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Big changes in Massachusetts: An interview with Dan Berwick of Borrego Solar on recent changes to the state's solar policy

Dan Berwick
Dan Berwick

Dan Berwick is Borrego Solar’s Vice President of Strategy and Business Development, and works out of Borrego's Massachusetts office. Dan’s primary focus is on shaping Borrego Solar’s business strategies and product offerings across various geographic markets and solar incentive jurisdictions, with a particular focus on guiding Borrego’s SREC market participation.

Prior to joining Borrego Solar, Dan worked on renewable energy policy reform at the Texas House of Representatives. He’s also worked in the utilities practice area at The Brattle Group, an economic consulting firm, and he supported Federal policy efforts for the Pew Center on Global Climate Change.

This interview followed the Massachusetts Office of Energy Resources (DOER) announcement of both emergency and new regulations affecting the state's solar carve-out, as we reported on June 7th, 2013.

Solar Server: Can you give a brief overview of what happened at the Massachusetts DOER meeting on July 7th?

Dan Berwick:
There were two things: they put out a straw man for the regulation that will expand the program from 400 MW to 1200 MW, but they also intervened in what was a rush on the current 400 MW program.

Many months ago DOER announced the intention to create a more robust qualification process for projects in the existing 400 MW program, but in the run-up to when that more robust qualification process got implemented, everyone with a project in the queue rushed to get their project in under the current lower standards for qualification to generate SRECs. Which is a very rational thing to do, to apply under the more lax standards before the tighter standards are implemented.

And that created a run on the 400 MW program such that a lot of projects that really need SRECs and belong in the program were shut out, and a lot of projects that are more speculative and may never get built, and if they do get built belong in the follow-on program, got put in the 400 MW.

So DOER was faced with the task of rationalizing that, and their approach to doing that was what they did in the first ½ hour of the meeting on Friday.

Solar Server: So in terms of both the emergency regulation and the draft of the new regulation, what do you think are the most critical aspects for the solar industry?

Dan Berwick:
So in the draft of the new regulation, the most critical thing is the path forward for further incentivizing 1200 MW, a 3x increase in the program. And just as importantly, the program does that in a way where the incentive reduces over time, and ratepayers and the industry know together that the incentive program between now and 2020 will be converging with the Class 1 incentive program. This is really delivering on the promise of the solar carve-out to begin with, which is to provide a subsidized pathway to the point where solar is competitive with other sources of generation and other renewables.

So it really laid out a pathway to get that done over the next seven years.

The driver for the emergency regulation was a real crisis for the industry. If you are in a situation where well-developed projects are in the planning or construction phase and can't get into the program, that's a serious, that's a major disruption in the program. So with the solar industry doing so well in Massachusetts and growing, that kind of disruption would be really bad.

DOER worked hard in a responsible way to alleviate that problem and get that train back on track, and I think they did a good job.

Solar Server: So in terms of the mechanism for the next 1200 MW, I noted that projects are being offered mixture of the new SREC IIs and Class 1 SRECs, with the amount of SREC IIs diminishing over time. What are your initial thoughts on that mechanism and how effective do you think it will be?

Dan Berwick:
It's really interesting and there is a lot to recommend it. I think it is one way that appears to be a sound, efficient mechanism for delivering incentive dollars to over 1 GW of solar projects, in an efficient way which diminishes them over time, and still allows the market to understand pretty well what incentive dollars are available and allowing the industry to move forward with financing multi-million dollar investments.

That said, we haven’t seen the draft regulation, and it is certainly a case where there will need to be a process of public comment and revision so that the whole stakeholder community can weigh in. It's a somewhat complex mechanism, so it's really important that the whole stakeholder community have a chance to engage in the dialogue about what some of the concerns are and how those concerns could be addressed in the drafting of the regulation. So there will be a back-and-forth among the stakeholder community and DOER so that we are sure that we are putting forward a system that works.

It is very interesting, but it definitely needs some close scrutiny and work in the formation process.

Solar Server: What do you expect the overall impact of these regulations to be?

Dan Berwick: I think as long as they get implemented on relatively quick time-lines, I expect the impact to be the continued, relatively smooth function of the Massachusetts solar program.

These are both absolutely mission critical pieces of the project, of keeping the stable momentum going in this market. That's why the auditorium was so packed on Friday (June 7th).

Solar Server: Massachusetts was ranked as the sixth largest PV market in the US in 2012. What do you see for the future of Massachusetts solar market?

Dan Berwick:
The slide that DOER showed us on Friday shows a pretty clear picture, which is consistently maintaining the level that we are at. We have a 150 MW per year market, and DOER is trying to create a program where we will slowly climb at 150 - 200 MW. And I think DOER is trying to keep it right there.