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Why Are Utility Companies Supportive of Solar?

March 1, 2024 | Reading Time: 6 minutes

Using solar energy reduces how much we rely on the electrical grid. So, you might be wondering why many utility companies encourage people to adopt solar systems. Doesn’t this create more competition for them? The answer is yes, but it’s not a big problem in their eyes. In fact, solar energy is providing them with some relief.

Electricity: A Never-Ending Need

We depend on electricity so much that the electrical grid and local utility companies can’t keep up with our growing demand. Especially during peak electrical usage times, electric companies have to choose between building or re-opening costly power plants, or using energy from private sources like solar panels. The latter is much cheaper and therefore, a big reason why utility companies are willing to pay people for their solar power. It makes more financial sense for them to implement incentive plans that compensate people for sharing their excess solar energy than to manage and maintain entirely new power plants.

Aiming for Net-Zero

Companies care about their public image and try to look good by showcasing how environmentally friendly their operations are. One popular way to portray this is by claiming they are “net-zero” in carbon emissions. This means that they do not release a surplus of carbon dioxide into the atmosphere during a set period of time.

But this claim is a bit misleading. Just because a company states they’re net-zero doesn’t always mean they didn’t make any carbon emissions. Wealthy companies can balance out the carbon they make by buying the same amount of renewable energy and therefore achieving a “net-zero” status.

This practice is pretty standard for utility companies who often have to meet renewable energy production baselines enforced by their local government. Therefore, solar incentive programs allow them to purchase the necessary energy so they can meet their renewable energy quotas while still producing non-renewable energy.

Solar Isn’t for Every Building

Not all buildings can host solar panels. Whether it’s because they aren’t positioned in the sun, are surrounded by too many trees, or aren’t stable enough to support the system, there will always be buildings that rely on the electrical grid for energy.

This is the main reason why utility companies aren’t too worried about the growth of the solar industry. If anything, they’re appreciative of the slack it’s cutting them.

However, if the world ever gets to a point where solar energy accounts for a significant portion of our electricity generation, their opinion may change. But for now, they’re happy to support it and we encourage you to take advantage of the financial perks they’re offering to solar adopters.

What Benefits Do Utility Companies Offer for Using Solar Energy?

Incentives that involve the selling of renewable energy back to the electrical grid in exchange for a rebate or energy credits are funded through utility companies.

Available solar incentives vary by state. As of 2024, the Massachusetts utility-driven incentives include net metering, ConnectedSolutions, RECS, and SMART Program. In Rhode Island, there is net-metering, ConnectedSolutions, and the REG program.

Net Metering

Most solar energy systems generate an excess of electricity beyond the requirements of individual homes. With net-metering, owners of solar systems can sell the surplus energy back to their utility companies and earn credits on their utility bills.

Learn More: Net Metering in MA

Learn More: Net Metering in RI

ConnectedSolutions

ConnectedSolutions incentivizes homeowners to share energy from their batteries with the electrical grid. The program offers $1,000 per battery per year for five years. As a homeowner, you can expect to earn around $5,000 per battery. There is no limit to the number of batteries you can have.

Learn More

Renewable Energy Certificate (RECs) Program

The Renewable Energy Certificate program offers indefinite quarterly payments to homeowners willing to sell their renewable energy on an open market.

Companies purchase renewable energy for a demand-based cost.

Learn More

Solar Massachusetts Renewable Target (SMART) Program

Massachusetts’ SMART program is like RECs. It enables homeowners to receive compensation from their utility company for each kilowatt-hour of solar power generated over 10 years.

Renewable Energy Growth (REG) Program

The REG Program is for residential and commercial property owners willing to sell all their renewable energy to the grid. At the end of the month, an energy surplus or deficit is calculated by subtracting the amount of consumed electricity from the amount sold. The customer will be compensated or billed respectively.

Learn More

Differing Policies

Utility companies may have differing policies when it comes to available incentive programs. Make sure to verify your eligibility with your solar installer before planning for these financial incentives.

Isaksen Solar: The Insider

As a reputable and local solar company since 2017, Isaksen Solar has built strong relationships with every RI and MA regional utility company. We’re well-aware of their distinctions and policies so you can rest assured that we’ll be able to answer any questions you have set you up for the highest return on your solar investment.

This is not a one-size fits all procedure. We’re here to provide you with individualized support from the first day your reach out to us until your panels are taken off your property. We’d be happy to answer your questions and get you started on the first few steps. Give us a call, (508) 717-3820, or sign up for your free, no obligation quote.