In the Northeast United States, homeowners and businesses use a lot of energy to heat (and cool, but mostly heat) their buildings and a new bill, waiting for Massachusetts Governor Patrick’s signature, means that more renewable energy technologies will be used to do that heating and cooling.

The renewable thermal bill awards alternative energy credits (AECs) to heating and cooling that is created with renewable technologies such as solar heating, geothermal and air source heat pumps, biofuels and wood pellets, wood chips, renewable bio-oils or renewable natural gas. AECs are needed for Massachusetts’s utilities to meet their Alternative Portfolio Standard (APS), which up until now, could only be met through combined heat and power, flywheel storage, coal gasification and efficient steam technologies (like harnessing waste heat). In 2014, the APS required that 3.5 percent of the electric load be met with alternative energy. The number increases by 0.25 percent each year.

Despite the prevalence of natural gas availability, the Commonwealth of Massachusetts uses 800 million gallons of heating oil each year, according to Charlie Niebling, chair of the Massachusetts Renewable Thermal Coalition. Niebling explained that the legislature realized it would need to include thermal renewable energy if it is to reduce emissions enough to meet the levels required in the Massachusetts Global Warming Solutions Act.

In neighboring New Hampshire, which was the first state in the nation to pass a thermal renewable energy carve out, renewable heating and cooling output is metered, measured, verified and reported to the Public Utilities Commission, where it is certified and then turned into thermal renewable energy credits (RECs). “Once it is certified thermal RECS, then you have something that has value,” said Niebling. In NH the specific value of thermal RECs have not yet been determined because rulemaking has just been completed and a market for them has not been established yet. Just like SRECS, the value of thermal RECs is a function of supply and demand.

For Massachusetts, Niebling estimates that the total value of AEC’s will be between $12 and 30 million. He bases that figure on AECs being sold for between $20 and $28 per MWh. “[The Massachusetts] APS has been operating in a supply deficit so that value of credits is quite high,” said Niebling, adding that the Massachusetts Department of Energy Resources is “very supportive of thermal.”

The Beginning of a Trend?

Members of the Coalition for Renewable Heating and Cooling worked for more than 18 months to get the bill passed in Massachusetts and they hope that now that two states have a thermal renewable energy requirement on the books, others will fall quickly. “We are hoping this is the beginning of a trend of states recognizing parity [of heating and cooling with electricity] in their portfolio standards” said Niebling, who thinks New York could be another state take similar action. New York is the number one importer of heating oil, said Niebling and that state could pass an RPS through the public utilities commission. “It doesn’t take an act of legislature,” Niebling explained.

Once signed by the governor, the Massachusetts law will go into effect on January 2015 but Niebling thinks another year may be necessary to work out the logistics. In NH, the bill was passed in the summer of 2012 and rulemaking has only recently been finalized, according to Niebling.

Lead image: Wood Pellets and Calculator via Shutterstock