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Energy Incentive Programs, Massachusetts

Updated November 2009

Below you will find questions and answers regarding Massachusetts' utility energy efficiency programs, including options for load management, demand response, and distributed energy resources, and information about state-sponsored energy efficiency programs.

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What public-purpose-funded energy efficiency programs are available in my state?

Massachusetts comprehensive legislation on electricity restructuring includes a non-bypassable demand side management surcharge of 2.5 mills/kWh for energy efficiency programs. Almost $150 million was spent across all program types (including low-income and residential) for gas and electric initiatives in 2008. These funds are augmented, starting in 2009, by Massachusetts' portion of proceeds from both the Independent System Operator New England (ISO-NE) Forward Capacity Market (see below) and the northeastern states' Regional Greenhouse Gas Initiative (RGGI). The energy efficiency programs are administered by local utilities.

Rebates are available through two statewide programs sponsored by National Grid, NSTAR, Western Massachusetts Electric, Unitil, and Cape Light Compact:

  • The MotorUp (PDF 292 KB) initiative provides rebates for premium efficiency three-phase motors up to 200 horsepower. Rebates range from $45 to $700 depending on horsepower and enclosure type (open or closed).

  • The Cool Choice (PDF 305 KB) program provides rebates for high-efficiency HVAC equipment, including packaged air conditioners, air-to-air heat pump systems, and water-source heat pumps. Dual enthalpy economizer controls, demand-controlled ventilation, and electronically commutated motors (ECMs) for supply fans are also included in the program.

National Grid, NSTAR, Berkshire Gas, New England Gas, Bay State Gas, and Unitil all participate in the Gas Networks consortium, which sponsors rebate programs for high-efficiency natural gas furnaces, boilers, water heaters, and infrared heating equipment.

The Building Operator Training and Certification Program, sponsored by several utilities including National Grid, NSTAR, Bay State Gas, Berkshire Gas, Cape Light Compact, Unitil, and Western Massachusetts Electric, trains and certifies building operators to optimize the operations of their facilities.

In addition to these statewide programs, several utilities have their own programs:

National Grid offers a variety of electric efficiency services, all of which are organized under two initiatives:

  • Large Business Programs include:
    • Rebates for energy-efficient lighting, variable speed drives (VSDs), HVAC equipment, motors, compressed air systems, and other custom measures.
    • Technical assistance in identifying, implementing, and evaluating energy efficiency opportunities for new construction, renovations, and equipment replacement.
    • Competitive financing of energy-efficient equipment and projects.
    • Building commissioning to verify that newly installed systems are operating according to specifications.
    • Fixed low prices through the Buyers' Alliance for lighting materials, such as electronic ballasts, high-efficiency fixtures, and energy-efficient lamps, as well as recycling of old lamps and ballasts.

  • The Small Business Program pays 70% of the installation cost of the company's energy-saving improvements and finances the remaining 30% interest-free for up to 24 months. Energy-efficient equipment is available through this program, including lighting upgrades, time clocks, outdoor lighting photo cells, occupancy sensors, programmable thermostats, and walk-in cooler measures. The program is open to business customers with an average demand of 200 kW or less. Free energy audits are also offered.

National Grid's Business Energy Efficiency Services for Gas Customers offers several gas efficiency programs, including:

  • Prescriptive rebates are offered for common control measures, such as programmable thermostats, boiler reset controls, and steam traps.

  • High-efficiency gas-heating and water-heating rebates provide cash to help cover the cost difference between standard and high-efficiency gas space- and water-heating equipment, such as furnaces, condensing unit heaters, and direct fired heaters. Rebates are limited to 50% of equipment cost capped at $100,000 per project.

  • The Energy Efficiency Engineering Co-Funding Program offers cost sharing up to 50% (limited to $10,000 per project) for engineering studies aimed at improving efficiency of gas.

NSTAR provides a number of energy efficiency programs and services:

  • The Construction Solutions program provides commercial and industrial customers with rebates of up to 75% of the cost difference between standard and high-efficiency equipment as well as 90% of the incremental cost of comprehensive design services. Commissioning and cost sharing for engineering services are also available.

  • The Business Solutions program provides medium and large commercial and industrial customers up to 50% of total project costs in existing buildings, and up to 75% when comprehensive efficiency projects are implemented. Design and commissioning services, as well as cost-sharing of engineering services, are also provided within the program.

  • The Small Business Solutions program is available to commercial customers whose average monthly demand is 300 kW or less. It offers a free energy audit to identify energy-saving opportunities and may also pay up to 70% of the total cost for retrofitting qualified lighting and mechanical systems. Energy-saving measures include upgrades to energy-efficient lighting fixtures, electronic controls, and efficient HVAC and refrigeration systems.

  • In addition to the Gas Networks rebates described above, NSTAR offers a custom program that accommodates unusual technology options such as desiccant dehumidification and direct contact water heaters.

  • Vending machine occupancy sensors are eligible for $30 (non-refrigerated) to $75 (refrigerated) rebates through NSTAR's Vending Machine program (PDF 264 KB).

Western Massachusetts Electric (WMECO) offers a variety of programs and services, including:

  • Lighting rebates are available to commercial and industrial customers through the Express Service Lighting program. The program pays a fixed amount for installing T-5, high-performance T-8, CFL, and pulse-start metal halide lamps, along with LED exit signs and lighting controls, as part of retrofit projects. Rebates are limited to $20,000 per year per customer location and cannot exceed total cost of equipment.

  • Reimbursement for the cost of an energy audit or focused energy study is available to larger customers through the Energy Audit and Focused Study program. Fifty percent of the study is reimbursed up front with the other half paid out upon installation of suggested measures (which may be eligible for rebates of 50% to 100% of their incremental cost over standard efficiency alternatives).

  • The Small Business Energy Advantage program provides cost-effective turnkey energy-saving products and services for customers with average peak demand between 11 and 200 kW. WMECO will pay up to 35% of the costs for eligible cost-effective, energy efficiency installations. The program also offers a 0% pay-from-savings financing option.

  • WMECO's HVAC program complements the Cool Choice program (see above) by providing one-half of the cost of a study of a facility's related systems up front and the remaining 50% following the installation of the recommended energy-saving measures. Customers considering the replacement of individual direct expansion units of up to 30 tons or new systems over 100 tons are eligible. Rebates are limited to $5,000 per customer site per year.

  • The New Construction and Major Renovations program provides design consulting services and reimburses customers for a significant portion of the difference between standard and energy-efficient equipment installed in new construction projects or major renovations.

Unitil also offers a number of energy efficiency services, including:

  • The Small Business Services program provides small commercial customers (average demand less than 100 kW) with a free energy audit, an energy efficiency project proposal, and firm commitment on incentives for equipment such as lighting, efficient motors, refrigeration, and customized projects.

  • The Large Business Services offers financial and technical services to commercial, industrial, and institutional customers building a new facility, undergoing a major renovation, or replacing old and inefficient equipment. Prescriptive and custom incentives are available to cover either 50% of project cost or pre-approved amount covering the incremental cost of the efficient equipment. Prescriptive measures include lighting conversions and controls, energy-efficient motors, and custom applications. Design assistance, audits, and commissioning are also available through the program.

What utility energy efficiency programs are available to me?

Energy efficiency programs offered by Massachusetts utilities are outlined in the previous section.

What load management/demand response options are available to me?

The Independent System Operator New England (ISO-NE) offers demand response programs that provide payments to electricity users for load reductions (of as little as 100 kW) either by reducing usage or by operating on-site generation during periods of high demand. Customers may participate in the program through any participating member ("Enrolling Participant") of the New England Power Pool, such as a utility company, power marketer, competitive energy supplier, or independent curtailment service provider (CSP). The enrolling participant is allowed to aggregate load to reach the quantity qualification limit, so customers interested in these programs with less than 100 kW to offer may want to contact their utility or other eligible party.

ISO-NE offers several options:

  • The Real-Time Demand Response Program provides an opportunity for customers to receive payments for voluntarily responding to system emergencies. Participants are paid for actual load reductions, based on the higher of the real-time zonal price or a guaranteed floor price ($350/MWh for customers that can respond within 2 hours and $500/MWh for those that can respond within 30 minutes). Participants may receive additional incentives by qualifying as an installed capacity (ICAP) resource for their load reduction capacity, although response to system emergencies then becomes mandatory. In order to facilitate notification of emergency events and verification of load curtailments, customers must have an approved Internet-Based Communication System (IBCS) installed. Participating customers must also have interval metering installed at their facility.

  • The Real-Time Profile Response Program provides remuneration to customers without interval metering for voluntarily responding to system emergencies. The enrolling participant must have the physical ability to interrupt loads at the customer's facility within 30-minutes notice of a system emergency. Payment for verified load reductions is based on the real-time zonal price with a $100/MWh floor price. Participants may receive additional incentives by qualifying as an ICAP Resource for their load reduction capacity, although response to system emergencies then becomes mandatory.

  • The Real-Time Price Response Program provides customers with the opportunity to receive payments for voluntarily reducing load during periods when the real-time zonal price is projected to be high. ISO-NE will notify participants either the night before or day of an event if the zonal price is expected to exceed $100/MWh ($0.10/kWh). Participants can voluntarily respond to the notification and submit load data to verify their load reductions. Payment for verified load reductions is based on the real-time zonal price with a $100/MWh floor price. Customers must have interval metering installed at their facility to participate in this program.

  • The Day-Ahead Load Response Program is a more sophisticated variant of the Real-Time Price Response Program. Customers submit offers of hourly load reductions into the day-ahead market and are then notified by their enrolling participant if the offers are accepted. If so, the customer must drop load during the cleared hours but is remunerated by the greater of its bid or the actual clearing price for those hours. Customers must have interval metering installed at their facility to participate in this program.

The ISO-NE Forward Capacity Market (FCM) allows customers to bid their load reduction capabilities – whether constant (such as an indoor lighting retrofit project), seasonal (such as a new energy-efficient chiller plant), or dispatchable (such as a back-up generator or demand management actions) – into a forward capacity auction that pits demand-side resources against supply-side resources. These auctions take place periodically for commitment periods several years in the future. For instance, the first auction (for resources whose contribution to the grid must begin on June 1, 2010), took place in February 2008. Future auctions are announced at the FCM Web site. However, in the "transition period," in effect before the first commitment period begins in June 2010, so-called Other Demand Resources (such as energy-efficiency, load management, or distributed generation) of at least 100 kW installed after June 2006 are eligible for fixed "installed capacity" payments from ISO-NE. To qualify for these payments, demand resources must participate in either the Real-Time Demand Response Program or the Real-Time Profiled Response Program. The rate of remuneration is $4.05/kW per month in 2009 through 2010. Applications must include a measurement and verification plan to assure ISO-NE of the ability to perform.

What distributed energy resource options are available to me?

The Database of State Incentives for Renewable Energy provides information on programs that offer incentives for renewable distributed generation.

The Massachusetts Technology Collaborative (MTC), the state's development agency for renewable energy, offers programs through its Renewable Energy Trust. These include:

  • Commonwealth Solar is an initiative that makes funds available to commercial customers of National Grid, NSTAR, Western Massachusetts Electric, and Fitchburg Gas and Electric who install solar photovoltaics (PV). Rebate amounts depend on the size of the project and are capped at the lesser of 100% of total installed costs or the cost of a 500 kW installation (although actual installation can be larger). Rebates are received after installation is complete and approved for interconnection by the local utility.

  • Commonwealth Wind offers these rebate programs for various size projects.
    • Micro Wind is for wind installations up to 99 kW. Rebates are in two parts and based on the rated capacity and actual power output in the first year. Rebates are capped at $4.00/watt.
    • Community-Scale Wind is for wind installations 100 kW or greater and offers grants for siting support, technical and feasibility studies, and design and construction. Grant amounts are based on installation size and other characteristics. To qualify, applicants must be a customer of a Massachusetts investor-owned utility or Municipal Light Plant that pays into the Renewable Energy Trust.

Through its Custom Projects programs, National Grid offers gas customers a one-time rebate covering up to 50% of the cost (up to $100,000 for existing facilities and $250,000 for new facilities) for solar thermal space or water heating installations and other custom projects.

Are there energy efficiency programs sponsored by the state government?

Massachusetts currently has no state-sponsored energy efficiency programs available to Federal facilities. For more information, contact the Division of Energy Resources (DOER).

What additional opportunities are available to me?

Federal customers whose utilities have areawide supply contracts through the General Services Administration (GSA) (e.g. National Grid, Trigen Boston Energy Corp., and NSTAR Electric) may be able to take advantage of third-party financed energy efficiency projects called utility energy service contracts (UESCs). Information is available through the GSA Energy Center of Expertise Library. Federal facilities should contact their account executive to determine the level of each utility's participation.

NOTE: Energy efficiency funds and demand response programs are updated at least annually. Please contact the FEMP webmaster if changes are needed between updates.