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Massachusetts last week enacted a revamped version of its solar incentive program that developers and advocates say should keep the state’s solar industry moving forward even as the Trump administration pushes to undermine federal support for clean energy.
“In short, the program makes Massachusetts a very healthy market for solar,” said Nick d’Arbeloff, president of the Solar Energy Business Association of New England. “We’ll still be able to present a compelling case to an investor.”
The newest iteration of the Solar Massachusetts Renewable Target program — generally called SMART — makes fundamental changes to the structure of the incentives to be more responsive to market conditions. Other provisions aim to make the benefits of solar available to more low-income residents, protect valuable open space from development, and encourage placement of panels on rooftops and in parking lots.
The state filed the new rules as emergency regulations, allowing them to go into effect immediately.
The move comes just in time, according to solar developers. The previous version of SMART hasn’t been effective in quite some time, they say. While draft regulations for this newest version of SMART were first released nearly a year ago, and a final revision was expected in fall 2024, months went by without new rules.
“The uncertainty we were facing was confusing inventors, was killing projects, and could have done even more damage,” d’Arbeloff said.
In the meantime, President Donald Trump took office and Republican legislators have been working on a budget bill that seems likely to accelerate the elimination of federal renewable energy tax credits. Massachusetts solar developers became increasingly worried they would find themselves in a “valley of death,” with neither state nor federal support, at least for a time, said Ben Underwood, co-CEO of Resonant Energy, a Boston-based solar company that specializes in projects serving environmental justice communities.
Developers, therefore, heaved a sigh of relief when the new state regulations were filed. The reimagined program will start accepting applications on October 15, which will give developers a chance to get projects in place and investors lined up, even with the threat of disruption at the federal level, Underwood said.
“Now we and other members of the industry can start to plan for the incentives,” he said. “It gives us a much easier transition in case federal incentives are taken away.”
Launched in 2018, SMART pays the owners of solar systems a set rate per kilowatt of energy generated by their panels. The base rate depends on project type, location, and size. Projects advancing goals the state supports — serving low-income communities, for example, or building on a closed landfill — receive a boost, known as an “adder,” to their base rate.
The program was initially designed to lower its rates as more solar installations were built. The thinking was that, as the solar industry became more established, the cost of developing projects would go down and developers would need less financial support to be viable.
For years, SMART helped drive solar growth in the state: From 2019 to 2021, annual solar installations more than doubled. Then the Covid-19 pandemic intervened, upending supply chains and sparking inflation. At the same time, SMART compensation rates had fallen, as intended. Suddenly, the incentive payments weren’t enough to cover growing costs, and the industry took a hit. In 2024, less than half as much solar capacity was installed than in 2021.
“You were finding that the incentive level for many projects was, in fact, zero,” d’Arbeloff said.
The new rules jettison the old system of declining rates, replacing it with one that resets the compensation and program size each year, allowing the program to adjust to future unexpected market changes. Annually, the state will conduct an economic analysis that considers progress toward emissions reduction goals, regional and national solar costs, current and historic program participation rates, and land-use and protection goals, and will use the results to set compensation for the coming year. Adders will still be part of the system, and will also be adjusted annually, as needed.
“We can understand the costs, we can understand the size of the program, and we can make adjustments with ratepayers in mind,” said Elizabeth Mahony, commissioner of the Massachusetts Department of Energy Resources. “That’s really important for ratepayers and the development community — we’re going to be so nimble.”
For 2025, the program will be open to up to 450 megawatts of capacity. The base compensation rates will be set after the state completes a new economic analysis in the next few months, Mahony said.
The revised regulations also aim to increase the amount of money flowing to solar projects serving low-income residents. For a development to receive an adder as a community shared solar project, it must allocate at least 40% of the bill credits it generates to low-income households and guarantee these customers a savings of at least 20%, compared with the basic retail price.
“It represents a substantial move toward having greater value for low-income community shared solar participants,” Underwood said. “It’s really good to see that.”
The new regulations also target ongoing tensions about how best to site solar projects while still protecting wildlife habitats and agricultural land.
“We hope the way this works is it pushes folks to do more on rooftops, to do more on canopies, and to do more on previously developed land,” said Michelle Manion, vice president of policy and advocacy for the Massachusetts Audubon Society. “When it comes down to the actual numbers, then we’ll see how well it actually works.”
Certain categories of land with particular environmental value have been declared ineligible for solar development going forward. Projects built on other open spaces will have to pay a mitigation fee that will be determined by a list of factors, including the land’s carbon storage and agricultural potential, the parcel’s ecological integrity, the cumulative impact of the proposed development and others in the area, and location of the planned project relative to grid infrastructure.
“It’s a good way to be a little more strategic about siting solar,” said Erin Smith, clean grid director for the Environmental League of Massachusetts.
These measures are combined with provisions that encourage more development on the built environment. The regulations expand the definition of a solar canopy that qualifies for an adder — which was limited to projects over parking lots, canals, and pedestrian walkways — to include any array raised high enough off the ground to allow the use of the area beneath for another function. The rules also create a new category of adder for panels mounted above other equipment atop buildings, allowing more efficient use of rooftop space.
Though the emergency regulations process put the new rules into effect immediately, the state must still hold three hearings within 90 days to gather public feedback and get final approval from utility regulators. Some tweaks to the program could be coming, but state officials are confident they’ve got the basics right.
“There are quite a few projects that have been waiting for this to come out,” Mahony said. “We believe this is one of the best ways we have to build energy generation in the next few years.”
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