Solar Rebates And Incentives

Note: Massachusetts is in the process of implementing a new solar incentive program - the Solar Massachusetts Renewable Target (SMART) program - to follow the SREC II program. 

Massachusetts' renewable portfolio standard (RPS) requires each regulated electricity supplier/provider serving retail customers in the state* to include in the electricity it sells 15% qualifying renewables by December 31, 2020. Legislation enacted in July 2008 (S.B. 2768) significantly expanded the RPS, establishing two separate renewable standards -- a standard for “Class I” renewables and a standard for “Class II” renewables. The Massachusetts Department of Energy Resources (DOER) regulates the RPS and developed corresponding rules. 

In January 2011, final rules were implemented for the state's Solar Carve-Out program, which is the portion of the required renewable energy under the Class I Standard that must come from qualified, in-state, interconnected solar facilities. In April 2014, final rules were implemented that ended the application period for the original Solar Carve-Out Program, and established the Solar Carve-Out II Program.

Facilities qualified under the Solar Carve-Out II Program generate Solar Renewable Energy Certificates (SREC IIs), which represent the renewable attributes of solar generation, bundled in minimum denominations of one megawatt-hour (MWh) of production. Massachusetts' Solar Carve-Out II provides a means for SREC IIs to be created and verified, and allows electric suppliers to buy these certificates in order to meet their solar RPS requirements. 

All electric suppliers must use SREC IIs to demonstrate compliance with the RPS. The price of SREC IIs is determined primarily by market availability, although the DOER has created a certain amount of market stability by establishing a state Solar Credit Clearinghouse Auction II (where prices are fixed according to a yearly schedule minus a 5% administrative fee), as well as the Solar Alternative Compliance Payment (SACP) for the state RPS (set at $350/MWh for 2017). The Solar Credit Clearinghouse Auction II should only be utilized if or when SREC II generators cannot sell their SREC IIs on the open market.

Only solar electric facilities built on or after January 1, 2012, may qualify to generate SREC IIs. SREC IIs are generated on or after January 1, 2014, since that is the date the Solar Carve-Out II program took effect. Generators must apply and receive a statement of qualification (SQ) from the DOER and must establish an account with NEPOOL GIS in order to participate in this program.

The SACP is currently set at $350 (2017) and the Solar Credit Clearinghouse Auction II price is currently set at $285 (2017). Both prices decline over time according to the following schedules:

Compliance Year	ACP Rate per MWh	Auction Price	Minus 5% Auction Fee
2014	$375	$300	$285
2015	$375	$300	$285
2016	$350	$300	$285
2017	$350	$285	$271
2018	$350	$271	$257
2019	$333	$257	$244
2020	$316	$244	$232
2021	$300	$232	$221
2022	$285	$221	$210
2023	$271	$210	$199
2024	$257	$199	$189
2025	added no later than January 31, 2015

  Under the Solar Carve-Out II, facilities are differentiated by project type and are assigned a particular SREC Factor according to the market sector under which they are classified. The SREC Factor determines the percentage of output that is eligible to generate SREC IIs. For example, a building-mounted project larger than 25 kW would receive an SREC Factor of 0.9, meaning that it would receive 0.9 SRECs for every MWh it generates. Facilities are each assigned to a particular market sector as follows:  

Market Sector	Generation Unit Type	SREC Factor
A	1. Generation Units with a capacity of <=25 kW DC	1
	2. Solar Canopy Generation Units
	3. Emergency Power Generation Units
	4. Community Shared Solar Generation Units
	5. Low or Moderate Income Housing Generation Units
B	1. Building Mounted Generation Units	0.9
	2. Ground mounted Generation Units with a capacity > 25 kW DC with 67% or more of the electric output on an annual basis used by an on-site load
C	1. Generation Units sited on Eligible Landfills	0.8
	2. Generation Units sited on Brownfields
	3. Ground mounted Generation Units with a capacity of <= 650 kW with less than 67% of the electrical output on an annual basis used by an on-site load.
Managed Growth	Unit that does not meet the criteria of Market Sector A, B, or C.	0.7

The Solar Carve-Out and Solar Carve-Out II programs are intended to support approximately 1,600 MW of solar facilities in Massachusetts. Qualified projects will generate SREC IIs for the ten years from the date they are qualified. After ten years, facilities will continue to be eligible to generate renewable energy credits (RECs) and will be able to sell those for compliance under the Class I standard.

Transition to the Solar Massachusetts Renewable Target (SMART) Program

While the 1,600 MW program cap has been reached, the SREC II program has been extended in order to smoothly transition to the new Solar Massachusetts Renewable Target (SMART) incentive program. Systems that receive an extension for good cause and are mechanically complete or operational by March 31, 2018 and before the effective date of the SMART program will receive the following SREC factors:

Market Sector	SREC Factor
A	0.7
B	0.6
C	0.55
Managed Growth	0.5

System up to 25 kW may receive an SREC factor of 0.8. More details on SREC factors during the program extension period can be found here.