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18 2017 Economic Forecast • www.wbjournal.com • Worcester Business Journal E n e rg y Join the Worcester Business Journal for a NEW YEAR'S NETWORKING PARTY and AWARDS CELEBRATION! Register today and don't miss this opportunity to mix and mingle with the region's Best Of Business! BOB winners will be announced in the January 9th edition! Start the New Year off with BOB! The Best Of Business Awards event that is! Thursday, January 26, 2017 The Beechwood Hotel, Worcester • 4:30 - 7:30PM Cost: $35 • Pre-registration is required. www.wbjournal.com/BOBawards Presenting Sponsor Supporting Sponsor Awards W o r ce s t e r B us i n e s s J o u r n a l 2017 B E S T O F B U S I N E S S W o r ce s t e r B us i n e s s J o u r n a l Tariff system in works as tensions build over solar subsidies Only months after Gov. Charlie Baker signed a solar energy bill into law giv- ing the industry breathing room to continue to grow, major decisions loom over the short-term and long-term strategy for solar growth in Massachusetts, promising to reignite a contentious debate over the future of solar incentives. Baker's energy team over the past six months has been putting together a new solar incentive proposal that would replace the expiring solar renew- able energy credits (SRECs) program with a declining tariff system that offi- cials believe will be a cheaper and more stable path to foster continued expan- sion. The tariff program's goal would be to double the amount of installed solar power across Massachusetts over the next five to six years by 1,600 mega- watts with slowly declining incentives for project of all types, including resi- dential, commercial, low-income and community solar. Solar advocates believe the system, which has been deployed with success in other states such as California and New York, could work, but stress that the details, including the value of the tariffs, have to be calibrated just right. The administration is also working under an ambitious timeline, according to industry officials, that would have the new system in place by next sum- mer, and have yet to answer the ques- tion of what happens between now and then when the current SREC program expires. "This kind of step down incentive program has proven successful in a number of other places, principally California. Everyone agrees that the current SREC program has been too expensive for the state and its custom- ers and the plan has always been to reduce incentive levels, but there's a lot of work to do between now and the sort of contemplated hand-off in January to the DPU, so that's one con- cern. Can we close all the open loops that need to be closed?" said Sean Gallagher, vice president of state affairs for the Solar Energy Industries Association. The Department of Energy Resources published a "straw proposal" in late September, outlining the basic framework of the tariff system, and has been working with stakeholders to fine tune the proposal. The public comment period ended on Friday, and DOER hopes to promulgate emergency regula- tions over the winter before handing off the tariff approval process to the Department of Public Utilities. "I think the chances of getting it in place next summer are significantly enhanced if there's a high amount of consensus of what the department hands off to DPU. If there's a lot of conflict that's harder," Gallagher said. Under the current system, solar proj- ects qualify for SRECs and customers partner with a broker who sells those credits on an open market to utilities and suppliers. Because the credits are traded as a commodity, they are subject to price fluctuations, creating some uncertainty for developers depending on the credits to finance their solar projects. The proposed tariffs to be paid by utilities to solar-producing customers would have a set value for the duration of the program, creating a more pre- dictable revenue stream for solar power generators. Continued from Page 17 City Manager Ed Augustus tours Worcester's $27-million landfill solar array. Fuel mix The type of fuel used to generate electricity in New England's power plants has shifted toward natural gas in the last 15 years. Source: ISO New England, Regional Electricity Outlook, 2016 NATURAL GAS 2000: 15 percent 2015: 49 percent NUCLEAR 2000: 31 percent 2015: 30 percent RENEWABLES 2000: 8 percent 2015: 9 percent HYDRO 2000: 7 percent 2015: 7 percent COAL 2000: 18 percent 2015: 4 percent OIL 2000: 22 percent 2015: 2 percent