Energy Incentive Programs, Massachusetts

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Updated August 2015

Massachusetts budgeted over $680 million in 2014 to promote energy efficiency in the state.  

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

Comprehensive legislation on electricity restructuring includes a non-bypassable systems benefit charge of roughly 2.5 mills/kWh for energy efficiency programs. The public benefit funding was augmented, starting in 2009, by Massachusetts’ portion of proceeds from both the ISO-New England Forward Capacity Market (see below in the load management/demand response section) and the northeastern states’ Regional Greenhouse Gas Initiative (RGGI). 

The energy efficiency programs are administered by Mass Save, an entity contracted by Berkshire Gas, Blackstone Gas Company, Cape Light Compact, Columbia Gas of Massachusetts, Liberty Utilities, National Grid, Eversource, and Unitil. Mass Save is intended to serve as a "one stop shop" for electric and gas efficiency programs offered by these utilities. The range of rebates and technical assistance through the initiatives is broad. For information on offerings for your area, visit the Mass Save website, where you can search for programs by location and by equipment type. 

The Building Operator Training and Certification Program trains and certifies building operators to optimize the operations of their facilities. This program is sponsored by several utilities. 

Customers of Berkshire Gas, Blackstone Gas Company, Columbia Gas of Massachusetts, Eversource, Liberty Utilities, National Grid, and Unitil can receive incentives through the Gas Networks consortium. Gas Networks sponsors rebate programs for high efficiency natural gas furnaces, boilers, water heaters, infrared heating, and commercial food service equipment.

What utility energy efficiency programs are available to me?

National Grid provides a variety of energy efficiency rebates and services to its electric customers covering efficient equipment such as chillers, lighting, HVAC, variable speed drives, and energy management systems. Custom incentives are also available. Another option is the Pay for Performance (P4P) program, which operates under a different model. Under P4P, an energy study is completed identifying potential energy efficiency measures (which must total at least 15% of the building’s usage); incentive payments are then based on the energy saved.

National Grid’s gas efficiency offering includes prescriptive rebates for efficient furnaces, boilers, and heaters (condensing or infrared). A variety of water heating systems, prescriptive controls, and kitchen equipment are also covered. Pre-approved custom projects receive an incentive based on the estimated first-year therm savings. However, incentives for custom projects are capped at 75% of the incremental project cost for new construction and 50% for retrofits. 50% of an approved energy efficiency engineering study is also covered up to $10,000.

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

  • Large business programs that offer financial and technical services to commercial, industrial, and institutional customers building new facilities, undergoing major renovations, or replacing old, inefficient equipment. Prescriptive and custom incentives are available to cover either a one-year payback or a percent of the installed cost of the project (35% for retrofits, 75% of new equipment and construction). Prescriptive measures include HVAC systems, lighting conversions and controls, VFDs and air compressors. (Pre-approval is required.) Design assistance, audits, and project development are also available through the program.

  • Small Business Energy Efficiency Services, which provides small commercial customers (average demand less than 300 kW) with a free energy audit, an energy efficiency project proposal, and incentives for equipment such as lighting, occupancy sensors, refrigeration and customized projects. 

For more information on energy efficiency programs offered by Massachusetts’ utilities see the previous section and check the Mass Save website.

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

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

ISO-NE’s 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 allows demand-side resources to compete with supply-side ones.  Bids that are accepted are paid the auction clearing price.  These auctions take place annually for commitment periods three years in the future (though the qualification process begins roughly a year in advance). Interested facilities should contact a market participant regarding the auction schedule; in addition, market participants may have unfilled capacity commitments ahead of the next auction.

Market participation includes both active (conventional demand response, including real-time emergency generation) and passive (energy efficiency and distributed generation, including renewables) options. Active DR opportunities include:

  • Real-Time Demand Response, which provides an opportunity for customers to receive payments for responding to system emergencies.  Participants are paid a capacity payment (through the FCM) and for actual load reductions based on the real-time locational marginal price.  Customers must respond within 30 minutes and must be able to receive dispatch instructions through a market participant or their agent (“demand-designated entity”). Participating customers must also have interval metering installed at their facility.

  • Price-Responsive Demand, a real-time demand response option that allows participants to offer reductions into the day-ahead energy market.  These customers are paid for cleared reductions in the market and are expected to interrupt in real time (according to their offers).

  • Real-Time Emergency Generation, which is for generators whose federal, state, and local permitting limits operation to actual or imminent loss of external power.  Calls to participate are restricted to times when ISO-NE has instituted manual 5% voltage reductions. Real-Time Emergency Generation resources must be capable of curtailing end-use electric consumption from the New England grid within 30 minutes of receiving a dispatch instruction, and maintaining that curtailment until notified.  For an emergency generator that does not operate in parallel with the grid, the participating customer must have an interval meter installed on the generator (or entire facility). Otherwise, interval metering of both are required.

What distributed energy resource options are available to me?

The Massachusetts Clean Energy Center, the state’s development agency for clean energy, offers renewable energy programs that were formerly administered by the Renewable Energy Trust. Incentives are generally available to commercial customers of any Massachusetts investor-owned utility or municipal light plant that pays into the Renewable Energy Trust. Current programs include:

  • The Commonwealth Solar Hot Water program provides up to $5,000 for feasibility studies and $50,000 for the development of commercial-scale solar hot water installations.

  • The Common Wealth Micro Wind program offers incentives for the installation of wind projects between 1 kW and 99 kW. Rebate payments are based either on rated capacity or verified estimate of energy produced by the system. Ninety percent of the rebate is paid upon completion of the project, with the remaining 10 percent paid after a year of operation. 

  • The Commonwealth Wind program is for community and commercial wind installations 100 kW or greater. This program offers grants for siting support, technical and feasibility studies, and design and construction. To qualify, applicants must be customers of a Massachusetts investor-owned utility or municipal light plant that pays into the Renewable Energy Trust.

The Database of State Incentives for Renewables and Efficiency (DSIRE) website provides information on additional programs that offer incentives for distributed generation, including those offered by small municipals and cooperatives. 

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 Department of Energy Resources (DOER).

What additional opportunities are available to me?

Federal customers whose utilities have area-wide supply contracts through GSA (e.g., National Grid), may be able to take advantage of 3rd-party financed energy efficiency projects called utility energy services contracts (UESCs). Information is available in GSA’s Energy Division Library. Federal facilities should contact their account executive to determine the level of each utility's participation.