Renewable sources of heat will qualify for incentives under new Mass. law
Credit: Jon Chesto, Managing Editor, Print | Boston Business Journal | Sep 3, 2014 | www.bizjournals.com ~~
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Massachusetts’ generous incentives spurred a wave of solar panel construction that has made this state one of the hottest places for solar electricity in the country.
We might soon see the same type of success with renewable heating devices and technologies, now that the Legislature has added “renewable thermal” to the state’s official list of favored energy sources.
Policy makers and regulators have focused their attention on renewable electricity projects for years. But they have done very little to encourage projects that use renewable energy for heating or cooling.
Among the incentives long provided by state lawmakers is a mandate that electric utilities buy a certain amount of their electricity from renewable sources, such as windmills, biogas plants and solar arrays. Thanks to a bill signed into law by Gov. Deval Patrick last month, certain renewable heating and cooling sources will now qualify for a similar incentive as of Jan. 1. These technologies will qualify for what are known as “alternative energy credits,” which the state requires electric utilities to purchase or face a financial penalty. Utilities are already paying millions of dollars in penalties to the state because there aren’t enough credits to purchase – right now, essentially only combined heat-and-electric plants are qualifying – so adding renewable heat to the mix isn’t expected to cause electric rates to rise.
The state Department of Energy Resources is now charged with writing the rules for this new system. It won’t be an easy task given that these heating and cooling credits need to be translated into something that works for electricity companies. (Until now, electric utilities just purchased credits for renewable electricity.)
Charlie Niebling, a consultant with Jaffrey, N.H.-based New England Wood Pellet who helped organize energy businesses’ support for the bill, says he expects the legislation will help spur increased demand for wood pellets. Eventually, he says, wood pellets could shift from being a niche fuel for certain big commercial users to a more mainstream heating option. This is particularly important, he says, for potential customers that aren’t near a natural gas pipeline and need to rely on expensive heating oil.
David O’Connor, a lobbyist at ML Strategies who advocated for the legislation at the State House, says the bill’s origins can be traced to Gov. Deval Patrick’s Department of Energy Resources. Administration officials, he says, realized that the state’s ambitious carbon-dioxide reduction goals would be tough to reach if oil heat isn’t addressed. The traditional focus on cleaner power plants just wouldn’t be enough. DOER hired Meister Consultants, which suggested in a 2012 report that some form of state incentive could be created to help spur the adoption of renewable heating and cooling technologies.
O’Connor, the state’s energy resources commissioner from 1995 through 2007, says that the final bill reflects negotiations with environmentalists to assure them that biomass-fueled heat would be highly efficient and use sustainable forestry practices. (The company that Niebling advises, for example, uses discarded wood products for its pellets.) Other types of heat sources that could qualify include solar-heated hot water, geothermal systems, and methane gas released from landfills. As with solar, O’Connor says it would be the fuel providers and installers who would sell these credits, and then use the revenue to help lower costs for their customers.
The bill was passed in the final hours of the Legislature’s two-year formal session, in part because it was used as a vehicle to move a more pressing measure to keep an important solar incentive known as net metering from expiring. Solar electricity may seem to get all the love on Beacon Hill. But now there’s another kind of renewable energy that’s getting its own moment in the sun.
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