Massachusetts rolled out a new incentive last year to spur solar and energy storage adoption, but installers are worried that a technical requirement could foil the goals of the program.

The Solar Massachusetts Renewable Target (SMART) pays residential and commercial customers for solar electricity production. The program is intended to add another 1,600 megawatts of distributed solar capacity, forming a core pillar of Governor Charlie Baker's ambitious clean energy agenda.

To help mitigate the effects of more intermittent generation, which is already materializing as a regional "duck curve," the state's Department of Energy Resources added a bonus for systems that have energy storage attached.

“Now you can have that solar stay onsite and be used later in the day, and reshape the duck from behind the meter,” DOER Commissioner Judith Judson said of the storage adder in a 2018 interview.

To qualify, though, customers have to pay for a new utility meter to measure their production, and that can cost hundreds of dollars. Some types of solar-plus-storage configurations drive the price up even further.

The extra cost eats into the incentive dollars that are supposed to pay for clean, dispatchable electricity, a group of installers argued in a June 21 letter to DOER, which designed the program. The authors included national companies Sunrun and Vivint, as well as regional installers ReVision Energy, SunBug Solar and Trinity Solar.

"The SMART storage adder was intended to bridge the gap between the cost of storage and the market revenues for which storage is currently eligible," the installers wrote. "Ratepayer funds for SMART were not intended to go toward redundant utility metering costs. Ultimately, this leads to less and much more expensive storage being deployed under SMART."

Those companies have asked DOER to amend the requirement and allow certain advanced inverters to play the role of tracking solar generation for the program, instead of the utility-provided meters. Other jurisdictions have adopted similar measures for their own compliance rules.

For utilities, this comes down to technological comfort levels. They need to track solar generation for accurate compensation, and revenue-grade meters are proven tools for that job. They add cost, but it's only a few hundred dollars for most solar customers — provided they don't ask for a more complex battery-paired system.

"Even though certain inverters may have the capability to monitor SMART system production, utilities may still prefer to rely on third-party meters to attain this data," noted Molly Cox, who tracks inverters at Wood Mackenzie Power & Renewables.

At issue is just how big an obstacle the metering cost poses for customers — whether it merely cuts into installers' margins, or impedes the growth of the market that it's meant to incubate. Also contested is whether Massachusetts utilities can trust alternate metering techniques.

But if the installer claims are accurate, the status quo rules could stop SMART from fulfilling its intended purpose of boosting storage-paired solar on the increasingly renewables-heavy Massachusetts grid.

Disagreement over meter costs

Nobody denies that the incentive program, as currently designed, requires participants to buy a new meter.

"The SMART program does require the participating customer to pay for the additional PV meter to record the solar production used to compute the monthly incentive payment," said Reid Lamberty, a spokesperson for utility Eversource, in an email. DOER published a slideshow illustrating the possible metering configurations for different types of installations.

But there is disagreement about just how much of an expense the requirement entails.

According to Eversource, the largest of the three distribution utilities participating in SMART, 95 percent of customers need to pay $200 for a standard meter. Larger commercial-scale systems may require an $850 meter.

The letter from the solar installers, though, refers to utility proposals that reach up to $1,700 per residential customer, and others that cost up to $780 per customer.

Across the utilities, the average metering cost for customers will be around $400, Vivint public policy manager Kyle Wallace wrote in an email. That includes the meter cost, additional equipment and labor costs for the installer to prepare for the meter, and the SMART application fee.

"A $400 cost is still fairly significant, as it is increases costs by $0.05 to $0.06 per watt, making solar more expensive for customers," Wallace said. "These upfront costs effectively reduce the actual incentive value of the SMART program to customers and third-party owners."

Special premium for a certain type of project

The real controversy around the metering requirement centers on DC-coupled storage systems, in which solar and storage use one inverter. Those are the ones that face a steep $1,700 metering cost, Wallace noted. That level of expense threatens to zero out a considerable portion of the incentive value.

Installers say such DC-coupled systems are the preferred option for residential storage. This design streamlines installation and reduces power conversion losses compared to designs with separate inverters for solar and battery (known as AC-coupled). However, DC-coupled designs require a more complicated metering setup, driving up the cost precipitously.

Lamberty later acknowledged in a phone call that Eversource has quoted a metering package in the $1,700 price range. He said it was a "rare exception" designed to accommodate custom configurations requested by solar contractors. The company does not track exactly how many inquiries have been made about DC-coupled designs, he noted, but it has received a handful of inquiries over the last year from larger solar contractors.

Even if the number of inquiries has been small, DC-coupled storage has a significant role to play in the solar-plus-storage market, according to Sunrun, the largest residential solar installer. The company has installed more than 5,000 home batteries in the U.S. so far.

"The vast majority of those battery systems use DC-coupled technology, like LG Chem, with Massachusetts being no exception," said Evan Dube, Sunrun's senior director of public policy for the Northeast. "Given national and local trends, we would expect that DC-coupled batteries could make up more than half of the Massachusetts residential market.”

This raises a question about data collection.

Most SMART customers only get solar. Storage-paired systems account for 2.9 percent of SMART installations statewide, based on selection of the Energy Storage System adder in the application, Lamberty said. By those numbers, the simple, cheaper meter would naturally dominate the vast majority of cases.

The solar installers, however, suggest that DC-coupled systems would be the market's preferred approach to residential storage, but that they have held off on selling them due to prohibitive metering costs. In other words, the expensive metering quote deterred additional applications or inquiries.

Based on that account, the seemingly small number of inquiries for the $1,700 metering setup could reflect a stalled market rather than a lack of consumer interest.

Are inverters just as good?

Any responsible incentive program needs to verify that recipients follow the rules. At issue in the Massachusetts debate is whether or not revenue-grade meters offer the only or the best way forward.

The market leader for U.S. residential solar inverters, SolarEdge, says it could provide trustworthy metering without requiring the purchase of a separate device.

The company, which supplies major solar installers like Sunrun, offers an optional built-in revenue-grade meter that meets the ANSI 12.20 accuracy certification, spokesperson Jessica Fishman confirmed in an email. That upgrade costs extra, but eliminates the effort and time required to install a separate meter.

"SolarEdge meters can provide metering data with the same degree of accuracy as a utility meter," she said.

To bolster their case, the solar installers listed all the other jurisdictions and programs that accept advanced inverter metering to measure solar production. It's not a shabby list.

California's Self-Generation Incentive Program, the most widely used subsidy for customer-sited storage, accepts built-in metering data for verifying small-scale storage activity (see this PDF, Section 5.5). New York's NY-Sun incentive accepts inverters to track production, as does Pennsylvania's SREC program and Illinois' Adjustable Block Program.

ISO New England, which operates the wholesale markets that serve Massachusetts and its neighbors, enrolls solar resources as peak demand resources. Instead of specifying separate meters, "The requirements are technology-agnostic and governed by accuracy and certification parameters," the letter notes.

But Eversource does not share those other states' confidence in an inverter-based approach.

"Engineers from the utility and solar industries have been working on trying to develop a less expensive or acceptable alternative for several years," Lamberty said.

Asked whether Eversource would be open to an inverter-based accounting protocol, Lamberty responded: "We do not bill using customer-reported data from customer-owned meters."

Top residential solar installer Sunrun doesn't see evidence supporting that trust gap.

"The reality is that smart inverters are revenue-grade today and used in other circumstances, so there is no necessity for a utility-grade meter — it’s just a residue of how things have been done in the past," Dube said.

"The inverter will be there anyway, so it’s more efficient both in the monetary aspect and the overall logistics of running the program."

Missing from this conversation, at least in public, is the Department of Energy Resources itself, which will have to decide whether a rule change is merited.

"DOER is aware of the concerns raised in regards to proposals to meter specific PV and energy storage configurations, and is engaging with utility and industry stakeholders to reach a workable solution," spokesperson Katie Gronendyke said in an email Monday.

The department declined to comment further on specifics at this time.