Massachusetts has moved decisively to fortify its solar energy sector, finalizing new regulations for its Solar Massachusetts Renewable Target (SMART) program. This strategic overhaul aims to stabilize the state’s solar market and protect local clean energy jobs, particularly as federal solar tax credits face potential elimination by Congress. The revamped SMART 3.0 program, which compensates solar producers for their electricity, introduces a dynamic annual review mechanism for compensation rates, replacing a rigid declining block structure that had previously led to significant incentive reductions.

Under the new rules, solar customers of Eversource, National Grid, and Unitil will continue to receive a fixed per-kilowatt-hour (kWh) payment. However, these rates will now be recalibrated annually, taking into account market shifts such as federal incentive rollbacks and tariff-driven equipment price increases. This flexibility is a direct response to the previous model, which saw incentive rates plummet by 2023, leaving some projects with minimal or no financial support, despite persistent high costs due to supply chain disruptions like the COVID-19 pandemic.

Elizabeth Mahony, Commissioner of the Department of Energy Resources (DOER), stated, “We’re evolving our solar incentive programs in a way that encourages development, but also keeps ratepayer impacts in mind. This iteration replaces an outdated, inflexible, inefficient program with a more nimble program, with one that encourages development and tries to reduce costs in the long run.” The DOER filed SMART 3.0 as an emergency regulation on June 20, with applications set to open on October 15, pending final utility regulator approval and public hearings scheduled for late July.

The initiative comes as Massachusetts seeks to reverse a recent decline in its solar standing, having fallen from a top-five state for installed capacity to 26th in 2024. This slowdown was attributed to interconnection delays, permitting hurdles, and waning incentives that eroded developer confidence. Lieutenant Governor Kim Driscoll emphasized the program’s role in job creation, noting, “Massachusetts energy jobs are on the line as we work to get more solar into Massachusetts.” The state aims to restore solar employment to pre-pandemic levels, which have seen a 10% reduction since 2018.

Beyond market stability, the updated SMART program also incorporates environmental considerations. A new mitigation fund will collect fees from large-scale solar projects, reinvesting them into natural resource protection, conservation, and landscape restoration efforts. Furthermore, the program offers additional incentives for projects built on landfills, brownfields, and parking lot canopies, signaling a preference for development within the built environment over pristine natural spaces. This comprehensive approach is designed to ensure sustainable growth while bolstering grid resilience, as demonstrated during recent heatwaves where solar power played a crucial role in meeting peak electricity demand and stabilizing costs.