toward a green energy future. “Our governor and others believe that the concerns and costs associated with climate change is something we need to address,” Breger said. “This is a win-win for a new economy, a new industry, and addressing our climate commitments.”
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