by Emma Foehringer Merchant
September 16, 2019

When Massachusetts launched its latest solar incentive, the Solar Massachusetts Renewable Target (SMART), in November 2018, the industry welcomed it with a deluge of applications.

The program, designed in 200-megawatt blocks with incentive payments that step down over time, was originally slated to be 1,600 megawatts total. Then developers submitted more than 2,500 applications in the program’s first week. Tim Roughan, National Grid’s director of regulatory strategy, told Greentech Media in a recent interview that SMART was “wildly oversubscribed” from the beginning. 

Nearly one year after SMART opened, 1 gigawatt of capacity has rushed in from 11,311 applications. Blocks for large projects are tapped out or nearly full for most utility territories. 

With such intense interest, the state is now considering expanding the program by 800 megawatts — just one of several changes the Massachusetts Department of Energy Resources (DOER) proposed as part of a larger program review unveiled in early September. The state baked that review into the program at its outset, scheduling an assessment of the program once the number of qualified projects reached a cumulative 400 megawatts. 

Now that the review has arrived, the solar industry is clamoring to mold the SMART program to its needs. The industry’s main trade group, the Solar Energy Industries Association, cited “significant concerns” with DOER’s proposed changes, including what it called an “insufficient” program expansion. Vote Solar, which ahead of DOER’s proposals published a report outlining potential SMART reforms, said the state “is in danger” of missing its climate goals if it doesn't increase the program's size and change some of its policies.

Overall, the industry says it's hankering for longer-term certainty in a state where Governor Charlie Baker has framed clean energy as a central tenet of his administration.  

“The 400-megawatt review is a chance for the Baker administration to reaffirm its commitment to solar development in a thoughtful and balanced way,” said Jeremy McDiarmid, vice president of policy and government affairs at the Northeast Clean Energy Council.

Aside from the 800-megawatt expansion, some of DOER’s other notable proposed changes:

  • Increasing by five times the “greenfield subtractor,” a cost per acre for projects built on undeveloped land. DOER also proposed applying the subtractor to projects built on solar-zoned land. Those costs are part of the department’s efforts to steer more projects towards rooftops and other brownfield sites rather than open land.
  • Broadening the number of projects eligible for the current low-income adder. DOER said applications for low-income-eligible rates account for only 2.5 percent of all applications that have qualified for the program thus far. 
  • Pairing all projects over 500 kilowatts with storage.
  • Encouraging more behind-the-meter solar by allowing those projects to take advantage of the alternative on-bill credit, which is currently only available to standalone systems.
  • Offering about $3,500 per megawatt per year for projects that provide a pollinator habitat and get certification from the University of Massachusetts Amherst Clean Energy Extension.

In its outline of the proposals, DOER said it expects the 800-megawatt expansion to extend the program to last about five years based on an expected increase in demand and the current pace of applications. After its initial rush, SMART is now pulling in applications at 47 megawatts per month for large projects and 8 megawatts per month for small projects.

Still, many advocates, including the Northeast Clean Energy Council, MassSolar, Vote Solar and the Coalition for Community Solar Access (CCSA), say the 800-megawatt increase is much too small. They back expanding the program by a whopping 3,200 megawatts, bringing its total size to 4,800 megawatts. 

Advocates are also concerned about the possible increase to the greenfield subtractor, which skims value off projects sited on undeveloped land (as opposed to brownfields, landfills or other previously developed sites).

CCSA Executive Director Jeff Cramer says that significantly increasing the subtractor disproportionately impacts community solar and low-income solar projects that rely on economies of scale tied to large-scale projects often built on greenfields. 

“What DOER released is an unworkable proposal to meet [Massachusetts’] goals for solar,” said Cramer. “If implemented, I think it will dramatically slow [or] halt large-scale solar in the state.”

McDiarmid expressed similar trepidation about the prospect of multiplying the subtractor.   

“It’s a significant change to the program that could have a chilling effect on development, particularly when you combine it with the headwinds faced by solar developers on the interconnection front,” he said. 

DOER is accepting comments through September 27 and hosting five stakeholder meetings to discuss its proposal. The review will continue through mid-November, with SMART reforms rolled out later this year and into 2020.

Though solar advocates say they're hopeful about the process, the program’s tribulations have already impacted solar in the state. Slow processing of applications means only 34 megawatts have been installed under the program to date, according to DOER.

The most recent quarterly numbers from Wood Mackenzie Power & Renewables show Massachusetts dropping from a ranking of the top 10 states based on installations. Community solar installations in particular have taken a dive, hampered by SMART’s rocky rollout.    

Analysts say those struggles may further depress solar forecasts for the state, which is also in the midst of a “cluster study” that’s delayed hundreds of megawatts' worth of projects.  

What’s happening in Massachusetts is occurring elsewhere, too. According to the latest analysis from WoodMac, 2019 looks to be another “down year” for non-residential solar (which encompasses community, commercial and industrial solar) because of fluctuating state policies and reduced incentives.

Analysts expect the impact of those uncertainties to soften after 2020, with growth from states such as New York and Illinois balancing mellower markets in the once-dominant states of California, Massachusetts and Minnesota.   

“Most other states really have a lot of room to grow,” said CCSA’s Cramer.

He added that the policies states pursue will take on renewed importance as many look to exponentially increase deployment of renewables to reach climate targets. 

“We’re seeing a trend toward making really aggressive climate and renewable energy goals, and I think that’s extremely promising. The interesting part will be how that capacity is developed.”