Massachusetts homeowners considering solar have some of the most generous incentives in the country. At the center is the Solar Massachusetts Renewable Target (SMART) program, which pays a long-term production incentive to residential solar owners, layered with the federal investment tax credit, property tax exemptions, and robust net metering. Together, these programs help Massachusetts solar systems pay for themselves faster than in most states.

How SMART Works

SMART is run by the Massachusetts Department of Energy Resources (DOER) and funded by the state's major electric utilities: National Grid, Eversource, and Unitil. Customers of those utilities who install qualifying solar systems receive a monthly incentive payment for every kilowatt-hour (kWh) of electricity their system produces.

For residential systems, that payment continues for 10 years. Commercial systems typically receive payments for 20 years. The per-kWh rate is locked in at the time of enrollment, so owners know exactly what their incentive will be for the life of the contract.

The total value of a homeowner's SMART participation depends on:

System size and production
The block and tier rate assigned at enrollment
Adders for low-income status, energy storage pairing, building-mounted systems, and other qualifying factors

Why SMART Replaced SRECs

Before SMART, Massachusetts ran an SREC (Solar Renewable Energy Certificate) market. Under SRECs, homeowners earned credits for every megawatt-hour of production and sold them to utilities on a market that could swing wildly in price. SMART replaced that volatility with a predictable, declining-block structure. Each new block of capacity locks in at a slightly lower per-kWh rate than the last, but every enrollee receives a consistent payment for the full 10-year term.

For homeowners, this means fewer surprises. Rather than speculating on SREC prices, owners can underwrite their solar project against a known revenue stream.

What It Adds to the Savings Math

Massachusetts homeowners who install solar typically stack four major savings streams:

Federal residential clean energy tax credit. Currently 30 percent of installed cost, nonrefundable.
SMART incentive payments. Monthly cash payments based on kWh produced, paid for 10 years.
Net metering credits. Excess production sent to the grid offsets future electric bills.
Massachusetts personal income tax credit for solar. A state credit covering a portion of the system cost, up to a modest cap.

The state also exempts residential solar equipment from sales tax and prohibits the added value from solar from increasing the home's property tax assessment for a defined period.

The Storage Adder

One important SMART feature is the storage adder. Systems that include a qualifying battery storage system receive a higher per-kWh incentive. Homeowners who add storage gain three benefits at once:

Backup power during outages
Higher SMART incentive
Federal tax credit coverage for the battery itself

For homeowners in areas prone to storms or grid disruption, pairing storage with solar has become one of the more attractive upgrades in the Massachusetts market.

The Low-Income Adder

SMART has explicit carve-outs designed to steer solar to low-income households. Qualifying low-income residential customers receive a significantly larger per-kWh incentive, and Solar Access programs help cover installation costs. These provisions are part of the state's effort to make sure the clean energy transition is not limited to higher-income homeowners.

For renters and residents of multi-family housing, community solar subscriptions connected to SMART-enrolled projects offer savings without requiring rooftop installation.

How to Enroll

Enrollment in SMART is usually handled by the solar installer as part of the project. After permits are approved and interconnection is complete, the installer files the SMART application with the utility. Once approved, the homeowner starts receiving monthly payments or bill credits, depending on utility-specific rules.

Homeowners should confirm:

Whether the installer is enrolled with the utility as a SMART participant
The system size and rate block the project will be assigned to
The expected monthly payment over the 10-year term
Whether the SMART payment comes as a check or a bill credit

Pairing SMART With Financing

Massachusetts has a strong market of solar-specific loans, home equity lines of credit, and cash-out refinance products that work well with SMART. The program's predictable revenue stream helps borrowers and lenders alike: homeowners can plan monthly payments knowing their SMART credits, and lenders can underwrite against a known incentive structure.

For customers paying cash, SMART simply improves payback math. A typical homeowner-owned system in Massachusetts can pay back its net installed cost in six to ten years depending on production, block rate, and electric use.

What to Watch

SMART is not static. DOER periodically adjusts rates, adds new tiers, and reopens capacity blocks. The program has moved through multiple rate revisions, including a 2023 update that expanded residential eligibility and rebalanced incentives. Homeowners and installers should confirm the current rate block and any adders that apply to their specific project, rather than relying on outdated figures.

Common Questions

Do I have to pay taxes on SMART payments? SMART payments to residential owners are generally treated as taxable income at the federal level, but individual tax situations vary. Consult a tax professional.
Can I use SMART with a lease or PPA? Yes, but incentive payments typically flow to the third-party owner, not the homeowner. Owner-purchased systems capture the most direct benefit.
What if I sell my house? SMART contracts generally transfer to the new owner along with the solar system, preserving the remaining payment stream.
Can I add storage after the system is installed? Often yes, but retroactive SMART enrollment as a storage-paired system may not be possible. It is usually best to plan storage from the start.

Bottom Line

Massachusetts homeowners pursuing solar have an unusually strong set of tools. SMART anchors a 10-year revenue stream, federal credits slash upfront cost, net metering offsets bills, and state tax incentives add the final layer. For most Massachusetts homes with good solar exposure, a well-designed system offers both immediate savings and decades of ownership-level returns.

Massachusetts SMART Solar Rebate Program Drives Homeowner Savings