On July 2, 2008, Governor Deval Patrick signed the Green Communities Act (GCA), a comprehensive piece of legislation that aims to reduce energy consumption and spur clean energy technology in the Commonwealth of Massachusetts. As a result, according to the American Council for an Energy-Efficient Economy (ACEEE), Massachusetts is now ranked number one in the 2011 State Energy Efficiency Scorecard.
The GCA is designed to promote renewable energy through mandates and incentives requiring utility companies to enter long-term contracts with renewable energy companies in order to help developers of renewable energy technologies obtain financing to build their projects. Companies are selected based on cost and viability of projects through a mandatory procurement process.
Increase of Net-Metering Conditions
The policy includes a widening of the state's past net-metering provisions and makes it possible for people who own wind turbines or solar systems that generate power to sell their excess electricity back onto the grid for installations of up to two MW—an increase over the state's previous net-metering cap of 60 kW. Subject to approval by the Massachusetts Public Utilities Commission, this measure also allows utility companies to offer up to 50 MW of power-purchase agreements (PPAs) to residential and commercial customers, enabling third-party ownership of solar electric installations.
Increase in Renewable Portfolio Standards (RPS)
Additionally, the rate of increase in the RPS doubles from 0.5 percent per year to one percent per year, with no cap. This means that large-scale utilities and other electricity suppliers will be required to obtain renewable power equal to seven percent of sales in 2012; a number that is expected to rise to 15 percent in 2020 and 25 percent in 2030.
Solar Renewable Energy Credits (SRECs)
SRECs represent one megawatt-hour of solar electricity generation and can be obtained by a utility's direct generation of solar power, or through the utility's purchase of SRECs from privately-owned projects. Under GCA, solar SREC prices can reach up to $600 per MW (several times the current value of other credits in RPS). Those SRECs can be sold at an auction, held once a year, for utility companies to satisfy their renewable power requirements.
Perhaps the greatest success of the GCA legislation is the opportunity to "make the math work" for all solar projects, from residential to utility scale. The act affords the chance to overcome initial investment hurdles, tout responsible energy management, and utilize a clean energy source that can double as a revenue stream for years to come.