On May 19, 2026, the Massachusetts Dept. of Public Utilities (DPU) has approved a complete redesign of the Commonwealth’s primary solar incentive program, Solar Massachusetts Renewable Target (SMART), changing how solar projects will be financed, how much ratepayers will pay and how quickly new solar capacity can come online. Solar developers, taxpayers and clean energy observers should all pay attention.
What has changed?
The DPU has approved two updated model tariffs without change: (i) a revised SMART 2.0 provision and (ii) a new SMART 3.0 provision. SMART 3.0 is the bigger story because it makes fundamental changes to the way the program works.
The previous program used a ‘descending block’ structure. Incentive rates were set at the beginning and decreased as capacity increased. Under SMART 3.0, the Department of Energy Resources (DOER) will adjust incentive rates, capacity allocations, and other program features annually. The new program moves DOER from a fixed structure to one that adjusts annually by adjusting rates based on current real-world data, including operating costs, market conditions and policy goals.
How much will this cost?
The utilities estimate that SMART 3.0 will cost ratepayers approximately $4.5 billion over the next 20 years. That includes solar projects enrolling in program years 2025 and 2026. The number is down from a previous projection of $6.7 billion, mainly because fewer projects are enrolled in 2025 than expected.
The DPU acknowledged that these are large numbers, but concluded that the previous method of measuring costs (projected net dollars per megawatt hour over decades) is no longer appropriate for a program that is adjusted every year. The underlying idea is that a program that responds annually to current data can control costs better than a program that is based on 20-year forecasts.
Why the rush?
Why did this change come about so quickly? The One Big Beautiful Bill Act, which became federal law in July 2025, phases out the federal investment tax credit (ITC) for solar projects. Projects that do not meet construction milestones by July 2026 will no longer be eligible. Without timely approval of the new rates, solar projects in Massachusetts risked losing these federal credits entirely.
A special concern for Unitil customers
One concern stands out: Unitil is the Commonwealth’s smallest electric utility, serving about 1% of Massachusetts’ electric load, but the new rules require each utility to receive at least 5% of statewide solar capacity. This mismatch could result in Unitil’s small customer base paying a larger share of the program costs than its size warrants. The DPU identified the problem and told Unitil and DOER to work together to reduce the imbalance.
What’s next for the solar industry?
This DPU order is just the beginning. Here’s what comes next:
- Company-specific rate requests. Each utility must submit its own SMART 2.0 and SMART 3.0 rates. Once approved, DOER can issue final qualifications and incentive payments can begin to flow.
- Phase II of this procedure. The DPU reserved several issues for a second phase. This includes the DPU’s formal role in DOER’s annual Program Review. They also include whether to add cost controls, such as budget caps, benefit-cost analyzes or a stakeholder advisory board.
- The annual program assessment. Beginning in 2026, DOER will conduct a full-year cycle of data collection, cost modeling, and stakeholder assessment. The results will determine the program parameters for the following year. Solar developers should plan to submit comments each fall when draft program year reports are released.
- Impact on customer accounts. The utilities did not provide estimates of the bill’s impact for 2025 and 2026 in this proceeding; these figures will appear in the annual SMART Factor registrations. Taxpayer advocates will be watching.
- The ITC deadline. Developers have a limited period to qualify projects and begin construction before federal tax credits expire. Expect a rush of interconnection activities and applications in the coming months.
The bottom line
Massachusetts is betting that an annually adjusted data-driven incentive program will serve both clean energy and affordability goals better than the previous, rigid model. DPU’s approval paves the way for the launch of SMART 3.0; The real test, however, comes when annual reviews begin, costs hit customers’ bills and regulators decide whether the program requires regulatory guardrails. For the solar industry, the message is simple: the opportunity is real and the clock is running.
Tanya M. Larrabee, partner at Sherin and Lodgen, represents renewable energy clients in the acquisition, development and financing of solar, wind and energy storage projects, including advice on state incentive programs. She assists with complex renewable energy transactions, including advising lending institutions and borrowers on construction and term financing for clean energy projects and advising developers, commercial property owners and landowners on local permitting, project development and leasing for solar and battery energy storage projects. She works directly with clients to draft and negotiate a wide range of renewable energy agreements, including power purchase agreements, solar leases and financing documents. Her practice also includes advising clients on renewable energy regulatory issues, purchasing and selling renewable energy projects, and negotiating agreements related to solar tax issues.
