Net Metering Agreement & Impressive Cost Savings

On June 24, 2014 (as amended December 10, 2014), the City executed a Solar Net Metering Agreement with SH Solarne2 LLC.

The savings of 28% off the regular electrical rate (G-1) or about $220K per year for the next 20 years will lead to approximately $4,400,000 in total savings for the City.

The agreement is to purchase approximately 5,000,000 Wh (i.e. 5MWh) per year over 20 years from a solar array in Brimfield and to allocate the net metering credits (i.e. the electricity) across 6 municipal facilities:

This Agreement not only saves the City money, but it also helped support the development of this solar array by committing to purchase the net metering credits before the facility construction.

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.) To fund this project, SH Solarne2 LLC is selling SRECs on the green power market.

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 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, such as with the solar farm in Brimfield, 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.)
This is the case with the agreement between the City of Worcester and SH Solarne2 LLC; SH Solarne2 LLC transfers 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!