Worcester Business Journal

34 Worcester Business Journal • August 31, 2015 www.wbjournal.com Is Massachusetts solar ready to grow on its own? >> Continued from Page 1 Y O U R R E S O U R C E F O R B U Y I N G O R S E L L I N G A B U S I N E S S Your resource for buying or selling a business A seminar for family business and privately held enterprises, produced by SESSION 1: How business valuation professionals go about determining your company's value. What is Your Business Really Worth? This seminar will give you an in depth understanding of how to estimate the value of your business. If you are a family business, sole proprietorship or entrepreneur and wonder what your enterprise is worth and you want actionable ideas on how you can increase that value - this forum is for you! WEDNESDAY, SEPTEMBER 30, 2015 3:00 - 6:30pm The Beechwood Hotel, Worcester Cost: $40 Space is limited. Pre-registration required. The BUSINESSVALUATION S U M M I T $ In Print • Online • In Person For event updates or to register visit: www.wbjournal.com/valuationsummit Corporate Sponsor PANELISTS TO DATE: • Chris M. Mellen President, Delphi Valuation Advisors, Inc. MODERATOR: • Terry Shepherd Principal, ROCG/Shepherd & Goldstein Consulting Group LLC • David E. Surprenant Managing Partner, Mirick O'Connell • Christopher R. George President & CEO, George & Company WRAP UP: What you can do to increase the value and the attractiveness of your company to potential buyers? SESSION 2: Case studies of recent transactions PANELISTS TO DATE: • Mary Casey Managing Attorney, Harbor Law Group MODERATOR: • Neil Gould Director, WBJ Business BUY/ SELL Exchange • Nate Shepherd Managing Director, BellMark Partners, LLC you run the numbers, it may already be comparable to buying electricity from the grid. But, he said, that doesn't mean there's no longer a need for incentives. Solect works with commercial custom- ers, businesses that understand that mounting solar panels on the roof would help them save money in the long run, as well as providing environmental bene- fits. The trouble is that it can be hard for them to justify a capital expenditure if they can't expect it to pay for itself in the shorter term — three to five years. "They're weighing that investment versus another machine, more people," Howe said. "If you can't get it in a range of a return on investment that makes sense, then they're not going to spend the money on solar." The question of what, exactly, consti- tutes a subsidy can be surprisingly tough to answer when it comes to the solar industry. The state's utilities argue that net metering — the requirement in Massachusetts and other states that elec- tricity companies buy renewable energy from their customers at the same rate they sell it—is a huge subsidy. National Grid spokeswoman Mary-Leah Assad said 99 percent of the utility's customers that don't have solar will spend $1.5 bil- lion through 2020 to help pay for net metering. Assad said National Grid pays solar producers all of what they would have been charged for the same amount of power, including distribution and transmission chargers, even though they're not providing those services. "The amount paid to those custom- ers is tracked and then the costs are spread over all customers," Assad said in an email. But solar producers question the idea that net metering is a cost for ratepayers, and a number of recent studies back them up. One report by Acadia Center, a clean energy advocacy group, found that a solar installation in Massachusetts pro- vided 29 cents per kilowatt hour in total benefits, compared with the state's aver- age retail electricity rate of 17 cents. A lot of different variables go into determining the "real value" of solar. If power is being generated at small facili- ties all over the state, it means less is lost in the course of being transmitted up and down the grid. Meanwhile, solar energy is usually at its strongest in the afternoon, when demand is also high. That means energy from the sun might be substituting not for average-cost elec- tricity, but peak-demand energy made by firing up higher-cost plants. And then there's the question of "sub- sidized compared to what?" Mark Durrenberger, president of Hudson- based New England Clean Energy, argues that there are a lot of ways oil and gas production benefits from govern- ment expenditures. "What would you call an aircraft car- rier in the Persian Gulf to the oil indus- try?" he asked. "What would you call the tax credits for drilling?" Durrenberger said it's also important to account for the costs of environmental damage and health problems that aren't picked up by fossil fuel industries but get passed on to the public in various ways. The governor's plan would continue to offer solar renewable energy credits, or SRECs, for solar production until the state reaches its goal of 1,600 MW of installed solar capacity. It would also raise caps on non-residential net meter- ing from 4 to 6 percent for private facili- ties and from 5 to 7 percent for public sites, and would let the Department of Public Utilities raise them higher as needed. (Residential installations aren't subject to the cap.) National Grid, which had already hit the earlier cap, has said it could run up against the new one as soon as October. For now, solar installers say all this seems fine, but they say the state also needs a longer-term plan to continue to keep solar on a level playing field with fossil fuels. "We're such a small percent of power on the grid," Howe said. "I'd like to see governor's office come out in excess of 20 percent of power in the state being renewable." n Soaring with solar Massachusetts' solar-generation capacity began to soar in 2011. (capacity shown in megawatts) Source: Mass. Dept. of Energy Resources '02 MEGAWATTS 0 200 400 600 800 1,000 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 841

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