On May 19, 2026, the Massachusetts Dept. of Public Utilities (DPU) authorised a full redesign of the Commonwealth’s major photo voltaic incentive program, Photo voltaic Massachusetts Renewable Goal (SMART), altering how photo voltaic initiatives will likely be funded, how a lot ratepayers pays and how briskly new photo voltaic capability can come on-line. Photo voltaic builders, ratepayers and clear power observers ought to all listen.
What modified?
The DPU authorised two up to date mannequin tariffs with out modifications: (i) a revised SMART 2.0 Provision and (ii) a brand new SMART 3.0 Provision. SMART 3.0 is the larger story, because it makes basic modifications to how this system works.
The earlier program used a “declining block” construction. Incentive charges have been set initially and dropped as capability elevated. Below SMART 3.0, the Division of Power Sources (DOER) will yearly alter incentive charges, capability allocations and different program options. The brand new program strikes DOER from a set construction to 1 that adapts yearly by adjusting tariffs on present real-world knowledge, together with working prices, market circumstances, and coverage objectives.
How a lot will this value?
The utilities estimate that SMART 3.0 will value ratepayers about $4.5 billion over 20 years. That covers photo voltaic initiatives enrolling in program years 2025 and 2026. The quantity dropped from an earlier $6.7 billion projection, primarily as a result of fewer initiatives enrolled in 2025 than anticipated.
The DPU acknowledged that these are giant numbers however concluded that the prior methodology of value measurement (projected net-dollars-per-megawatt-hour over many years) now not suits a program that adjusts yearly. The underlying notion is {that a} program that responds yearly to present knowledge can handle prices higher than one constructed on 20-year projections.
Why the push?
Why did this modification come about so rapidly? The One Huge Lovely Invoice Act, which turned federal regulation in July 2025, phases out the federal funding tax credit score (ITC) for photo voltaic initiatives. Tasks that don’t meet building milestones earlier than July 2026 will lose eligibility. With out well timed approval of the brand new tariffs, Massachusetts photo voltaic initiatives risked dropping these federal credit solely.
A particular concern for Unitil clients
One concern stands out — Unitil is the Commonwealth’s smallest electrical utility, serving roughly 1% of Massachusetts’ electrical load, however below the brand new guidelines, each utility should obtain not less than 5% of the statewide photo voltaic capability. That mismatch might end in Unitil’s small buyer base paying a bigger share of program prices than its measurement warrants. The DPU flagged the issue and advised Unitil and DOER to work collectively to shorten the imbalance.
What’s subsequent for the photo voltaic business?
This DPU order is barely the beginning. Here’s what comes subsequent:
- Firm-specific tariff filings. Every utility should file its personal SMART 2.0 and SMART 3.0 tariffs. As soon as authorised, DOER can problem last {qualifications}, and incentive funds can begin flowing.
- Part II of this continuing. The DPU reserved a number of points for a second part. These embrace the DPU’s formal position in DOER’s annual Program Evaluation. In addition they embrace whether or not so as to add value controls similar to funds caps, benefit-cost analyses, or a stakeholder advisory council.
- The annual program evaluation. Starting in 2026, DOER will run a full-year cycle of information assortment, value modeling and stakeholder evaluate. The outcomes will set program parameters for the next 12 months. Photo voltaic builders ought to plan to submit feedback every fall, when draft program 12 months reviews come out.
- Buyer invoice impacts. The utilities didn’t present bill-impact estimates for 2025 and 2026 on this continuing; these numbers will seem in annual SMART Issue filings. Ratepayer advocates will likely be watching.
- The ITC deadline. Builders have a slender window to qualify initiatives and begin building earlier than federal tax credit expire. Count on a rush of interconnection exercise and functions over the approaching months.
The underside line
Massachusetts is betting that an yearly adjusted data-driven incentive program will serve each clear power objectives and affordability higher than the prior inflexible mannequin. DPU’s approval clears the best way for SMART 3.0 to launch; nonetheless, the true take a look at arrives when annual assessments start, prices hit buyer payments and regulators resolve whether or not this system requires legislative guardrails. For the photo voltaic business, the message is straightforward: the chance is actual, and the clock is working.
Tanya M. Larrabee, Companion at Sherin and Lodgen, represents renewable power shoppers within the acquisition, growth, and financing of photo voltaic, wind, and power storage initiatives, together with advising on state incentive packages. She assists in advanced renewable power transactions together with advising lending establishments and debtors on building and time period financing for clear power initiatives and advising builders, industrial property homeowners, and landowners on native allowing, challenge growth, and leasing for photo voltaic and battery power storage initiatives. She works instantly with shoppers drafting and negotiating a broad set of renewable power agreements together with energy buy agreements, photo voltaic leases, and financing paperwork. Her follow additionally consists of advising shoppers on renewable power regulatory points, buying and promoting renewable power initiatives, and negotiating agreements associated to photo voltaic tax fairness issues.
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