1. Net Metering Implications for Community Shared Solar and Security Exchange Commission Considerations

2. The Cadmus Group, Inc. Energy & Environmental Consultants – HQ: Waltham, MA – Helping clients with solar policy and projects since 2002 – Have advised communities on close to 100 solar projects Currently working with two communities on CSS projects – Wrote two reports for MA DOER on Community Shared Solar (CSS) Community Shared Solar: Review and Recommendations for Massachusetts Models Community Shared Solar: Implementation Guidelines for Massachusetts Communities – Developed and Administer the System of Assurance of Net Metering Eligibility (massaca.org)

3. Why Is Net Metering A Big Deal For Community Shared Solar (CSS)? Virtual Net Metering is the process for translating solar energy generation to dollar credits on CSS Participant electric bills. CSS PARTICIPANT ELECTRIC BILLS Schedule Z ENERGY (kWh) Net Metering Credits ($)

4. CSS & Net Metering Caps & Rates CSS projects will fall under the Private net metering cap – Value of a net metering credit is based on Public net metering credits can not transfer to a private entities – However, Private net metering credits can be transferred to public entities – Effectively limits projects to 1 MW-AC Value of a net metering credit is based on a utility small commercial rate class – Rationale: the electric service at the solar PV site falls under the small commercial electric tariff – Net metering credit rate not based on a residential rate – Value subject to “Change In Law” risk, i.e. if net metering policies change the value could be impacted significantly, also changes in the small commercial tariff can impact the value

5. Net Metering Status – North Eastern MA (DEC. 2015) NGRID (BLUE) Net Metering Cap Reached – No Additional Net Metering Unless Legislature Raises the Cap (74 MW on waiting list!) EVERSOURCE- (Light Green) – Net Metering Capacity Available (73 MW available). Hard to find land / space for solar PV projects. MUNICIPAL UTILITIES (Dark Green) – Various Net Metering Policies Sources: MA DPU / massaca.org EVERSOURCE (Light Green): Net metering capacity available, but hard to find land! EVERSOURCE (Light Green): Net metering capacity available, but hard to find land! NGRID (Blue): Land available, but no metering capacity left! MLP (DARK GREEN): Not subject to net metering caps / can set their own policies!

6. What About Parking Lots And Roof Tops? Great use of space! However, why would a Municipality, Mall, etc. want to share the energy savings? – Under most scenarios the host site saves more money by keeping all the net metering credits to themselves (thus no CSS possible) Financial bottom line – CSS doesn’t make sense if goal is to maximize savings Exception: host’s electric load is smaller than the amount of energy generated (thus can’t use all the net metering credits) – Host site must get something else out of it, e.g. for a Mall – good PR and advertising

7. New Policies To Grow CSS? How could new legislation help grow CSS in Massachusetts? – Net metering cap exemption Residential solar under 10 kW-AC exempt from the caps Shouldn’t residential CSS also be exempt? – Statewide program Supply demand for CSS in greater Boston area with solar installed in Central and Western Mass. Credits can cross utility territory boundaries

8. Switching Gears: Security & Exchange Commission Applies to “home grown” CSS projects where the Participants form a company for the purposes of establishing and administering a CSS. (example: Harvard, MA, www.harvardsolar.org) www.harvardsolar.org – Participation = investment in company – SEC regulates investments, registering investments can be costly and time consuming – CSS models use a private offering exemption, but this limits the number of non-accredited investors (35) Accredited investors make over $200,000 per year or net worth over $1 million excluding the primary residence Limitations: e.g. can’t publically advertise for Participants Crowdsourcing: can be used where no return is made on an investment (e.g., providing a zero interest loan), may be more opportunities in the future

9. Questions? Dave Beavers 617-673-7103 David.Beavers@cadmusgroup.com