Understanding the Proposed Changes to the MA SMART Program

The market for solar energy has seen major shifts in recent years, especially in Massachusetts. Clean sources of power have proven their ability to compete with fossil fuel prices and federal incentives for renewable energy adoption are stronger than ever. At the same time, the broader economy continues to deal with the effects of inflation.

These rapid (and complex) developments could reduce the effectiveness of existing programs that support the growth of renewables unless they’re responsive to shifting economic tides. Sustained progress toward clean energy requires adaptability, leading some governments to revisit their policies to keep up with shifting economic realities.

For Bay State residents, an upcoming series of significant changes to the Solar Massachusetts Renewable Target (SMART) program could soon yield greater financial benefits.

What is the SMART program?

Established by the Massachusetts Department of Energy Resources (DOER) in 2018, the SMART program exists to encourage the growth of solar throughout the state. The program offers financial incentives to users who operate solar energy systems, paid through one of three utility companies in the state: Eversource, National Grid, or Unitil.

SMART hasn’t undergone any significant changes since its debut six years ago, despite facilitating over 600 megawatts of new solar capacity by 2021. However, Massachusetts’ levels of new generation decreased in 2022 and 2023. Experts point to inflation and supply chain challenges as key factors in the slowdown.

Following this feedback, DOER has gone back to the drawing board, hoping to make the program more flexible and ultimately more appealing for those considering a solar installation.

What’s going to change?

The most far-reaching adjustment to the program will directly affect the way financial incentives are calculated. When the program was established in 2018, base rates were set for every kilowatt-hour of energy produced through a solar project. These rates were intended to be the program’s permanent financial terms and would decline as capacity blocks filled, offering less state support as solar proliferated.

The original program’s unchanging rules sought to deliver confidence and stability to solar energy users, but changing economic conditions have made it clear that more responsiveness is necessary. Under the proposed changes, adjustments to the SMART program for the program’s capacity and compensation rates will be revisited on an annual basis, relying on analysis by DOER and consultants to determine the appropriate guidelines for the following year.

Another change will benefit those residences and businesses that commit to small-scale generation. While capacity for large solar projects will now be determined on an annual basis, small projects (less than or equal to 25 kilowatts) will no longer be subject to capacity limits. In other words, energy generated by these small-scale solar developments can qualify for financial incentives without restriction.

Additionally, the revised guidelines aim to integrate more solar installations within currently built-up environments, minimizing disturbances to Massachusetts’ natural landscapes. The SMART program has always featured “adders” that encourage energy projects to increase their financial reward by meeting specific criteria, and a new adder directly aims to grow the implementation of rooftop solar.

The raised racking adder incentivizes rooftop mounting systems, allowing HVAC systems and other equipment to continue operating beneath a solar installation. This approach has the potential to significantly increase the amount of rooftop space available to be used for renewable power generation throughout the state, especially in urban settings. With this update to the SMART program, the financial benefits will grow as well.

Even more proposed changes include an expanded definition of projects serving low-income residents, which aims to broaden access to solar energy benefits for underserved communities. There are also revisions to the qualifying criteria for community solar projects and incentives for conducting thorough community engagement efforts during the development process.?

The latest proposal highlighting the full scope of DOER’s proposed changes, published on July 29, is available here.

When will it go into effect?

There’s no hard deadline for the program’s new policies to go into effect. An initial proposal was released in July, and feedback was accepted through early August.

DOER aims to file its draft regulations this fall, so energy consumers who operate solar generation systems (and those considering it) may have an initial set of new guidelines available for reference very soon.

When the changes go into effect, an initial open application period will begin on January 15th each year. At that time, all projects over 25 kilowatts will have 10 business days to apply for capacity allocation.

For now, further details on the program’s proposed changes are available in a webinar recently hosted by DOER.

What does it mean for me?

These program updates reaffirm Massachusetts’ continued commitment to the solar industry in a shifting economic climate. For Bay State businesses that have been considering a new foray into solar power generation or a capacity expansion, it’s a positive sign that you’ll be able to reap the financial rewards on an annual basis.

Once these new policies go into effect, small-scale installations will be able to operate without the risk of being boxed out by capacity limitations. With greater incentives on the table, it’s also a good reason to start thinking specifically about putting your rooftop to work as a site for a solar installation.

Regardless of a project’s size, knowing that the program’s compensation structure will be revisited each year is promising for expansion. Today’s incentives won’t be determined by yesterday’s economy, making it easier to know that a new solar installation will continue to be a seamless fit within your daily operations and a long-term benefit for your bottom line.

Of course, you don’t have to navigate the SMART program or its upcoming changes on your own. Get in touch with our team today to see how you can bring these incentives to your Massachusetts business.