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March 13, 2019

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SMART Incentives

March 13, 2019

The Solar Massachusetts Renewable Target, or SMART, is the sixth program designed to incentivize the installation of solar in MA. On November 26, 2018, SMART officially replaced the Solar Renewable Energy Certificate Program (SREC), created through the Green Communities Act (2008). SREC had investors trade credits for their clean power in an open market.

 

To put into perspective what SMART and programs like it have done, in 2008, only 5 megawatts (MW) of solar had been installed in all of Massachusetts. The creation of the SREC program sparked a solar movement that exponentially increased the capacity of installable solar.

 

Since 2010, MA has reached 1,600 MW of solar installed; during the next 2-3 years, SMART aims to add an additional 1,600 MW.[1] Whereas SREC was a ten-year program with two separate streams of income for the solar investor, SMART is a 20-year program with a single stream of income for the solar production. The switch from SREC to SMART means that solar investors are able to finance their projects over a longer term. In many cases, revenue is paid directly by the utility provider, usually Eversource or NGRID, which financial institutions like.

 

As the evolution of the solar incentives program continues, it is evident that the time to invest in solar is almost always now, as the incentives decrease as adoption increases. We at FireFlower Alternative Energy sometimes describe the SMART program as “riding the solar coaster” (Figure 1). Solar incentives are most lucrative at the beginning of the program. Fortunately, solar investment remains consistently profitable because costs of solar components have continuously declined (Figure 2).

 

 

The SMART program is divided into eight Blocks of 200 MW each. There is a stepdown in revenue produced every time we move to a new block. In just nine short weeks, we have already reached Block 8 for projects in all of National Grid territory. Investors and other solar project owners are so eager to harvest the benefits of the new program that they have consumed more than half of the capacity of the program in NGRID territory within the first two months of the start of SMART. The moral of the SMART story is: investing in solar sooner generates the greatest Return On Investment (ROI). There is no harm in exploring your options; the only thing you have to lose is electricity debt.

 

 

[1] “Solar Massachusetts Renewable Target (SMART) Program.” Mass.gov, https://www.mass.gov/info-details/solar-massachusetts-renewable-target-smart-program#general-information-.

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