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."
What's new in the new Massachusetts SMART program rules
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.
