Massachusetts DOER Finalizes Rules for Solar Carve-Out Program

By on October 9, 2013

by William Friedman

The Massachusetts Department of Energy Resources (DOER) announced that it re-filed its Solar Carve-Out Emergency Regulation without any changes, thereby finalizing the temporary regulations that had been in effect for the past three months and bringing stability to the existing Solar Carve-Out program.  The Solar Carve-Out program enables participating solar units to produce valuable Solar Renewable Energy Credits (SRECs), which can be sold on the open market or at auction.  Earlier this year, DOER announced that applications exceeded the Solar Carve-Out program’s 400 MW cap.  In late June, DOER released the Emergency Regulation to deal with the program’s oversubscription and to offer a path forward for projects that were uncertain as to whether they would still qualify for incentives under the Solar Carve-Out. 

Under Massachusetts law, however, the Emergency Regulation could only remain in effect for three months if not finalized into law.  Finalizing the regulations gives all projects relying on the terms of the Emergency Regulation certainty that the previously announced requirements and construction timeline will remain in force.

Along with its announcement of the re-filed regulations, DOER released a draft guideline for qualified Solar Carve-Out units seeking an extension of the December 31, 2013 construction deadline.  Under the regulations, in order to qualify for the Solar Carve-Out, a solar project must be completely installed and receive authorization to interconnect from the local distribution company by December 31, 2013.  If a project does not meet the December 31 deadline, it may receive an extension until June 30, 2014, if it can demonstrate that it expended at least 50 percent of its total construction costs by December 31, 2013. 

The draft guideline explains that DOER will only consider costs associated with building the generating units as construction costs, and will not take into account legal fees, permitting, or financing costs.  The guideline provides two alternative methods for calculating the total construction costs of a generation unit.  First, the owner or operator can multiply the solar unit’s direct current capacity by the corresponding dollar per watt cost, as set out in the table below.  Second, the owner or operator of the generation unit can provide DOER with actual demonstrated costs.  All eligible costs must be incurred no later than December 31, 2013.

No later than January 6, 2014, all generation units seeking an extension must submit their applications for extension to DOER. DOER will notify applicants of its decision within 30 days.

Finally, if a project can demonstrate that it is ready to begin operations and is only waiting for a distribution company to issue its authority to interconnect, the interconnection deadline is extended indefinitely.

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