If you have been following the SMART solar Massachusetts incentives, you may be familiar with how homeowners and business owners who have installed solar on their homes or property can enter into 1 of 8 declining blocks of 200 megawatts (MW) to receive a monthly incentive payment for their solar energy production. In total, that’s 1.6 gigawatts (GW) capacity open to homeowners and business owners who go solar in Massachusetts.
This SMART solar incentive has been a large part of what has made Massachusetts one of the leaders in residential solar installation capacity in the country. To encourage the continued development of small and medium-scale solar energy to benefit both the Massachusetts economy and the future of energy here in the Bay State, the Mass Department of Energy and Resources doubled the total capacity of these SMART program blocks, to 3.2 gigawatts!
So what does this expanded SMART capacity mean for homeowners that have been planning to install solar this year or next? It means there are more incentives to go around.
With this extension of an additional 1.6 GW, the total of all available blocks is now 3.2 GW, or 16 total incentive blocks spread out across the utilities.
Each 200 MW block is spread out amongst the investor-owned electric utility companies throughout the state: National Grid, Eversource and Unitil. As the first 1-8 blocks (1.6GW) fill up, the available compensation base rate drops by 4%, and then the expanded 9-16 blocks (1.6GW) will decline by 2% until all the blocks are filled.
Before the emergency expansion, some of these SMART blocks were nearing the end of their capacity in certain areas, and once those blocks were full, homeowners who installed new solar PV systems would have been out of luck.
With some utility areas having already nearly filled their block capacity, like Eversource MA West currently on their 6 out of 8 blocks, this is great news for homeowners in:
...as well as homeowners in the Massachusetts Electric/National Grid service area, like in:
The MA SMART program incentive payments for each solar owner will vary based on:
the size of your system (how many kWs),
additional solar battery capacity,
the ‘Value of Energy’ from your utility (more on that below),
and the base compensation rate for each available 1-16 block you signed up for under your utility.
SMART incentive rate per kWh = Block base compensation rate - Value of Energy.
Remember, the earlier the better! Over time, not only do the blocks’ base compensation rate decreases but as electricity prices increase so does the ‘Value of Energy’. Value of Energy takes into account your utilities’ electricity service rates, transmission, and distribution rates.
It might sound complicated but Boston Solar will take you through the calculations for you and explain what SMART earnings you could expect to see based on your solar energy needs.
For example, if you installed a 9kW system that produces 10,000 kWh annually and were able to have signed up for Block 1 of incentives, the estimated benefit is about $15,000 over the next 10 years. When you break it down, that’s a check for roughly $125 per month from your utility company!
As each block fills up, you will receive a lower base compensation rate than the previous block - currently by 4% for blocks 1-8 and then by 2% under the expansion 9-16 blocks. So if you sign up for block 9 of 16 with that same 9kW system, your monthly SMART incentive payment would be approximately $45 (actual benefits will vary by system size, utility block, and the current value of energy).
When you consider that a well-designed solar PV system can nearly eliminate all of your electricity costs, and that the income from the SMART program can be money in your pocket, it can seem like a no brainer.
And that's only accounting for one of the many solar incentives available here in Massachusetts! Don’t forget, you can take 26% of the cost of installation this year to reduce your 2020 federal taxes through the Federal Investment Tax Credit, and up to an additional $1,000 on your Massachusetts state income taxes. Plus, with net metering, you can put your excess solar energy to work, offsetting the energy your home uses at times of low solar output to receive an electricity bill credit. There are also additional incentives if you combine your solar energy system with a solar battery.
Even with all of these solar rebates and incentives, paying upfront for solar installation doesn’t fit everyone’s financial plans. Boston Solar can help you find the right solar financing option, so you can gain all the benefits of owning your solar PV system.
Want to know about the SMART solar block status in your area and how much you could earn? Boston Solar can get you up to speed when it comes to solar incentives. Call 617-858-1645 or contact us for a free solar quote.