Massachusetts has been a leader in the development and implementation of statewide solar energy programs. Over the past decade, Massachusetts has had great success with their SREC I and SREC II block programs (“SREC” is an acronym for “solar renewable energy credit”). The Solar Massachusetts Renewable Target (“SMART”) program is the successor to the SREC II program, and officially went into effect on November 26, 2018.
The SMART program is similar to the previous SREC programs, but with several key differences. SMART facilitates the adoption of solar energy by providing incentives linked to blocks of solar energy production. Each electric distribution company may receive up to 8 blocks for their territory. The blocks promote both big (>25kW) and small (<25kW) facilities, which ensures flexibility for developers and customers. In addition, SMART includes “Adders” which increase the incentives for solar developments if they feature things like energy storage or community solar.
The SMART Application Process
1. Application for Preliminary Statement of Qualification. The application process begins with submitting an application for Preliminary Statement of Qualification. There are a handful of key documents that must be submitted with the application depending on the size of the solar facility.
For solar facilities less-than-or-equal-to 25 kW AC, the following must be included with the application: (i) turnkey contract from the installer, (ii) customer disclosure form, and (iii) low-income utility rate, if applicable.
For solar facilities larger than 25 kW AC, the following must be included with the application: (i) interconnection service agreement, (ii) site control, (iii) non-ministerial permits, and (iv) any documentation required when applying for Adders.
Upon review, applicants will have 10 days to address any issues. If the issues cannot be resolved within 10 days, the application will be rejected.
2. Issuance of Preliminary Statement of Qualification. If the application is approved, then the Massachusetts Department of Environmental Resources (“DOER”) issues a Preliminary Statement of Qualification, which will include the capacity block and base compensation rate. The issuance also marks the beginning of a 12-month Initial Reservation Period (If necessary, this initial reservation period may be extended with the submission of some additional paperwork).
3. Solar Facility Construction and Interconnection. After the Preliminary Statement of Qualification is issued, the Installer and Customer may proceed with construction of the solar facility. Upon completion, the solar facility may be referred to as a “Solar Tariff Generation Unit” or “STGU”, and it will be issued an Authorization to Interconnect from the utility.
4. Application for Claim and final Statement of Qualification. Once the STGU is operational and interconnected, the applicant files to Claim the reservation of the capacity block (from step #2). In the Claim filing, the applicant must show that the size of the STGU conforms to what was reserved, and must submit tax forms and payment information for the incentive payments.
At this time, the applicant will also be asked to submit the final as-built solar facility specs, which includes the equipment used, the size, ownership information, Adder eligibility, and a Schedule Z.
5. Issuance of Final Statement of Qualification. After successful review of the Claim and application for final Statement of Qualification, the DOER will issue a final Statement of Qualification, and the utility is notified of the applicant’s final approval and enrollment into the tariff.
Key Differences between SREC II and SMART
If you’re familiar with how SREC II worked, you’ll want to be aware of these key differences in the SMART program.
- Required Services provided by Installer. Under SMART, installers must include the following services when submitting applications on behalf of customers (225 CMR 20.06(1)(b)(1)):
- Responsibility for the Statement of Qualification Application process
- Submittal of authorization to interconnect
- Securing Permits and Engineering Approvals
- Installation of the Project
- Scheduling and participation in all required inspections
- Provide Warranty services, as required
- Application fee is required upon submission
- Two-Part Application process:
- Preliminary Application
- Before Interconnection
- Reserves facility’s position in Capacity Block
- After Interconnection
- Enrolls a facility in tariff in order to begin receiving incentive payments
- Preliminary Application
- Customer Disclosure Forms
- 25 kW and less. Applications for facilities <25kW AC or less must include a signed Customer Disclosure Form (there are different forms for direct owned vs third-party owned)
- Community Shared Solar. Recipients of credits from a Community Shared Solar facility must also sign a Customer Disclosure Form
- Electric Distribution Companies (EDCs)
- Meters, data and reporting. EDCs will own the production meters and will be responsible for collecting data and reporting to the NEPOOL GIS (New England Power Pool Generation Information System). Owner of the PV System is responsible for paying for the meter via the interconnection process
- Renewable Energy Certificates (RECs). EDCs own all of the RECs for the duration of the tariff term. Customers are required to sign a REC assignment form acknowledging the EDCs ownership of the RECs before enrolling in tariff
- Taxation of incentive payments. EDCs will issue a 1099 to all recipients of incentive payments annually. A W9 is required as part of application submission.
About the Author: T.J. Leitow is a corporate attorney based in Detroit. As In-House Counsel for a large commercial bank, he has extensive experience in renewable energy project finance.