In the June 7, 2013 Solar Stakeholder Meeting in Boston, the Massachusetts Department of Energy Resources (DOER) announced that they would plan to file an Emergency Regulation by the end of June 2013, to revise the rules by which the current RPS Solar Carve-Out program will be regulated. The DOER met this goal by the filing this Emergency Regulation, which became effective immediately upon filing, on June 28, 2013. The Emergency Regulation will help to cover or mitigate any losses that developers would have experienced had the DOER limited the current program to strictly 400 MW, while also managing the potential cost impact to ratepayers, given there is potential for the program to expand past or end up less than 400 MW. To address this concern in the change in size of the program, the compliance obligation formula will be revised from 400 MW to the new Program Capacity Cap which will be announced by the DOER upon completion of all projects in July 2014.

Massachusetts DOER Files Emergency Regulation, Revising Rules for Current Solar Carve-out Program

Massachusetts DOER Files Emergency Regulation, Revising Rules for Current Solar Carve-out Program

A detailed version of the revised regulation is available on the DOER’s website, along with a list of projects that (1) have been determined to be qualified or submitted an administratively complete application under the original 400 MW capacity limit, and (2) those project that have applied outside the 400 MW capacity limit. The criteria for receiving a Statement of Qualification under the current Solar Carve-Out Program, outlined in the Emergency Regulation, will vary based on the project’s size and also the status of the project’s application, as outlined below.

Projects Greater than 100 kW

Projects greater than 100 kW must follow strict construction timelines in order to ensure their spot in the current 400 MW Solar Carve-Out Program. If a project has been issued a Statement of Qualification or has an application deemed administratively complete by the DOER, it will keep its qualification and status in the current program if it can meet the construction requirements and timeline. Projects outside the 400 MW capacity limit must have an Interconnection Service Agreement fully executed by the customer and utility, dated on or before June 7, 2013. In addition, they must also meet the construction timelines in order to be awarded a Statement of Qualification under the current program.

Construction Timelines

The construction timelines for projects greater than 100 kW are as follows:

  • Receipt of Authorization to Interconnect from the local distribution company by December 31, 2013.
  • Units that do not receive an Authorization to Interconnect by December 31, 2013 may receive an extension to June 30, 2014, if it can be demonstrated to the DOER’s satisfaction that the Unit has expended at least 50% of its total construction costs by December 31, 2013.
  • If a Unit has not received the Authorization to Interconnect as of June 30, 2014 but can demonstrate to the DOER’s satisfaction that the missing Authorization is due to delays caused by the local distribution company, or due to remaining steps required by other parties for safe and reliable interconnection, the Statement of Qualification will be extended until the Authorization is received or denied.

Projects Equal to or Less than 100 kW

Regardless of their placement in the 400 MW capacity limit, projects equal to or less than 100 kW, or designated as a Community Solar Garden by the MassCEC, will be qualified under the current program provided they submit a Statement of Qualification Application to the DOER, and have an Authorization to Interconnect by the later of December 31, 2013 or the effective date of the new solar program.

Timeline for Qualification

All projects qualifying under the current 400 MW Solar Carve-Out Program will have received a Statement of Qualification no later than December 31, 2013. Any projects failing to meet the criteria and construction timelines outlined above with have their Statement of Qualification revoked. This will help to ensure that the compliance obligation of the current solar program is not extended by an additional year, creating additional costs to the ratepayer. As mentioned above, the compliance obligation formula will then be revised from 400 MW to the new Program Capacity Cap, should it exceed 400 MW, to be announced by the DOER upon completion of all projects in July 2014.

Next Steps for the Emergency Regulation

Although the Emergency Regulation has been filed and may now be considered in effect, a Public Hearing and comment period will soon be scheduled and held, in accordance with administrative procedures. The regulation will remain in effect for 90 days; the DOER will have the opportunity to make the regulations permanent, and will move quickly to promulgate the final regulation so as to keep the rules in effect throughout the construction timelines and commencement of the new Solar Carve-Out Program. The DOER recognizes the need to complete this process quickly and efficiently, and without deviation, to avoid any confusion or concerns in proceeding with the financing and construction of projects.

Sol Systems will continue to follow the progress of this Emergency Regulation and provide updates on our blog. If you have a project that is eligible for the current Solar Carve-Out Program and is in need of financing, please contact finance@solsystemscompany.com with information on your project, including financing needs, and we will be happy to follow up. Sol Systems also currently offers three SREC agreements to customers in Massachusetts: Sol Annuity, Sol Brokerage, and Sol Upfront. If you are interested in becoming a customer, please contact info@solsystemscompany.com for more information.

About Sol Systems

Sol Systems is a boutique financial services firm that offers investor clients direct access to the renewable energy asset class and provides developers with sophisticated project financing solutions. Founded in 2008, Sol Systems focuses on meeting the most critical needs of the industry, including SREC monetization, capital placement, tax equity, and New Market Tax Credits. To date, the company has arranged financing for thousands of projects and facilitated hundreds of millions in investment on behalf of Fortune 100 companies, private equity, family offices and individuals.

For more information, please visit www.solsystemscompany.com.

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