1. Electricity Restructuring Roundtable
Policy Support for the Development of a Robust Solar PV Market in MA Dwayne Breger, Ph.D. Director, Renewable and Alternative Energy Division September 16, 2011
Electricity Restructuring Roundtable
Boston, MA

2. Outline Solar Goals and Market Creation since 2007
Policy Design of the MA RPS Solar Carve-Out
Current Status of the SREC Market
Update on Net-Metering
Associated Activities
Solarize Massachusetts
Renewable Thermal Initiatives 2 2 2 2

3. Cumulative Obligations of RPS / APS* Programs
RPS / APS Minimum Standard 0% 5%
10%
15%
20%
25%
30%
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Compliance Year
Percent Obligation, %
APS
Class II - WTE
Class II
Class I - Solar
Class I
2011 Compliance Obligations by Class
Class I – 6%
SCO – %
Class II RE – 3.6%
Class II WE – 3.5%
APS – 2%
Solar historically very small part of total compliance (less than 0.1%)
SCO will bring it closer to 10% of Class I
*Alternative Energy Portfolio Standard (APS) 3 3

4. Massachusetts Solar Development Strategies (apart from the RPS Solar Carve-Out)
Governor Patrick’s goal – 250 MW by 2017
Commonwealth Solar (Rebates) – initiated Dec. 2007
Rebate Program: $68 million, 27 MW
Successfully achieved and completed Oct. 2009
Created the beginning of a robust PV development sector in MA
Commonwealth Solar II (Rebates) for small (<10kW) systems has maintained residential PV market (managed by the MassCEC)
Federal Stimulus/ARRA funds used by DOER to support 10 MW of PV at state/municipal facilities.
Green Communities Act allows for Distribution Utility ownership of PV Generation
National Grid approved for 5 MW, 3.3 MW installed
WMECO approved for 6 MW, 1.8 MW installed
50 installers in 2008, 200 by end of 2009
CS & Cstim:
Both launched in January 2010
Stim was in two blocks of $4 million each
Supported over 7 MW of projects
CSII continues and is slated to last through 2011
Primarily residential, but also small commercial
Supports small PV market, where installed costs/watt are higher full SREC value not often realized
Over 1,500 projects to date
Federal Stimulus:
10 MW of projects at municipal and state facilities (EECBG, DCAM)
Most are eligible for SRECs
Utility:
GCA, must be approved and built by 2012
Unlikely additional projects will be built beyond what is approved 4 4 4 4

5. Installed Capacity Leading up to Solar Carve-Out
CS II &
CS Stimulus
Utility Owned
Federal Stimulus
2007
Pre 2007
Most of Stim, CSII, and Fed Stimulus eligible. Nearly 35 MW of these projects approved or built to date.

6. RPS Solar Carve-Out Will Carry Market Far Forward
Currently at 59 MW installed w/ more than 40 in pipeline
If market is relatively balanced going forward, 400 MW should be reached in the 2016/2017 timeframe 6

7. RPS Solar Carve-Out Program Basics
Market-based incentive, part of the broader RPS Program
Program is capped at 400 MW of qualified capacity
1 SREC (Solar Renewable Energy Certificate) represents the attributes associated with 1 MWh of qualified generation
Units must be qualified by DOER before they can begin generating SRECs
All generation is metered and reported to MassCEC’s Production Tracking System (PTS)
MassCEC provides data verification and reports generation to NEPOOL GIS where SRECs are minted on a quarterly basis
MassCEC is IV for all SREC generation
NEPOOL GIS is tracking system for all NE certificates, including SRECs 7

8. Eligibility Criteria and Qualification Process
Have a capacity of 6 MW (DC) or less per parcel of land
Be located in the Commonwealth of Massachusetts, which includes municipal light district territories
Use some of its generation on-site and be interconnected to the utility grid
Have a Commercial Operation Date of January 1, 2008, or later
Online application
Need Authorization to Interconnect from local utility before SRECs can be generated
Review process is quick and straightforward (30 days or less)
Ineligible funding sources include nearly all MRET rebate/grant programs prior to 2010
Also includes projects that received ARRA funds in excess of 67% of total costs

9. SREC Program Design Features
Program design features help ensure market stability and balance
Adjustable Minimum Standard
maintains SREC demand/supply in reasonable balance
Forward ACP Rate Schedule
proposed; provides investor certainty
Solar Credit Clearinghouse Auction Account
essential price support mechanism to assure SREC floor price
Opt-In Term
provides right to use Auction, adjusted to throttle installation growth rate
These features work together to ensure the market will remain in balance as more PV is built

10. Minimum Standard Adjustment
 Compliance Year
Compliance Obligation (MWh)
Minimum Standard
Equivalent Full-Year Solar Capacity (MW)
2010
34,164
0.0679% 30
2011
78,577
0.1627% 69
2012
81,559
0.1630% 72
For 2012 and beyond, the Minimum Standard (Compliance Obligation) is adjusted each August according to a formula set in the program regulation.
2012 Min. Stand = 2011 Min. Stand
+ [Projected 2011 SRECs – Actual 2010 SRECs]  x  1.3
– 2010 ACP Volume +  2010 Banked Volume Auction Volume
Actual 2012 Calculation
81,559 MWh = 78,577 MWh + [29,056 – 2,738]  x  1.3 – 31,231 +  0 + 0
30% growth rate explanation
Base formula vs. adjustments
Projected SRECs based on first 6 months of PTS generation data and known pipeline of projects 10 10

11. Proposed ACP Rate Schedule
2011 ACP Rate set at $550 (reduced from $600 in 2010)
DOER recently proposed a 10-year forward ACP Rate Schedule
Designed to reduce market risk and uncertainty
Maintains current ACP Rate through before reducing 5% annually
DOER accepted written comments on proposal through August 15th
Will issue an RPS Guideline after considering comments received
Will move to insert schedule into the MA RPS Class I Regulation shortly after the Guideline has gone into effect
Compliance Year
ACP Rate per MWh
2012
$550
2013
2014
$523
2015
$496
2016
$472
2017
$448
2018
$426
2019
$404
2020
$384
2021
$365
2022 and after
added no later than January 31, 2012 (and annually thereafter) following stakeholder review 11 11 11

12. Program Design: Opt-in Term
The Opt-In Term is the number of quarters a qualified project has the right to deposit SRECs into the Auction Account (to be assured floor price). The Opt-In Term is currently 10 years (40 quarters), but can be adjusted each July for subsequent qualified projects.
Opt-In Term Adjustments
Long Market: Opt-In Term reduced by 4 quarters for each 10% of Compliance Obligation deposited into the Auction Account
Short Market: Opt-In Term increased by 4 quarters for each 10% of Compliance Obligation met through ACP Payments
Opt-In Term may not increase or decrease more than two years as a result of an annual adjustment, nor can it exceed 10 years.
Opt-in term can’t go below 5 years for the first 7 years of the program
Max. opt-in term is 10 years
Adjustments are announced by July 20th
Only affects new projects 12 12 12 12

13. Price Support – Auction Mechanism
Solar Credit Clearinghouse Auction Account
Open every year from May 16th – June 15th
Any unsold SRECs may be deposited into the Account
Designed as option of last resort for SREC owners that have not found buyers for their SRECs by the end of the Compliance Year
Auction held no later than July 31st, but after the Minimum Standard adjustment is announced
Deposited SRECs re-minted as “extended life” SRECs (good for compliance in one of the following two Compliance Years)
SRECs offered to bidders for a fixed price of $300/MWh before being assessed a $15/MWh auction fee by DOER. SREC owners will be paid $285/MWh for each SREC sold through the Auction.
Bidders bid on volume willing to buy at the fixed price. Auction clears if bid volume exceeds volume deposited. Multiple rounds of Auction are used, if necessary, to clear deposits.
DOER would only expect to hold an auction during years when there is an oversupply of SRECs.

14. Current SREC Program Statistics – 9/16/11
Number of Systems
Capacity
(MW)
Applications Received
1,038
49.7
Applications Qualified
1,008
41.0
Qualified but Installation Incomplete 31
14.1
Installed
977
26.9
Over 1,000 applications received and qualified
Approximately 41 MW qualified
Nearly 27 MW of projects are installed
2,741 SRECs created in 2010
2,358 SRECs created in Q
More than 6,000 SRECs expected to be created in Q 14

15. Current SREC Program Statistics – 9/16/11 Activity by System Size
Bulk of applications (77%) are for small systems. However, these only represent 8% of the total capacity qualified.
Projects over 100 kW represent 8% of total applications, but 79% of the qualified capacity. 15

16. Solarize Massachusetts
Goals
Utilization of community networks and local marketing to decrease the installer’s customer acquisition cost (soft costs)
Reduce cost of materials through bulk purchasing (hard costs)
Increase adoption rate of solar PV
Methods
Educating community about solar PV
Partnering with the town and solar integrator to offer reduced pricing to community members
Tier pricing structure – the more people sign up, the more everyone saves!
Initial Outcomes are encouraging
Pilot program in
Harvard
Hatfield
Scituate
Winchester
Collaboration between MassCEC and DOER Green Communities Program

17. Net Metering Changes Adopted in 2010
Requires DPU to adopt an “assurance of net metering process”
New definition for public net metering facility
Owned or operated by a public entity; OR
100% of output is assigned to the public entity
New Caps of 1% for private projects and 2% for public projects
Currently DPU Dockets and are addressing implementation of these and other changes.

18. Solar Hot Water Pilots and Low-Income Program (MassCEC)
Commonwealth Solar Hot Water Residential Pilot Program
$1 million budget for SHW systems serving 1-4 units
129 projects awarded to date
Commonwealth Solar Hot Water Commercial Pilot Program
$1 million budget for pre-design study grants and construction rebates
$350,000 for pre-design studies and $600,000 for construction rebates with the goal of supporting 100 projects.
Low Income Solar Thermal Program
MassCEC awarded the Low-Income Energy Affordability Network (LEAN) $2 million to manage program
Install SHW systems at multi-family residential and nonprofit facilities serving low income residents and participants
Pre-Design Studies:
-Building owner must have procured an experienced consultant
Report should analyze site, the roof structure, the hot water load (to be measured through metering), and project economics and specify system design.
Time to Complete Study: 3 months
Construction Rebates:
- Estimated performance-based incentive (same as residential program)

19. Renewable Thermal Policy
No comprehensive policies supporting development of renewable thermal in place
Despite large potential for decreasing dependence on fossil fuels, meeting GWSA GHG reduction commitments, and job creation
MA Clean Energy Plan 2020 calls for Policy Framework
DOER/MassCEC
RE Thermal technology assessment (ongoing)
Solar, Biomass, High Efficiency Heat Pumps, Biofuels
In fall 2011 RE Thermal policy options will be assessed
MassCEC
Implement pilot programs (solar ongoing)

20. Production Tracking System Commonwealth Solar Hot Water
Links and Contact Info
DOER
Website:
Contact:
Production Tracking System
Website:
Contact:
Commonwealth Solar II
Website:
Contact:
Solarize Mass
Website:
Contact:
Commonwealth Solar Hot Water
Website:
Contact: 20

21. Appendix Slide

22. Price Support – Auction Mechanism
Explain what clear means 22