The Massachusetts SMART solar incentive pays you a fixed rate for every kilowatt-hour your panels produce, locked in for 20 years and paid directly by your utility. For program year 2026, small residential systems earn a flat $0.03 per kWh on top of the value of the electricity they offset, while larger projects receive base compensation rates from roughly $0.18 to $0.28 per kWh depending on system size.1Mass.gov. SMART 3.0 Program Details The program is run by the Massachusetts Department of Energy Resources (DOER) and replaced the state’s earlier market-based credit system with a predictable tariff.
How the Payment Structure Works
SMART is a tariff-based incentive. The utility company cuts you a check (or credits your bill) based on how much your system generates, at a rate that is set when your project qualifies and does not change for 20 years. The regulatory framework sits in 225 CMR 20.00.2Mass.gov. SMART 1.0 and 2.0 Program Details
The program is in its third phase, commonly called SMART 3.0. Earlier versions used declining capacity blocks, so rates dropped as each block filled. SMART 3.0 sets rates annually by program year instead. DOER began accepting applications for program year 2026 on January 1, 2026, and is issuing Preliminary Statements of Qualification while tariff approval is finalized.1Mass.gov. SMART 3.0 Program Details
Your 20-year rate does not start on installation day. It starts once the Department of Public Utilities approves the tariff and DOER issues your Final Statement of Qualification.1Mass.gov. SMART 3.0 Program Details
Who Can Participate
SMART is only open to customers of the three investor-owned utilities: Eversource, National Grid, and Unitil.2Mass.gov. SMART 1.0 and 2.0 Program Details If your electricity comes from a municipal light plant or a local cooperative, SMART is not available. Your system also has to be interconnected to the grid.
One rule catches homeowners off guard: you cannot take SMART payments and net metering credits at the same time on the same system. You can sit on the net metering waitlist while collecting SMART, but switching to net metering ends the SMART tariff.3Mass.gov. Net Metering Guide For most residential owners the guaranteed 20-year SMART rate is the more predictable option, but ask your installer to run both numbers before you commit.
Incentive Rates for Program Year 2026
SMART 3.0 splits projects into two compensation structures based on system size.
Small Residential Systems (25 kW or Less)
A typical home rooftop system sits in this category. Instead of a full base compensation rate, these systems receive a flat incentive of $0.03 per kWh on top of the value of the electricity they consume or export. Low-income qualifying households receive double that flat rate at $0.06 per kWh.1Mass.gov. SMART 3.0 Program Details The flat incentive is lower than rates for larger systems because small behind-the-meter systems already offset retail electricity costs directly.
Larger Projects (Over 25 kW)
Systems above 25 kW receive a Base Compensation Rate that represents the total value of each kilowatt-hour produced. The 2026 rates by size tier:
- Over 25 to 250 kW: $0.2807 per kWh
- Over 250 to 500 kW: $0.2430 per kWh
- Over 500 to 1,000 kW: $0.2317 per kWh
- Over 1,000 to 5,000 kW: $0.1790 per kWh
These rates come from DOER’s Program Year 2026 Annual Report.4Mass.gov. Program Year 2026 Annual Report For larger projects, the utility pays the difference between the base compensation rate and the value of the energy the site consumes, with the remainder issued as a direct payment.
Adders That Raise Your Rate
On top of the base rate, SMART offers supplemental payments called adders for projects that meet certain design, location, or off-taker criteria. Adders apply for the full 20-year contract, so a few extra cents per kilowatt-hour compounds into real money.
Location-Based Adders
Where you put the panels changes what you earn. The regulation at 225 CMR 20.07 sets baseline adder values by site type:
- Canopy (parking lots, walkways): $0.06 per kWh
- Agricultural dual-use: $0.06 per kWh
- Eligible landfill: $0.04 per kWh
- Brownfield: $0.03 per kWh
- Floating solar: $0.03 per kWh
- Building-mounted: $0.02 per kWh
These are the initial rates set by regulation, and DOER may adjust them for each program year.5Cornell Law Institute. Massachusetts Code 225 CMR 20-07 – Compensation Rates Canopy and agricultural installations earn the highest location premiums because they avoid converting open land.
Off-Taker Adders
Who benefits from the electricity also affects your rate. For program year 2026:
- Community shared solar: $0.07 per kWh
- Low-income property: $0.05 per kWh
- Public entity: $0.02 per kWh
Low-income community shared solar projects can qualify for both the community shared and low-income adders at once.1Mass.gov. SMART 3.0 Program Details
Storage and Other Adders
Adding a battery earns a storage adder with a multiplier rate of $0.04 per kWh for program year 2026. The battery has to be co-located with the solar array, and DOER publishes a separate calculator covering the specific capacity and cycling requirements.1Mass.gov. SMART 3.0 Program Details Solar tracking systems that follow the sun earn an extra $0.01 per kWh, and pollinator-friendly ground installations certified through the UMass Clean Energy Extension earn $0.0025 per kWh.5Cornell Law Institute. Massachusetts Code 225 CMR 20-07 – Compensation Rates
How to Apply
Most residential applicants never touch the application portal themselves. Your solar installer typically handles the entire submission through the CLEAResult-operated portal on your behalf.6Eversource. Solar Massachusetts Renewable Target Incentive Program Understanding what goes into the application still helps you catch errors early.
Documents You Need
The most important piece of paper is the signed Interconnection Service Agreement (ISA) from your utility. This document confirms the utility has reviewed your system’s technical specifications and approved the grid connection. Both you and the utility have to sign it before your application can move forward.7Massachusetts System of Assurance of Net Metering Eligibility. MassACA Interconnection Service Agreement Requirements Beyond the ISA, the application requires your utility account number, a site map, the installer’s certification details, and, for larger ground-mounted systems, documentation of the property acreage.
One detail that trips people up: the name on your utility account has to exactly match the name on your SMART application. A mismatch between the property owner’s name and the account holder on the electric bill will stall review. Verify it before your installer submits.
What Happens After You Submit
The program administrator and DOER review the application. If approved, DOER issues a Preliminary Statement of Qualification, which reserves your project’s spot in the current program year’s capacity allocation.2Mass.gov. SMART 1.0 and 2.0 Program Details Once the system is installed and generating, your installer submits a claim confirming the commercial operation date. DOER verifies the installed hardware matches the application and issues the Final Statement of Qualification, which starts the 20-year tariff clock.
The gap between going operational and receiving your first incentive payment is typically three to four billing cycles, depending on your utility. Corrections and exception requests go through the program administrator at CLEAResult.8Mass.gov. SMART Program Requests for Extensions and Exceptions
Stacking the Federal Solar Tax Credit
SMART payments are only half the financial picture. The federal Residential Clean Energy Credit under 26 U.S.C. ยง 25D lets homeowners claim 30 percent of the total cost of a solar installation as a credit against federal income tax.9Office of the Law Revision Counsel. 26 USC 25D – Residential Clean Energy Credit That 30 percent rate applies to systems placed in service through 2032, drops to 26 percent in 2033, and drops again to 22 percent in 2034.
Receiving SMART payments generally does not reduce what you can claim on the federal credit. The IRS treats state performance-based incentives differently from purchase-price rebates. Because SMART payments arrive over time based on production rather than reducing what you paid upfront, they generally do not shrink your qualified costs for the Section 25D credit.10Internal Revenue Service. Residential Clean Energy Credit An upfront state rebate that reduces your purchase price, on the other hand, would come off the basis before you calculate the 30 percent credit.
Some Massachusetts locations also qualify for a federal energy community bonus under the Inflation Reduction Act. If at least 50 percent of your system’s capacity sits within an area with significant historical fossil fuel employment, a retired coal plant, or brownfield designation, an additional federal credit may apply. The IRS publishes maps identifying qualifying census tracts, and the determination is made based on conditions when construction begins.11Internal Revenue Service. Frequently Asked Questions for Energy Communities
Are SMART Payments Taxable?
Yes. SMART incentive payments are generally treated as taxable gross income on your federal return. Because the payments compensate you for energy production over time, the IRS views them as income rather than a nontaxable rebate. For any year in which your total direct SMART payments reach $2,000 or more, the utility issues a Form 1099-MISC.12Eversource Energy. When Is a 1099-MISC Form Required
Even if your payments fall below the 1099 threshold, the income is still technically reportable. For a residential system at the flat $0.03 per kWh rate the annual tax hit is modest. A typical 8 kW home system producing around 9,500 kWh a year would generate roughly $285 in SMART payments, keeping most homeowners well below the 1099 trigger. Larger commercial systems earning higher base rates almost always clear it. Factor after-tax income into your payback estimate.
Selling a Home With a SMART Contract
The SMART tariff contract generally transfers with the property. A buyer inherits the remaining years of guaranteed incentive payments, which can make a solar-equipped home more attractive. Have your installer or the program administrator confirm the transfer process with DOER before closing.
If you financed the panels through a lease or loan, the lender likely filed a UCC-1 financing statement to secure its interest in the equipment. Freddie Mac requires that any UCC-1 filing either be limited to the solar equipment or be subordinated to the mortgage before the loan can be sold on the secondary market.13Freddie Mac. Solar Panel FAQ If your UCC-1 is too broad, the fix is usually a UCC-3 amendment from your solar financing company restricting the filing to the equipment. A title insurance endorsement covering the panels is an alternative Freddie Mac will accept. Surface the issue early. Buyers’ lenders flag it during title review, and resolving it under contract eats into your closing timeline.