State regulation aims to increase access to solar energy for low-income people

As the state looks to transition to clean energy sources, with a goal of achieving net-zero carbon emissions by 2050, community solar programs are being touted as a way to provide access to the technology to renters and other residents who can’t install panels on their roofs.

However, the system faces obstacles in the form of a complicated billing system that community solar providers say creates barriers.

A new regulation issued last month by the state’s utilities regulatory agency aims to simplify that process by creating new options for using community solar directly through companies and programs where residents get their electricity.

James Van Nostrand, chairman of the Massachusetts Department of Public Utilities, which issued the order, said the type of community solar offering the decision supports could be crucial to providing energy access to households that otherwise could not benefit.

“Community solar is a big deal in terms of being able to reach people who don’t have their own home, right? The access that community solar allows is huge,” he said.

Supporters of the technology have pointed to the dual-billing model, in which customers pay one bill to a solar provider and another to their electricity provider — for which they receive a discount in the form of solar credits — as one of the barriers limiting access to the programs, especially among low-income customers.

Access to the program is further complicated by other challenges in the application process and credit verification requirements.

The new DPU guidelines establish municipal aggregation programs — programs in which municipalities buy electricity wholesale and sell it to residents — as well as an Eversource program to operate shared solar programs in low-income communities across the state.

State officials expect the new changes will help close the access gap and make solar energy available to more low-income households.

A study by the Department of Energy Resources found that low-income solar programs accounted for just 2.5% of the reported and qualified solar capacity under the Solar Massachusetts Renewable Target, or SMART, the state’s effort to support and expand solar energy in Massachusetts.

Approval to pair solar for low-income communities with municipal aggregation programs is an important step for Boston, which has long sought to include solar in its Community Choice Electricity program.

Under the plan, outlined in a state order, it will take an approach different from the traditional community model in which a resident signs a contract with an energy provider and receives all of the solar credits generated by their portion of the project, for which they pay a monthly fee.

Instead, the city would partner with a solar technology development company, and any savings generated from that agreement would be automatically shared among all low-income customers through the city’s aggregation program.

“I think the appeal of this approach is that the work is really done on the city side—the customer doesn’t have to do much,” said Aladdine Joroff, Boston’s climate policy director. “The city makes the determination, and that discount just shows up on everyone’s bill without having to sign up for the credit individually.”

The plan has relatively long roots. In late 2020, when the city first announced its Community Choice Electricity program, it included an intention to include solar power in the city’s aggregation offering, using a model outlined in the new DPU ordinance.

At the time, the city was looking to partner with solar energy provider NextGrid Inc. to build the solar projects. The DPU ultimately killed the plan, citing the need for additional levels of approval.

When Boston first announced the plan, the city estimated it would save the average low-income customer $72. Joroff said the city does not have an updated estimate now that the new DPU regulation has been issued.

Besides Boston, three other municipal aggregation programs in the state have expressed interest in including solar.

Charlie Harak, an attorney with the National Consumer Law Center who specializes in energy issues, said the inclusion of municipal aggregation programs was “a very positive part of the decision.”

The Cape Light Compact — a coalition of energy service organizations in 21 cities on Cape Cod and Martha’s Vineyard — would enter into a contract with a solar provider and apply any resulting discounts to all low-income customers under its municipal aggregation program, similar to Boston’s plan.

Chelsea and Newton presented proposals that included the possibility of using the same model or an alternative use of a credit system more similar to the traditional community solar model.

As described in the ordinance, the Boston plan, like the Cape Light Compact, would provide reduced rates to all low-income residents under an aggregation program but would not prevent them from joining an additional community solar sharing program.

But the change won’t happen immediately. The June ordinance made clear that municipal aggregation programs would be allowed to offer solar power to low-income communities, but the DPU has yet to spell out the details of how that would work.

Some of that is being slowed by other agency processes. In August 2023, the department opened another docket — number 2367 — to revamp how municipal aggregation works in the state.

Joroff described the program as an attempt to better balance the program’s two goals: transparency and flexibility.

Van Nostrand said clear structures for how the city’s community solar offerings will work still need to be developed in the coming months, in part in anticipation of the completion of the city’s aggregation reset. He said he hopes it could make a big difference once the details are laid out.

“We are one step away from a real opening,” he said.

Around the same time the state announced the new SMART guidelines, Van Nostrand said, consultants for the state’s municipal aggregation programs had just reached an agreement on some changes, a major step toward issuing a formal order to revamp those programs.

The specific timeline for what happens next — and how municipalities can move from the simple permitting outlined in the June ordinance to actually deploying solar for low-income communities as part of their electricity aggregation program — remains to be determined, but Van Nostrand said ironing out those details will be a top priority. He said he would be surprised if it wasn’t done by the end of the year.

The regulation also addresses the ability of utilities such as Eversource and National Grid to operate their own solar energy programs for low-income communities.

The state anticipates that distributor-led programs will be able to close the gaps in solar access. According to the order, Eversource serves as the distributor for 33% of the state’s public housing stock, but only 7.5% of solar providers under the SMART program serve public housing in the area.

According to the decision, the DPU approved Eversource’s plan. The proposal described an opt-out model in which customers would be automatically enrolled and created a simplified billing system that would not require participants to pay two separate bills for the community solar program. Under the plan, customers would receive benefits partly in the form of a credit on their electric bill.

The distributor estimated the program’s administrative costs at $7.4 million over its planned 20-year duration.

National Grid’s plan was rejected, with instructions to change aspects of the plan. This proposal did not include an opt-out model and increased administrative requirements — with costs estimated at $24.7 million.

Van Nostrand pointed to work National Grid has done in other states, such as New York, that he believes should be implemented here as well, but he expects those changes to be implemented quickly.

“We probably have some good solutions (from other states) that could be implemented in Massachusetts, which is why we weren’t ready to approve National Grid’s proposal,” he said.

Eversource said the new program could have a significant impact on low-income households. According to the order, the distributor estimated that its solar offering for low-income communities could result in more than $300 million in savings for customers who participate in it.

Elements of Eversource’s proposal, such as an opt-out system that requires residents to express their disinterest in participating rather than being asked to opt in, led to approval of the company’s proposal, Van Nostrand said.

“In our opinion, the most important thing is to simplify the recruitment process and we think they have achieved that,” he said.

Harak said application processes that may mislead residents or make it difficult for them to access solar programs can deter them.

“It removes a barrier that’s common in almost every low-income program, which is the application process,” Harak said. “The application process is basically, if you don’t opt ​​out, you’re in.”