Net Metering Agreement & Impressive Cost Savings

Between 2014 and 2016, the City signed net-metering agreements with three solar farms in Massachusetts. For 20 years, the farms will transfer the net-metering credits (i.e. financial value associated with generated electricity) to the City's 20 electrical accounts. The electrical rates are discounted, saving City money, and also help support the development of the solar arrays by committing to purchase the net metering credits before the facilities' construction.

1st Municipal Net-Metering Agreement

Brimfield Solar FarmOn June 24, 2014 (as amended December 10, 2014), the City executed a Solar Net Metering Agreement with SH Solarne2 LLC. The agreement is to purchase approximately 5,000,000 kWatt-hours per year over 20 years from a solar array in Brimfield and to allocate the associated net metering credits across 6 municipal facilities.

SH Solarne2 LLC is transferring its net metering credits to selected Worcester’s electrical accounts, and Worcester then pays SH Solarne2 LLC for the electricity at a 28% discounted price off of G-1 electrical rate, resulting in estimated*:

  • Combined Average Annual Savings  - $220,000+
  • Combined Total Savings (20 years)  - $4,400,000+

Consequent Municipal Net-Metering Agreements

Peterson Road Solar Farm in PalmerIn the spring and summer of 2016, the City executed two Solar Net Metering Agreements with Nexamp, Inc. to purchase net-metering credits from solar farms in Palmer and Rutland, MA. These credits are applied to the DCU Center and 11 Department of Public Works and Parks facilities. The discounted price from the 7,500,000 kWatt-hours of electricity is 30.5% off of the G-1 rate.

The cumulative savings for the City from these projects are estimated* at:

  • Combined Average Annual Savings - $490,000+
  • Combined Total Savings (20 years) - $9,800,000+

Agreement With:

Solar Farm’s Capacity:

% Electricity Net-Metered to the City:

Peterson Road Solar, LLC (Nexamp, Inc. affiliate) - signed April 20, 2016

3.58 MWs

76 % (approximately 3 MWh of the estimated 4 MWh annual production).

Golden Hills Solar, LLC (Nexamp, Inc. affiliate) - signed June 29, 2016

6 MWs

59 % (approximately 4.5 MWh of the estimated 7.7 MWh annual production)
* Estimates are based on current utility rates, expected utility inflation, and expected solar production.

Golden Hills Solar Farm in Rutland

Net metering explained

Net metering is an incentive program authorized by Massachusetts legislation aimed to encourage customers to install distributed generation. Renewable energy generated by a utility customer can be sold back as a credit ($$).
  • Net Metering is the process of measuring the difference between generated electricity on-site and electricity used on site (i.e. that delivered by electric utility).
  • A Solar Net Metering Facility is a facility for the production of electrical energy that uses sunlight to generate electricity and is interconnected to a distribution company (i.e. NGrid in Worcester).
When electricity is generated on a commercial scale, the solar net metering facility can choose to allocate the electricity it produces to another electrical account in the same electricity load zone. (Worcester is in the Western/Central MA ISO-NE zone.)

Renewable Energy Certificates

It must be noted that Worcester is purchasing the solar farm's electricity, but not electricity's green attributes (i.e. via solar renewable energy certificates, aka SRECs.) SRECs are sold separately by the solar developers at the green markets to assist with financing the projects.