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Solar Massachusetts Renewable Target (SMART): Massachusetts’ SREC II replacement program

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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 Renewable Energy Certificate (SREC) market, which incentivizes the production of a solar panel system for 10 years. However, the current SREC II program has reached its cap, leading the state to plan on rolling out a new incentive. Legislators are hopeful that this SREC II replacement will encourage the solar industry to continue growing throughout the state, and also decrease costs for electric utility customers. 

When does the new Massachusetts solar incentive start?

The new incentive is called SMART, which stands for Solar Massachusetts Renewable Target. The SMART program will start on November 26th, 2018. Until then, homeowners are still eligible for the SREC II program. 

When the SMART program starts, solar system owners will 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 (so, as the value of the energy goes up, the added value of the incentive is lower).

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.”)

Should you wait for SMART, or sign up for SREC II?

Both programs offer great financial incentives for solar, and in both scenarios, you’ll “break even” on your solar panel system in under five years. However, if you’re a homeowner and have been thinking about installing solar, you’re going to see bigger savings if you go solar with the SREC II program. That means you should start reviewing quotes from installers as soon as possible. For systems over 25 kW, the SREC II program will end at the end of March, and for all other systems (including most residential systems) the program will end in summer 2018.

Here’s an example scenario to help illustrate the difference between the two programs for a Massachusetts homeowner named Eileen. Eileen is an Eversource customer and has an 8 kilowatt (kW) solar panel system.

  • In the SREC II program, Eileen generates approximately 10 SRECs each year and sells them at the market rate, which earns her about $19,600 over the course of 10 years. (This assumes that SREC prices will decline at historical rates.) Between lower energy costs and the SREC II program,  her solar energy system saves her $63,600 over 20 years.
  • In the SMART program, Eileen earns $0.34 cents per kWh of electricity, minus the value of the electricity. At the end of the 10-year program, she has earned about $15,600 from her SMART program payments. Between lower energy costs and the SMART incentive, her solar energy system saves her $59,600 over 20 years.

Every system is different, but this example should give you an idea of the difference between the two programs. If you live in Massachusetts and are considering solar, you’ll save more with SREC II than with SMART.





Don



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 is 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 sizeLength of programIncentive Value ($/kWh)
Less than or equal to 25 kW (low income)10-year$0.39
Less than or equal to 25 kW10-year$0.34
25 kW - 250 kW20-year$0.26
250 kW - 500 kW20-year$0.21
500 kW - 1,000 kW20-year$0.19
1,000 kW - 5,000 kW20-year$0.17

SMART values for Eversource (WMECO)

System sizeLength of programIncentive Value ($/kWh)
Less than or equal to 25 kW (low income)10-year$0.33
Less than or equal to 25 kW10-year$0.29
25 kW - 250 kW20-year$0.21
250 kW - 500 kW20-year$0.18
500 kW - 1,000 kW20-year$0.16
1,000 kW - 5,000 kW20-year$0.14

SMART values for National Grid

System sizeLength of programIncentive Value ($/kWh)
Less than or equal to 25 kW (low income)10-year$0.36
Less than or equal to 25 kW10-year$0.31
25 kW - 250 kW20-year$0.23
250 kW - 500 kW20-year$0.19
500 kW - 1,000 kW20-year$0.17
1,000 kW - 5,000 kW20-year$0.16

SMART values for Unitil (Fitchburg Gas & Electric)

System sizeLength of programIncentive Value ($/kWh)
Less than or equal to 25 kW (low income)10-year$0.36
Less than or equal to 25 kW10-year$0.31
25 kW - 250 kW20-year$0.23
250 kW - 500 kW20-year$0.19
500 kW - 1,000 kW20-year$0.17
1,000 kW - 5,000 kW20-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.

One major difference between the current SREC program and SMART is that, in addition to the baseline incentive amount, the 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.





Don



7 thoughts on “Solar Massachusetts Renewable Target (SMART): Massachusetts’ SREC II replacement program

  1. MA

    What happens after the 10th year on a residential system under 25kw? Does the customer net meter the power or does the customer use whatever they are generating at the moment than get wholesale credit for anything they over generated during the day?

  2. Dana Stein

    Im trying to have solar installed in the next few weeks. Will i still qualitfy for the srec program? Im in Massachusetts. Ty

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