SMART Program Incentives for Solar Arrays
In 2018, the Massachusetts Department of Energy Resources established the Solar Massachusetts Renewable Target (SMART) program, which regulates incentives associated with new solar photovoltaic (PV) development in the state. This is one of a series of fact sheets designed by UMass Clean Energy Extension to help farmers and others navigate the program.
Calculating Expected Incentives
Estimating expected compensation rates for solar arrays within the SMART program can be complicated.
General Information about Compensation Rates under the SMART Program
- A Base Compensation Rate is set based on the capacity of the system and the local utility service area. Over the course of the SMART program, the base rate declines by 4% for each “Capacity Block” that is filled in a given service area. You can check http://masmartsolar.com/ to determine which Capacity Block your site is in. Also review the Capacity Block Rate Guideline on the same website under Additional Resources, for additional details on compensation values.
- Small projects (≤ 25 kW) receive the highest Base Compensation Rates (in cents per kWh), but only for 10 years, compared to 20 years for larger projects.
- Projects of all sizes can receive additional incentives (cents per kWh) depending on the end-use customer for the electricity (e.g. low-income housing) and whether on-site energy storage is incorporated into the project.
- Larger projects (>25 kW) can receive additional incentives, depending on the location and whether the system is a fixed or tracking design. Some adder incentives are subject to a 4% decrease as each “tranche” is filled, but location-based adders are not scheduled to decrease over time. See http://masmartsolar.com/ for more information.
- Qualifying as Category 1 Agricultural or Category 1 Non-Agricultural will lead to the highest compensation rates for larger projects (>25 kW).
- If your land qualifies for the Chapter 61A program, has been in the program in the past 5 years, or is located on certain categories of valuable farmland soil (prime farmland, unique farmland, land of statewide importance), it will qualify as Agricultural for the purposes of the SMART program. Projects on Agricultural land can qualify as Category 1 Agricultural if they 1) are building-mounted systems, 2) are sized to meet no more than 200% of on-farm demand, or 3) are dual-use systems up to 2 MW AC in capacity (or larger if they qualify for a waiver).
- If your land would not qualify for the Chapter 61A program, has not been in the program in the past 5 years, and is not located on valuable farmland soils, it will be considered as Non-Agricultural land under the SMART program, regardless of whether farming is occurring on the land. Projects on Non-Agricultural land can qualify as Category 1 Non-Agricultural if they are 1) are building-mounted systems, 2) are canopy-mounted systems, 3) are located on a eligible brownfield, landfill, or previously developed land, 4) qualify as Public Entity projects, or 5) are ground-mounted systems no more than 500 kW in capacity.
- If your proposed project is a ground-mounted system with a capacity between 500-5000 kW it is in a solar overlay district, or otherwise explicitly meets local zoning requirements for solar power, it will likely qualify as a Category 2 project. If it is on land that has not been previously developed and does not explicitly meet local zoning requirements, it qualifies as Category 3.
- Category 2 and 3 projects are subject to “subtractors” which reduce the compensation rate based on the acreage of land developed. They may also be subject to land use restrictions, which disallow incentives for large, ground-mounted projects developed on certain categories of important wildlife habitat. See tinyurl.com/SMARTsiteEvaluation for land use restriction information.