Massachusetts Net Metering: Classes, Credits, and SMART Stacking

Massachusetts net metering lets you generate your own electricity, send any surplus to the grid, and receive bill credits that offset future charges. Most generating technologies qualify up to 60 kilowatts, and solar, wind, and anaerobic digestion facilities can go much larger: up to 2 megawatts for private facilities and 10 megawatts for public ones.¹ The credits never expire, and they can drive your electric bill all the way to zero.

What Qualifies and Which Class You Fall Into

Any generating technology, including solar, wind, natural gas, and fuel cells, qualifies for net metering if its nameplate capacity is 60 kW or less. Facilities using solar, wind, or anaerobic digestion can scale up to 2 MW privately or 10 MW if owned by a municipality or government entity.²

Your facility class controls how your credits are valued and whether you need space under a capacity cap before connecting:

Class I covers systems of 60 kW or less. Renewable systems of 25 kW or smaller are “cap exempt,” meaning you don’t have to secure cap space to connect.³
Class II covers systems above 60 kW but no larger than 1 MW.
Class III covers everything larger, up to the 2 MW private or 10 MW public ceiling.¹

Class I and Class II facilities earn credits valued on a wider set of rate components than Class III, which makes each kilowatt-hour of surplus more valuable. Most residential rooftop solar lands squarely in Class I.

What a Net Metering Credit Is Worth

Credits don’t equal the full retail rate, but they come close. For Class I and Class II facilities, each kilowatt-hour of excess generation is multiplied by the sum of four charges on your bill: basic service, distribution, transmission, and transition. Class III facilities receive the same formula without the distribution component.¹

Several bill line items are deliberately excluded from the credit: energy efficiency charges, renewable energy charges, demand charges, and the net metering recovery surcharge. That exclusion is why you’ll typically see a small residual bill in months when your system produces more than you use. For reference, a Class I cap-exempt facility in Eversource East territory was earning roughly $0.28 per kWh in credits in mid-2024.

Credits can take your bill to zero dollars and zero kWh of usage. Anything left over rolls into the next month and keeps rolling indefinitely.¹ That rollover matters: solar systems overproduce in summer and underproduce in winter, so the summer surplus builds a bank you draw down in the shorter months.

Sending Credits to Another Account

Massachusetts treats virtual net metering, where power is used at a different site than where it’s generated, exactly the same as behind-the-meter net metering. This is the mechanism behind community solar. As the host customer, you file a Schedule Z with your utility to assign credits to other accounts, including accounts you don’t own.¹

How far those credits can travel depends on your facility. Cap-exempt facilities and older Class I through III facilities not classified as “new solar” can only allocate credits within the same electric distribution company territory and the same ISO-NE load zone. New solar facilities, meaning those that applied for a cap allocation after September 26, 2016 or received one after January 8, 2017, and cap-exempt facilities serving on-site load can allocate credits to any distribution company account in the state.¹

You can change your Schedule Z allocation up to four times per calendar year unless your utility agrees to more. If you close an account that still has a credit balance, you have one year to request a one-time transfer of the remainder to another account.

Will the Capacity Cap Block You?

Massachusetts caps how much net metering each utility can host, with separate ceilings for private and public facilities. The private cap is 7% of each utility’s highest historical peak load, and the public cap is 8%.⁴ Once a utility fills its allocation, new facilities needing cap space have to wait.

As of late 2024, the specific megawatt caps per utility were:

Eversource: 408 MW private, 467 MW public
National Grid Massachusetts Electric: 359 MW private, 411 MW public
National Grid Nantucket Electric: 4 MW private, 5 MW public
Unitil: 7 MW private, 8 MW public

Cap-exempt facilities skip the queue entirely. Renewable Class I systems of 25 kW or less don’t need an allocation, and since the 2022 legislation, larger Class I through III systems that generate renewable energy and serve on-site load are also exempt from the private cap.³ For a typical residential rooftop installation, the cap is rarely a practical barrier.

Getting Connected

Before you can net meter, your utility has to approve an Interconnection Service Agreement. Massachusetts offers three pathways depending on system size and complexity: a simplified process for small, straightforward installations, an expedited process for mid-size projects, and a standard process for larger or technically complex systems.⁵ The standard process takes the longest and carries the highest potential cost.

If supplemental engineering review is needed, expect fees of up to $150 per hour, capped at $4,500. Technical requirements reference UL 1741 and IEEE 1547. Whether you need an external disconnect switch is left to the utility’s discretion. To actually net meter, you must file a separate net metering application alongside your interconnection application.⁶

Compliance continues after connection. You’re responsible for keeping your facility within the net metering rules on an ongoing basis. If you participate in the SREC market, production data must be reported to the Production Tracking System, automatically via a data acquisition system for systems over 10 kW, or manually for smaller ones.⁷

What Else You Can Stack on Top

SMART Program Payments

The Solar Massachusetts Renewable Target (SMART) program, run by the Department of Energy Resources, pays a per-kWh incentive separate from your net metering credits. SMART uses a declining block structure, so the rate drops as each capacity block fills and earlier participants lock in higher payments. The program is in its third phase and is accepting applications for the 2026 program year. Base rates vary by utility territory and block, with adders for things like low-income property siting. DOER publishes an annual program year report each December. Checking current SMART rates before you sign an installation contract is worth the effort, because the gap between one block and the next can meaningfully change your payback timeline.

Federal and State Tax Treatment

The federal Residential Clean Energy Credit under Section 25D, which covered 30% of solar installation costs, is no longer available for systems placed in service after December 31, 2025.⁸ Commercial and nonprofit installations may still qualify for federal clean energy investment tax credits depending on construction start date and labor standard compliance; a tax professional can confirm what applies to a specific project.

At the state level, Massachusetts offers:

A renewable energy source credit equal to 15% of your net expenditure on qualifying solar or wind equipment, capped at $1,000.⁹
A 20-year property tax exemption on solar and wind systems, extendable by agreement with your municipality. The system must produce no more than 125% of the property’s annual electricity needs, or be 25 kW or less.¹⁰
A state sales tax exemption on equipment directly related to a solar or wind system used as a primary or auxiliary power source for your principal residence.

If You and the Utility Disagree

Disputes over interconnection delays, credit calculations, or technical requirements follow a three-step process overseen by the Department of Public Utilities:¹¹

Good faith negotiation directly between the parties.
Mediation or non-binding arbitration if negotiation stalls.
A DPU adjudicatory hearing, which produces a binding, precedential decision that can be appealed to the Massachusetts Supreme Judicial Court.

You must comply with Section 9 of the interconnection standards to pursue any step. Written requests go to the DPU Ombudsperson. Most disputes that reach the hearing stage involve technical requirements the system owner considers unreasonable or costs the owner believes the utility should bear. Bringing in legal help early, ideally before mediation, tends to produce better outcomes than waiting until a formal proceeding is already underway.

Recent Changes Worth Knowing

Chapter 179 of the Acts of 2022 made the most significant recent changes to net metering. It raised the Class I cap-exempt threshold from 10 kW to 25 kW, so small residential systems no longer compete for cap space. It also created a new category of cap-exempt facility: Class I, II, or III systems over 25 kW that generate renewable energy and serve on-site load, provided they hold an interconnection agreement dated January 1, 2021 or later. For these facilities, credits beyond the host’s annual consumption, measured April through March, are valued at the utility’s avoided cost rate rather than the standard net metering credit rate.³

The same Act carved out exceptions to the Single Parcel Rule, which had kept multiple net metering facilities from operating on one parcel. Government-owned parcels and parcels with low- or moderate-income housing can now host multiple facilities aggregating up to 10 MW. Parcels with facilities on separate rooftops can host up to 2 MW in aggregate, and parcels where each rooftop facility sits behind a separate customer’s meter can reach 10 MW.³ If you’re planning anything beyond a single rooftop system, those exceptions are worth reading in full before you design the project.

1
Mass.gov. Net Metering Guide
2
Mass.gov. Net Metering Eligibility
3
General Court of Massachusetts. Session Laws Acts 2022 Chapter 179
4
Mass.gov. Net Metering Laws and Regulations
5
DOE OE Global Energy Storage Database. Massachusetts Interconnection Standards
6
Eversource. Massachusetts Net Metering
7
MassCEC. SREC Reporting Requirements
8
Internal Revenue Service. Residential Clean Energy Credit
9
Mass.gov. Credits Against Tax – Governors FY26 Budget
10
General Court of Massachusetts. General Law Part I, Title IX, Chapter 59, Section 5
11
Commonwealth of Massachusetts. Interconnection Dispute Resolution Guidance