The United States is facing economic peril not seen since the Great Depression. With 30 million people filing for unemployment in the past month, we’re in new territory. Legislators in all state houses are scrambling to draft initiatives to create relief and provide some certainty to industry once people can get back to work on a more regular basis.
Solar policy advocates see this time as crucial to provide certainty and stability to the solar industry, and underscore efforts to transition into a cleaner energy economy.
In a plea to congress to extend the Federal Investment Tax Credit or make it payable to businesses or consumers, the Solar Energy Industries Association (SEIA) predicted up to half of the solar workforce could lose their jobs during this crisis, upwards of 120,000 workers. The U.S. Energy Storage Association has noted over 60% of energy storage businesses are seeing project delays due to the pandemic, with dire consequences for businesses.
Some states are taking matters into their own hands to strengthen incentive programs which are already working and enacting provisions which make it easier for projects to be completed once work can proceed again.
This week, Massachusetts has doubled the size of it’s wildly popular and well designed Solar Massachusetts Renewable Target Program (SMART) from 1600MW to 3200MW.
“It provides some certainty to the industry,” said David Gahl, senior director of state affairs for the Solar Energy Industries Association (SEIA). “The first 1600 MW were filling up quickly and there were a lot of questions that the industry had about what the future was going to look like. This provides a runway for solar firms. They can still build and sell projects to customers based on a known framework going forward.”
The program includes an ingenious progressive solar incentive system which favors low-income, small scale, and community solar energy projects. At the program’s core is a formula which includes a base compensation rate which increases as solar system sizes get smaller.
The SMART Program requires the 3 main Electric Distribution Companies (EDCs)—Eversource, National Grid, and Unitil—to make incentive payments directly to homeowners who install solar systems within their territory. The incentive is calculated based on a “block” system, where each block represents about 200 MW of solar energy generation capacity.
The recent policy change to double the size of the program expanded the number of blocks from 8 to 16.
At the current level (early 2020), people who install solar on their homes are eligible for a net incentive payment of about $.102/kWh for 10 years. Considering the average Massachusetts home solar system generates around 7,900 kWh per year, that’s over $800 in incentive payments per year.
In New York, state legislators enacted provisions to fast track permitting approvals for large scale solar projects. This is especially critical timing because the state made a challenging decision to halt all construction projects to keep everyone as safe as possible during the pandemic.
When the risks from COVID-19 abate, it will be crucial that projects can move forward at a brisk pace to get people back to work as smoothly and quickly as possible.
The Solar Energy Industries association applauded the move in a recent press release.
“We commend Governor Cuomo, Speaker Heastie, and Majority Leader Stewart Cousins […] These are unprecedented times and we appreciate that amidst the COVID-19 crisis, the New York legislature and governor are prioritizing the long-term stability and growth of the solar market.”
Over in Minnesota, solar policy advocates are urging legislators to extend the Solar Rewards program which is due to end in 2021 and boost funding by $17 million. The program is seen as an economic catalyst and has no impact on the state’s general fund.
“After years of growth, solar could see a decline without state investment,” said David Shaffer, executive director of the Minnesota Solar Energy Industries Association (MNSEIA). “The legislature has to act this year, or we’ll see job losses, even without COVID-19”.
It remains to be seen if the message will get through to Minnesota state lawmakers, or those in other states. While there are many people hurting in harder hit sectors like travel, dining, and hospitality, now is a very important time for states to learn from each other’s best practices to support our clean energy future.
Massachusetts has topped our national solar rankings for years, and strong legislative action to encourage solar energy growth is a big reason why. We commend their voters and elected officials for their continued national leadership on clean energy policy.
Last modified: April 17, 2020