Play it SMART: New Opportunities in MA Solar
When it comes to solar in Massachusetts, there’s one word to know—SMART. Known as the Solar Massachusetts Renewable Target (SMART) program, it’s intended to boost solar development in the Bay State, while also reducing financing risks for banks and investors.
What is SMART?
SMART launched in late November 2018 using what’s known as a declining block model. As part of the program, there are eight blocks with predetermined solar capacity amounts and corresponding incentive amounts that will decrease as each block fills up with scheduled projects. Those interested in developing a solar system can apply to secure a portion of a block based on the date of their Interconnection Application (IA) submission and approval. The IA outlines how the solar array will be connected to the grid.
“SMART replaces the state’s expired SREC-I and SREC-II programs,” said Katie Rever, director, legislative & regulatory affairs at IGS Solar. “SMART is different in that it uses a feed-in-tariff (FIT) and solar projects are paid a fixed rate based on output. The SREC programs tended to follow a more complicated and less predictable model for compensation.”
Ways to participate
There are a variety of ways to participate, but if you’re a property owner and choose to partner with an experienced solar company providing financing, you will benefit from having the array owned, operated, and maintained by a third party, while you collect a quarterly lease payment. On the other hand, if you’re an energy buyer and want to use solar energy (but may not have the space or capital for an on-site solar system) you can still go solar by participating in this program. SMART also eliminates the need to consume the energy on-site, because array owners can choose to either use the energy produced or send it back to the grid.
“We confirmed this week that the award of Block Capacity for larger systems is fully underway for companies that have already completed applications for projects,” said Rever.
Timing considerations
The new blocks will be awarded beginning this month. To prepare, organizations can consider reviewing their financing options for an existing project, or how to purchase energy through the program. Also, of note is the fact that Investment Tax Credit (ITC) values are decreasing after this calendar year, so incentives through SMART will be greater for early adopters as the decrease can affect the economics of future solar projects. As shown below, the ITC is a 30 percent federal tax credit claimed against the tax liability of residential, commercial, and utility investors in solar energy property.
Here are the specifics on the ITC values:
- Through 2019 – 30% of system cost
- 2020 – 26% of system cost
- 2021 – 22% of system cost
- 2022 and beyond – 10% of system cost (permanent incentive value)