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Massachusetts energy officials unveiled the heirs apparent to its wildly successful Commonwealth Solar rebate program, using a mix of ratepayer funds and stimulus money to pay for the incentives.
Dubbed Commonwealth Solar II and Commonwealth Solar Stimulus, the programs aim to fill the gap in financial incentives left when the first, $68 million Commonwealth Solar program ran out of money in October — more than two years ahead of schedule.
At the time, solar installers said they were concerned the lack of incentives would stop projects from moving forward.
Commonwealth Solar II will provide rebate incentives for small residential and commercial systems, with total allocations up to $4 million per year. This program will be funded through the Massachusetts Renewable Energy Trust, which managed the last Commonwealth Solar program and is funded by a surcharge on electricity bills.
For larger projects, state officials plan to tap $8 million in state energy plan funding from the American Recovery and Reinvestment Act to provide rebates to projects. Those projects will require additional reporting and validation above and beyond what was traditionally necessary for Commonwealth Solar rebates.
Both programs are expected to begin in late January.
In an interview today, state Secretary of Energy and Environmental Affairs Ian Bowles said the programs will help the solar industry and building owners transition to a market-based incentive program.
“We always had the view that small scale, residential scale installations were going to need a rebate program long-term. I think we were surprised, however, by the overwhelming demand by larger installations for Commonwealth Solar,” Bowles said. “Stimulus funds provide a very helpful bridge for those medium-sized projects. I don’t think it's necessary or vital to the success of solar in the Commonwealth.... but it provides a very smooth transition to a solar renewable energy credit program.”
Such a program works by creating solar renewable energy credits, which utilities are then required to purchase from qualified projects much like the long-established Renewable Portfolio Standard. The value of those credits would rise and fall based on demand by the utilities and supply from solar installations, and could also be used to finance projects through banks.
The Massachusetts Department of Energy Resources has been developing regulations for such a scheme since the summer, and DOER Commissioner Philip Giudice said emergency regulations will be ready for Jan. 1. Then it will be up to the finance and installation community to make the market work, he added.
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