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Client Alert: SMART 3.0 Unlocks Community Solar in Massachusetts
By Jason Kaplan
The Massachusetts Department of Energy Resources (DOER) proposed the SMART (Solar Massachusetts Renewable Target) 3.0 Program Rules this past June. Initially, I was skeptical that DOER would make the necessary adjustments to effectively unlock benefits for low-income households participating in community solar. By August, however, the final SMART 3.0 regulations surprised me in the best way possible.
After the state experienced delays and setbacks with its renewable goals, DOER pushed forward with innovative solutions designed to stimulate growth and support renewable energy adoption, deliver financial benefits, and drive local solar development.
Key Changes, Key Benefits
While utility consolidated billing (UCB) wasn’t implemented as many hoped, DOER incorporated a creative alternative that effectively replicates its benefits for low-income households. The new rules give developers optionality in meeting the LMI subscriber requirements. Developers can now allocate 15% of a project’s capacity to LMI subscribers at a 100% credit discount. This means LMI participants will never have a second bill to pay for credits, rather all of the credits applied to their bill will be the savings—essentially creating UCB-like outcomes without the administrative complexity. As a matter of fact, for LMI households, this is even better than UCB, since instead of just getting a net 10% savings applied to their bill, they are getting 100% savings, potentially wiping out their bill entirely!
From a developer and investor perspective, this is also a game-changer:
Massachusetts deserves recognition for designing a policy that delivers real community solar benefits to low-income households while keeping projects financeable. By embedding a low-percentage carve-out with a 100% discount, DOER demonstrates that equity goals and project financeability can coexist.
Other states struggling with the tension between equitable access and program financeability should take note: it can be done.
Bottom Line for Developers and Investors:
SMART 3.0 finally unlocks scale in the Massachusetts community solar market. The 15% at 100% discount option is unequivocally the winning compliance path and should guide acquisition strategies going forward. By leveraging this option, clients can minimize risk, accelerate development, and deliver meaningful financial benefits to low-income households.
In short, SMART 3.0 transforms Massachusetts community solar into a low-risk, equity-aligned, and financeable opportunity, allowing developers and investors to act with confidence.
After the state experienced delays and setbacks with its renewable goals, DOER pushed forward with innovative solutions designed to stimulate growth and support renewable energy adoption, deliver financial benefits, and drive local solar development.
Key Changes, Key Benefits
While utility consolidated billing (UCB) wasn’t implemented as many hoped, DOER incorporated a creative alternative that effectively replicates its benefits for low-income households. The new rules give developers optionality in meeting the LMI subscriber requirements. Developers can now allocate 15% of a project’s capacity to LMI subscribers at a 100% credit discount. This means LMI participants will never have a second bill to pay for credits, rather all of the credits applied to their bill will be the savings—essentially creating UCB-like outcomes without the administrative complexity. As a matter of fact, for LMI households, this is even better than UCB, since instead of just getting a net 10% savings applied to their bill, they are getting 100% savings, potentially wiping out their bill entirely!
From a developer and investor perspective, this is also a game-changer:
- Lower acquisition costs: No payment information is required from LMI subscribers and less LMI households are needed to meet the 15% threshold.
- Elimination of default risk: Since credits are fully applied to bills, there’s no risk of unpaid community solar credit invoices.
- Simplified compliance: The 15%/100% path is more financeable, making project development faster and more predictable.
Massachusetts deserves recognition for designing a policy that delivers real community solar benefits to low-income households while keeping projects financeable. By embedding a low-percentage carve-out with a 100% discount, DOER demonstrates that equity goals and project financeability can coexist.
Other states struggling with the tension between equitable access and program financeability should take note: it can be done.
Bottom Line for Developers and Investors:
SMART 3.0 finally unlocks scale in the Massachusetts community solar market. The 15% at 100% discount option is unequivocally the winning compliance path and should guide acquisition strategies going forward. By leveraging this option, clients can minimize risk, accelerate development, and deliver meaningful financial benefits to low-income households.
In short, SMART 3.0 transforms Massachusetts community solar into a low-risk, equity-aligned, and financeable opportunity, allowing developers and investors to act with confidence.
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