Solar Massachusetts Renewable Target (SMART) Program

Summary

Note: The Department of Energy Resources released a straw proposal in July 2024 stipulating several proposed changes to the SMART program, including the following: amendments to the energy storage and solar canopy adder, a new raised racking adder, no more separate adders for community shared solar and low-income community shared solar, specific discounts for customers under community solar project contracts, changes to capacity allocations for small and large solar projects, and a new fixed SMART incentive payment for small projects, among others. Draft regulations are expected to be filed sometime in Fall 2024.

The Solar Massachusetts Renewable Target (SMART) Program provides per-kWh incentives to solar PV projects up to 5 MW. The program is capped at an original program capacity of 1,600 MW, plus an extended capacity of 1,600 MW, totaling 3,200 MW of program capacity available.  Incentives are available in Eversource, National Grid, and Unitil territories. 

Between 20% and 35% of total program capacity is required to be reserved for projects of 25 kW or less. Program capacity is divided into 80 MW blocks, with incentive amounts declining with each block.

Incentive Amount

The value of the incentive payment is equal to the following for standalone solar projects: 

(Base compensation rate + compensation rate adders - greenfield subtractor) * total kWh generated - value of energy generated

The value of the incentive payment is equal to the following for behind-the-meter solar projects:

(Base compensation rate + compensation rate adders - greenfield subtractor) - (distribution kWh charge + transmission kWh charge + transition kWh charge + three-year average of basic service kWh charge)

The initial base compensation rates for each utility territory were determined through a competitive procurement process, with projects between 1 and 5 MW eligible to participate. The Block 1 base compensation rates for each utility were set at the average price of all selected proposals for that utility territory in the competitive procurement process. The base compensation rates decline by 4% per capacity block. The remaining MW capacity in each utility territory can be found on the SMART Program website.

Base compensation rates vary by system size. The base compensation rate is multiplied by the following factors for projects 1 MW or less:

• Low-Income projects less than or equal to 25 kW AC: 230%
• Projects less than or equal to 25 kW AC: 200%
• Greater than 25 kW to 250 kW AC: 150%
• Greater than 250 kW to 500 kW AC: 125%
• Greater than 500 kW to 1 MW AC: 110%

The following compensation rate adders are available, with the adder value decreasing by 4% with each capacity block.

• Community shared solar project: $0.05/kWh (initial adder value)
• Low-income property project: $0.03/kWh (initial adder value)
• Low-income community shared solar project: $0.06/kWh (initial adder value)
• Public entity project: $0.02/kWh (initial adder value)
• Project co-located with energy storage: Varies based on formula in 225 CMR 20.00
• Project including solar tracking: $0.01/kWh (initial adder value)

Note that for systems 25 kW or less, the combination of a base compensation rate and adder may not exceed the base compensation rate for low-income projects less than or equal to 25 kW.

If a project is a Category 2 Land Use project (ground-mounted with a capacity greater than 500 kW and up to 5 MW that is sited on land that has not been previously developed and is zoned for commercial or industrial use) or a Category 3 Land Use project (ground-mounted with a capacity greater than 500 kW and up to 5 MW), the incentive payment will include a greenfield subtractor. This subtractor is equal to $0.0005/kWh for Category 2 Land Use projects and $0.001/kWh for Category 3 Land Use projects.

The value of energy generated by the project is the total kWh generated during a billing period multiplied by the net metering credit rate for net-metered projects. For projects receiving the Alternative On-Bill Credit (see below), the value of energy is equal to the total kWh generated multiplied by the energy compensation rate. For projects that are not net-metered or participating in the Alternative On-Bill Credit tariff, the value of energy is equal to the total kWh generated multiplied by the state qualifying facility value.

Alternative On-Bill Credit 

The SMART Program creates a new compensation option, the Alternative On-Bill Credit (AOBC), that may be used instead of net metering or a qualifying facility purchase. The Department of Public Utilities approved model SMART provisions for the state's utilities in September 2018, which set the AOBC credit rate at the applicable basic service rate. AOBC credits may be transferred, with allocations specified to two decimal points.