Get Smart About SMART
Jul. 11, 2018
Published Wednesday, 7/11/2018 @ 4pm EST
What is SMART?
Solar Massachusetts Renewable Target (SMART) is a monthly financial incentive program for individuals who purchase and install solar for their homes or businesses. More specifically, it is a predictable declining megawatt block solar incentive program with fixed, long-term prices over a 10-year period — and 20 years for solar systems greater than 25 kilowatts (kW). Massachusetts developed SMART to double its solar capacity to over three gigawatts (GW). SMART will replace the current solar incentive program in Massachusetts, Solar Renewable Energy Credits (SRECs).
How SMART Works
SMART consists of 1,600 megawatts (MW) of solar capacity broken down into 8 declining blocks. Each block has 200 MW of solar capacity to be used. Once the block “runs out” (every time 200MW has been installed in Massachusetts), it will move onto the next block, declining by 4%. Each block reserves a minimum of 20% and maximum of 35% for residential solar installations.
The solar incentive levels for SMART were set through an auction process. Bidders, such as Eversource, National Grid, and Unitil, submitted proposals for large solar projects at specific incentive levels. Currently, Municipal Utilities are not participating in the SMART program. The official results can be found below (source: The Massachusetts Department of Energy Resources (DOER)):
How Do I Know How Much My Solar Incentives Will Be?
Let’s use an example of an Eversource customer with an average solar system size of 9 kW, producing 10,000-kilowatt hours (kWh) annually.
As you can see in the above chart, the Block 1 base compensation rate is set at $0.17/kWh, with the compensation rate equaling $0.34 (see chart below). To figure out your incentive payment, you would take your volumetric delivery charges + your 3-year average service charge on your electric bill and subtract your set compensation rate ($0.34). Currently, that number equates to about $0.19/kWh in Eversource territory. In this example, the SMART incentive would be $0.34/kWh - $0.19/kWh = $0.15/kWh for 10 years.
Below is a chart showing the set rate for system sizes (source: DOER):
For that 9 kW size system producing 10,000 kWh annually, the customer would receive $15,000 in incentives over a 10-year period paid monthly. Remember to add in all the savings you will receive from your reduced electric bill and the federal tax credit! In addition, SMART offers multiple adders for commercial projects and an energy storage adder for residential.
The benefits of SMART include monthly (rather than quarterly) payments with the same payout per kWh each over 10 to 20 years. Your check may vary, as it’s dependent upon the amount of energy you produce; but the payout per kWh will not change. This will make it easier for customers to budget their monthly solar financing. Plus, you have guaranteed return on investment (ROI).
Time to Get SMART & Go Solar NOW!
As mentioned before, SMART is built on declining blocks. The solar incentives decline as each block is used, and it’s unknown how quickly each block will run out. It’s important to act now if you’re interested in going solar. If you purchase a solar system, you're guaranteed a payment every month for the next 10 years for the solar energy your solar system produces.
Calculating SMART may seem complicated, but our experienced Solar Consultants are happy to sit down with you to do all the work for you.
Have we convinced you to go solar yet? Between tax credits, monthly SMART payments, and a $0 electric bill, going solar offers a great ROI! You can’t get that type of ROI from your 401K. Not only that, but Boston Solar offers a 10-year comprehensive warranty and a 25-year system warranty.
To learn more or set up your free, no-obligation solar consultation, fill out the form on this page.