Massachusetts has always been one of the best states for solar. Not only does the Bay State have the high electricity rates that lead to a short payback period for your solar investment – it also has a history of having strong solar incentives for property owners looking to own a solar panel system.
One of the best solar incentives currently available in the state is the Solar Massachusetts Renewable Target (SMART) program. In this article, we’ll discuss how the MA SMART program incentive works and who is eligible to receive this incentive.
When did the new MA SMART program start?
Prior to the beginning of SMART, people going solar in Massachusetts were eligible for the state’s Solar Renewable Energy Certificates (SREC) program. This incentive program was very popular and reached its capacity for new installations in 2016. Following this, the State of Massachusetts began developing the new solar incentive program and planning for the transition away from SRECs. The SMART program officially started on November 26th, 2018. Property owners interconnecting their solar panel systems after this date are not eligible for the old SREC program.
With SMART, solar energy system owners receive a payment from the state for their solar production at a fixed rate per kilowatt-hour (kWh) of solar energy produced. The compensation, or “all-in rate,” that a system owner receives is calculated by subtracting the value of the energy (determined by electricity rates) from the total incentive amount. This is because you’re still eligible for net metering under the SMART program, and the state does not want to double-compensate you for solar electricity.
The difference between SMART and Massachuetts’ SREC II program
Both the SMART program and SRECs award customers based on the amount of electricity produced by their solar panels. However, there are some practical differences in the two programs.
With SRECs, you’re receiving a certificate that you can trade on the market, the value of which varies depending on market conditions (including supply and demand). SMART, on the other hand, is fixed: once you’re awarded a particular incentive amount per kWh, that is going to be what you receive for the duration of the incentive program. (You can find specific incentive values for each utility below, under “How the SMART program works.”)
How the SMART program works
The SMART program has a “block” structure that dictates the incentive amount you’ll receive. As more people install solar panels, a block will “fill up” towards a predetermined threshold, measured in megawatts of solar panel capacity. Once the threshold is reached, the incentive is reduced for everyone who goes solar after that. Each block is 200 megawatts (MW) of solar installations, and the value of the incentive declines by four percent between each. Block 1 rates for each utility are below. (These numbers are current as of January 2018; check with your installer to ensure you have the correct price.)
SMART values for Eversource (NSTAR)
| System size | Length of program | Incentive Value ($/kWh) |
|---|---|---|
| Less than or equal to 25 kW (low income) | 10-year | $0.39 |
| Less than or equal to 25 kW | 10-year | $0.34 |
| 25 kW - 250 kW | 20-year | $0.26 |
| 250 kW - 500 kW | 20-year | $0.21 |
| 500 kW - 1,000 kW | 20-year | $0.19 |
| 1,000 kW - 5,000 kW | 20-year | $0.17 |
SMART values for Eversource (WMECO)
| System size | Length of program | Incentive Value ($/kWh) |
|---|---|---|
| Less than or equal to 25 kW (low income) | 10-year | $0.33 |
| Less than or equal to 25 kW | 10-year | $0.29 |
| 25 kW - 250 kW | 20-year | $0.21 |
| 250 kW - 500 kW | 20-year | $0.18 |
| 500 kW - 1,000 kW | 20-year | $0.16 |
| 1,000 kW - 5,000 kW | 20-year | $0.14 |
SMART values for National Grid
| System size | Length of program | Incentive Value ($/kWh) |
|---|---|---|
| Less than or equal to 25 kW (low income) | 10-year | $0.36 |
| Less than or equal to 25 kW | 10-year | $0.31 |
| 25 kW - 250 kW | 20-year | $0.23 |
| 250 kW - 500 kW | 20-year | $0.19 |
| 500 kW - 1,000 kW | 20-year | $0.17 |
| 1,000 kW - 5,000 kW | 20-year | $0.16 |
SMART values for Unitil (Fitchburg Gas & Electric)
| System size | Length of program | Incentive Value ($/kWh) |
|---|---|---|
| Less than or equal to 25 kW (low income) | 10-year | $0.36 |
| Less than or equal to 25 kW | 10-year | $0.31 |
| 25 kW - 250 kW | 20-year | $0.23 |
| 250 kW - 500 kW | 20-year | $0.19 |
| 500 kW - 1,000 kW | 20-year | $0.17 |
| 1,000 kW - 5,000 kW | 20-year | $0.16 |
Similar to the current SREC program, the proposed incentive for small-scale projects of less than 25 kW (like the vast majority of residential systems) would run for 10 years. For larger projects, developers would be looking at a 20-year period.
Calculating your added incentive amount
How much you’ll earn through the SMART program depends on your utility company, the block you’re eligible for, how much solar energy you produce, and the type and size of your solar panel installation.
For a standard residential solar panel system, your “added incentive” amount will be equal to the baseline incentive value (as determined by your block) minus the value of energy (delivered via net metering credits).
Here’s an example scenario to help illustrate how the incentive is calculated for a Massachusetts homeowner named Eileen. Eileen is an Eversource customer and has an 8 kW solar panel system. She’s eligible for a baseline incentive value in Block 1 is $0.34 per kWh. At the start of the program, it’s determined that the value of energy (based on both electricity delivery and supply rates) is $0.20 per kWh. As such, she will earn an additional $0.14 per kWh of solar production over the course of 10 years:
Added incentive rate = baseline incentive rate ($0.34) – value of energy ($0.20) = $0.14
For solar panel systems that are behind-the-meter (i.e. serving a property’s energy usage directly), this added incentive rate will remain fixed for the duration of the program. Given average production numbers in Massachusetts for an 8 kW system, Eileen will earn approximately $13,142 in revenue from the SMART program over 10 years.
In addition to the baseline incentive amount, the SMART program offers bonuses for particular types of installations. These “adders” increase the per-kWh incentive for building a solar canopy, using energy storage, building a system on a landfill, and other innovative solar systems.
Solar canopies, energy storage, and other adders that increase the value of your new MA solar incentive
The incentive payment that you initially qualify for depends on the size of your solar panel installation, but you can increase your total per-kWh incentive with adders for a few different circumstances.
Some of these adders are based on the location of the installation. For example, if you’re installing a solar canopy, you could increase your base incentive by $0.06 per kWh. Other location-based installs that are eligible for an adder are building-mounted projects and those installed on brownfields and landfills.
Other adders are based on the off-taker (also known as the person utilizing the electricity). These adders can range from an additional $0.02 per kWh to $0.06 per kWh and include incentives for public entities and community shared solar users. Low-income property owners are also eligible for an adder worth $0.03 per kWh.
There is also an adder for battery storage that is integrated with a solar PV system. Depending on how big the battery is compared to the solar panel system it’s paired with, this adder could be anywhere from an extra $0.0247 to $0.0763 per kWh of electricity. The adder is dependent on two factors: how big the battery is compared to the solar panel system it’s paired with, and how much electricity the battery can provide at a given time.
For example, if you have a 4 kW solar panel system and install a 1 kW Aquion Aspen battery with it, you’ll get an additional $0.0247 per kWh of electricity. If you install a 3 kW sonnen eco compact, your incentive will increase to $0.0667. To make it easier for you to determine the energy storage adder you may be eligible for, the Massachusetts Department of Energy Resources (DOER) created an energy storage calculator, available for download on their website.
Compare your solar options to find the best price in Massachusetts
It’s never too soon to go solar. On EnergySage, you can get started shopping for solar and comparing options side-by-side from local Massachusetts installers that take into account the current incentives available. To start receiving free solar quotes, take a look at the EnergySage Solar Marketplace. Alternatively, if you want to start out your process with an estimate for what solar would cost you, try our Solar Calculator.
