Net Metering Agreement & Impressive Cost Savings

On June 24, 2014, the City executed a Solar Net Metering Agreement with SH Solarne2 LLC (and amended December 10, 2014). This Agreement not only saves the City money but helped support the development of the solar array by committing to purchase the credits produced.

The agreement is to purchase approximately 5,000,000 kWhs per year over 20 years from a solar array in Brimfield and to allocate the net metering credits across 7 municipal facilities (City Hall, Union Station, Main Library, Senior Center, 25 Meade Street, Lake Avenue pumping station, and one of the larger street light accounts).

The anticipated savings is 28% or $220k per year for the next 20 years, or $4,400,000 in total savings!

The 20-year agreement was executed in June 2014 and amended in December 2014 so that the City now purchases 100% of the electricity the solar farm generates.

Worcester does not purchase RECs from SH Solarne2 LLC, so the City does not benefit from the renewable aspect of the electricity. To fund a portion of this project, SH Solarne2 LLC is selling the RECs created from generated electricity on the green power market. However, by being a stable client to this solar farm, Worcester is supporting local renewable energy generation.

While this is the City’s first solar net metering credit agreement, it will not be the last. The state and federal financial incentives aligned with the City’s commitments, in the region where electrical prices keep increasing due to the deficit of natural gas, make this a very attractive deal that can save hundreds of thousands of dollars a year for the taxpayers.

Net metering explained

Net metering is an incentive program aimed to encourage customers to install distributed generation. Renewable energy generated by a utility customer can be sold back as a credit ($$). When electricity is generated on a commercial scale, such as with the solar farm in Brimfield, the facility can choose to allocate the electricity credits it receives to another utility account in the same electricity load zone. (Worcester is in the Western/Central MA zone.)
This is the case with the agreement between the City of Worcester and SH Solarne2 LLC; SH Solarne2 LLC transfers its credit to Worcester’s utility account, and Worcester then pays SH Solarne2 LLC for the electricity at a discounted price.