Massachusetts SMART Solar Incentives for Your Nonprofit or Municipality

By PowerOptions Team

The Massachusetts SMART solar incentive program was launched in the fall of 2018 to a great reaction. However, almost immediately, it became clear that some updates were going to be necessary. For example, the capacity (or total amount of project volume) allotted to the National Grid Service territory filled up very quickly, leaving many customers in that territory unable to directly participate in the new incentive program.

In April 2020 the Massachusetts Department of Energy Resources addressed this issue, among others, when they announced an expansion of the program. But what does that mean and what are some of the other major changes to the SMART incentives?

How is the expanded SMART program different?

Let’s take a look at the most important points:

  • Program Expansion – There have been more capacity blocks added for all utility territories, bringing opportunities in territories that were previously full, such as National Grid, Eversource West, and Unitil. In addition, there’s now a portion of each capacity block carved out for mid-sized projects (25kW-500kW). This is because the program was previously filled up by big, multi megawatt projects and there wasn’t a lot of room left for mid-sized solar projects.
  • Incentive Calculation – The adder for public projects (such as state and municipal facilities) has increased from 2 cents to 4 cents. This is big because it lowers your overall PPA (power purchase agreement) price significantly. Moreover, the calculated formula for ‘value of energy’ has been revised to result in a lower ‘value of energy’ for the purposes of calculating incentives. This is a little complicated but all you need to know is this: the lower the value of energy, the higher the SMART incentive.
  • Battery Storage Now Required for Projects over 500 kW – As a frame of reference, 500kW is comparable to a large high-school. Battery storage provides additional revenue streams to the project, including being used to help manage energy demand charges.
  • Public Entities can Apply for SMART Early on in the Project – This essentially allows public entities to jump the queue. This is a big change from 2018, when public entities previously had to wait until the interconnection approval process was completed. On the other hand, private entities still have to await approval from the utilities. This can take around 2 to 3 months.

As you can see, whereas the initial phase of the SMART program didn’t adequately accommodate mid-sized projects and handicapped public entities which typically have longer approval timelines than private entities, the expanded program benefits organizations of all shapes and sizes, while giving the public sector an extra advantage.

Learn more about the changes to the SMART Solar program by watching our webinar here.

Why it’s Important to Act Quickly

The SMART program is structured in declining blocks, which means the earlier blocks offer larger incentives. For customers, it means those who get into the queue early will see more savings from their solar project. And it’s important to remember, in the previous iteration of SMART some territories filled up entirely in short order.

Another reason to act quickly, the federal solar tax credit (ITC) has already begun its gradual scaling down. Although nonprofits and municipalities cannot directly benefit from the tax credit, developers monetize the tax-credit into a lower solar power prices.

While the SMART program’s expansion softens the blow from diminishing federal incentives, these incentives won’t last forever. Therefore, we recommend if you want to see big savings from your solar project, act sooner rather than later.

The Bottom Line

For municipalities and nonprofit organizations considering solar power solutions, the time is now. Many organizations are seeing substantial savings by going solar, and Massachusetts continues to offer state incentives for organizations that want to make the country and state a greener place to live–while saving money on energy costs.

If you want to learn more about the SMART program, check out our webinar or speak to us about becoming a member of New England’s largest energy buying consortium.

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