In 2008, Governor Deval Patrick enacted an increase to Massachusetts’ renewable portfolio standard (RPS). The new mandate set a one percent annual increase in the original RPS requiring utilities to supply four percent of their electricity sales from renewable sources by 2009. Now, eligible renewable sources, installed after 1998, must represent 25 percent of state utility electric sales by 2025.
Qualifying sources are divided into Class I and Class II sources. Class I sources include: solar; wind; ocean thermal; wave; tidal; fuel cells using renewable fuels; landfill gas; new hydroelectric facilities; energy from increased capacity or efficiency; low emission biomass; marine or hydrokinetic; and geothermal energy. Class II sources include systems operating before 1998 that generate electricity using solar, wind, ocean thermal, wave or tidal energy; fuel cells utilizing renewable fuels; landfill gas; energy generated by certain existing hydroelectric facilities up to five megawatts in capacity; low-emission advanced biomass power conversion technologies using fuels such as wood; by-products or waste from agricultural crops, food or vegetative waste; energy crops; biogas; liquid biofuels; marine or hydrokinetic energy; or geothermal energy.
Beginning in 2010, utilities are required to meet a portion of the Class I standard with electricity produced from qualified in-state, interconnected solar facilities or Solar Carve-Out Renewable Generation Units.
There are two minimum carve out standards for Class II renewables. Beginning in 2009, Class II renewables must account for 3.6 percent of kilowatt hours (kWh) of their annual customer sales A second Class II waste energy carve out sets a 3.5 percent per kWh standard.
Utilities may meet the requirements through buying and selling of renewable energy certificates (RECs) or an alternative compliance payment (ACP). The ACPs for Class I, Class II, Class II waste, and solar fluctuate annually based on the Consumer Price Index of the previous year. The Massachusetts Department of Energy Resources (DOER) can decrease the solar ACP if market conditions warrant, but the decrease will not exceed more than 10 percent in any year.
The 2010 ACP rate is $60.93 per megawatt hour (MWh) for Class I, $25 per MWh for Class II, $10 per MWh for Class II waste, and $600 per MWh for solar.
Massachusetts also established an Alternative Energy Portfolio Standard (AEPS), which requires the state to meet 25 percent of its electric load with demand-side management resources, and 20 percent with alternative energy. Utilities must enter into long term contracts (10-15 years) for renewable energy or RECs by 2014.
Source: Database for State Incentives for Renewables and Efficiency