Solar plus storage can also improve winter reliability and reduce gas consumption, according to a report from Synapse Energy Economics and the Solar Energy Industries Association.
Continued growth in solar and storage deployment in Massachusetts could save ratepayers $313 million annually through 2030, according to a study by Synapse Energy Economics and the Solar Energy Industries Association (SEIA).
The analysis comes as officials in Massachusetts consider legislation and policy changes to manage the energy affordability crisis. Massachusetts has some of the highest electricity rates in the United States.
The report shows that if Massachusetts meets the solar and storage deployment goals set out in the SMART 3.0 incentive program, taxpayers could save $313 million per year by 2030. The state policy aims for about 3.5 GW of added solar by 2030. On the larger New England benefits, the benefits amount to $684 million, the report said.
By bringing more solar energy and storage online, 80% of the savings come from lowering wholesale electricity prices, meaning every utility customer in Massachusetts will see a lower “supply fee” on their bill regardless of whether they have panels on their own roof, the report said.
The report explains that the wholesale market works like an auction. Every day, power plants submit bids to supply electricity. Grid operator ISO New England first accepts the cheapest bids (wind, solar, nuclear) and moves to more expensive bids (gas, oil) until the state’s demand is met. The last, most expensive power plant needed to meet demand determines the price everyone pays.
Solar energy and storage have almost no ‘marginal costs’ because the sun is free and the batteries are already charged. If they participate in the auction, they will be at the bottom of the list.
By adding 3.5 GW of solar and storage, as planned in SMART 3, the state is “pushing” the most expensive power plants, often older, inefficient natural gas plants, out of the auction.
Instead of an expensive gas plant setting the market price at $0.10 per kWh, pushing it out with a cheaper source could set it at $0.08 per kWh, the report said. Because that 2-cent drop applies to every megawatt purchased in the state at that time, the savings adds up to millions of dollars very quickly.
Program change
SMART 3.0 was established by the Healey-Driscoll government in October 2025, changing the model from a ‘declining block’ incentive in SMART 2.0 to one where incentive values are adjusted on an annual basis.
Under previous versions of SMART, the state established fixed capacity blocks (e.g. 100 MW). When a block was full, the incentive rate automatically decreased for the next block. However, this model assumed that solar energy costs would always decrease. In reality, inflation and supply chain issues caused costs to rise, but incentives continued to decline. Ultimately, the incentive became so low that new projects were no longer financially viable, causing the industry to “hit a wall.” As a result, Massachusetts dropped from a top-5 solar state to 26th placee in deployment, SEIA said.
SMART 3.0 replaces the declining block incentive value with an annual adjustment model. During the annual adjustment, administrators survey developers to see the true costs of steel, labor and panels. If participation rates in a particular market segment (such as solar or low-income solar) are too low, administrators can increase the rate to boost interest rates. And if the state falls behind on its 2030 climate goals, they can increase the total allowable capacity for that year.
Winter months
The study found that solar energy and storage can also significantly reduce Massachusetts’ dependence on natural gas and provide significant savings during the winter months.
Nearly 44% of the avoided energy cost benefits from solar and storage occur during the winter (November to March), when the electric grid is most stressed and natural gas prices are most volatile, the report said. During the peak winter hours of 2030, solar and storage are expected to meet approximately 11% of total demand, significantly reducing the state’s reliance on expensive, gas-fired generation.
Continued growth in solar and storage would avoid the use of 29 billion cubic feet of natural gas, equivalent to 25% of the natural gas currently used by the Massachusetts electric sector. By 2030, the planned expansion would avoid 1.6 million tons of CO2 emissions annually, equivalent to taking roughly 350,000 cars off the road. Find the full study here.
“Solar and storage resources are driving down wholesale energy prices. This report quantifies the economic and reliability benefits of solar and storage in Massachusetts at a time when electricity affordability is becoming increasingly concerning,” said Selma Sharaf, Associate at Synapse Energy Economics.
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