Energy

Massachusetts Rolls Back Solar Subsidies, Could Save Ratepayers Billions

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Massachusetts is reforming the way it credits owners of solar panel installations, adopting a system that is expected to save people billions on their electricity bills.

The Massachusetts Department of Public Utilities issued an order Wednesday that officially green-lights a new form of solar panel compensation. The system, known as the Solar Massachusetts Renewable Target (SMART) program, will incentivize solar development by allowing utility companies to directly compensate the panel owner.

State officials believe the new program will save residents $4.7 billion on their electricity bills.

“[T]he SMART program will allow Massachusetts to expand its leadership by significantly increasing solar capacity while lowering costs for ratepayers,” Massachusetts Republican Gov. Charlie Baker said in a statement. “In addition to the benefits to ratepayers and the commonwealth’s energy portfolio, the SMART program will be the first in the nation to offer incentives to solar projects that are paired with storage to capture the benefits of solar regardless of time of day or weather conditions.”

SMART replaces solar renewable energy credits (SRECs), an open market system that was criticized for being too volatile. Solar developers will ultimately be compensated less under SMART than under the previous system.

“They’ve had two streams of revenue — solar renewable energy credits and net metering,” explained Patrick Woodcock, Massachusetts’ assistant energy secretary. “The tariff is all-in-one compensation that combines the two, and the total compensation is less.”

Despite receiving less compensation than the old system, solar developers appear to be receptive of SMART’s implementation. An advocacy group — while still “examining the details” — said it was nevertheless excited about it and urged for it to move forward.

“Solar projects are stalled across the Commonwealth awaiting the launch of the SMART program, which will still be weeks from now,” stated Vote Solar. “We are still examining the details of this order, but are happy to see it moving forward and hope the SMART program will be implemented as quickly as possible.”

Massachusetts follows a growing number of states that have chosen to reform how they incentivize solar energy development. Net metering — a system that credits solar panel owners at market rates for the amount of power they send back to the grid — has become increasingly controversial as the industry expands and ratepayers question its fairness. Numerous state governments have chosen to reform net metering or cap the amount of credits given for solar power.

Baker aims to use SMART as a means to bolster the solar industry while also saving ratepayers on energy costs. The program is intended to add 1,600 megawatts of photovoltaic capacity to the state’s energy portfolio.

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