Massachusetts new state solar incentive program that will take effect in 2010, it will create and sustain solar industry growth of 30% per year for the foreseeable future. Good news for existing solar companies, entrepreneurs looking to enter the space and college graduates that want to save the world.

Here’s the skinny. The solar photovoltaic (PV) industry is mainly driven by government incentives. There is currently a 30% federal tax credit for solar PV installation and then state governments have incentives in addition to the federal incentives. Both these incentives eventually cover between 60 to 80 percent of the cost of installing a solar power system. These incentives are needed to make installing a solar PV financially attractive.

Needless to say, state incentives are very important for the industry and are driving it forward.

2 months ago, Commonwealth Solar, the state’s first incentive, ran out of money.

On Friday December 18th I participated in a webinar hosted by the Dept. of Energy Resources (DOER) that explains what the new incentives will look like.

Government incentives can get complicated with all the policy, accounting mum-bo-jumbo but let me try and break it down.

1. The government will establish a Renewable Energy Portofolio (called an RPS) on utilities, the people that provide all the power. An RPS makes a utility purchase a certain amount of the power they sell from renewable sources. The Massachusetts government has created a Solar RPS, which will force utilities to purchase a certain amount of energy specifically from solar. This creates demand for solar energy in the market.
2. In order to prove that they have met the Solar RPS they must have whats called a Solar Renewable Energy Certificate or an SREC. SRECs are given to those who own solar systems and are generating electricity. If you have a solar PV system on your house you will have SRECs to sell. Thus, the demand for SRECs is created by the Solar RPS (madated by the state) and the supply of SRECs is created by more solar PV systems being installed and generating electricity. The price of SRECs is set at an open auction.
3. If a utility doesn’t meet the Solar RPS they must pay an Alternate Compliance Payment (ACP) to the state. The ACP is set by the government and is a way of increase the market price for an SREC because utilities will purchase SRECs in the open market as long as they are cheaper then the ACP.
4. Thus, the government can create a demand for solar by creating and changing the RPS while they tweak the amount of demand by changing the ACP.

In the webinar, the Massachusetts Department of Energy Resources stated that they will be tweaking the RPS and ACP every year to increase demand for solar PV systems by 30%. Good New for local installers, innovators, career changers, and college graduates.

If you want to find the specific details about Massachsuett’s state solar incentives from the DOER you can find the information here.

If you’re need resource to help find a job in the renewable energy industry see The Secret Weapon to Find a Job Installing Solar Systems or 9 Places to Find a Job in Renewable Energy to find companies in Massachusetts that will benefit from this growth.

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About Chris Williams

Chris Williams is the editor of Green Light Distrikt and Chief Marketing Officer at HeatSpring . He has experience in business development, prototyping and new venture research with a focus on geothermal heat pumps, solar thermal and solar photovoltaic technologies. Chris is an IGSHPA accredited geothermal installer and NABCEP certified solar installer. Chris is focused on solving customer facing issues in the creation and adoption of clean energy technologies and products. Chris has installed over 300kW of solar and tens of geothermal systems. He's invented the PV Pal , developed many trainings at HeatSpring, publishes the NABCEP Study Guide , the Hitchhikers Guide to Cleantech and has done due diligence research for Urgent VC . Feel free to connect with him @topherwiliams , on Linkedin , or through email about new ventures, collaborating, writing, research or whatever is on your mind.

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