On May 19, 2026, the Massachusetts Dept. of Public Utilities (DPU) approved a full redesign of the Commonwealth’s primary solar incentive program, Solar Massachusetts Renewable Target (SMART), altering how solar projects will be funded, how much ratepayers will pay and how fast new solar capacity can come online. Solar developers, ratepayers and clean energy observers should all pay attention.
What changed?
The DPU approved two updated model tariffs without changes: (i) a revised SMART 2.0 Provision and (ii) a new SMART 3.0 Provision. SMART 3.0 is the bigger story, as it makes fundamental changes to how the program works.
The previous program used a “declining block” structure. Incentive rates were set at the start and dropped as capacity increased. Under SMART 3.0, the Department of Energy Resources (DOER) will annually adjust incentive rates, capacity allocations and other program features. The new program moves DOER from a fixed structure to one that adapts annually by adjusting tariffs 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 about $4.5 billion over 20 years. That covers solar projects enrolling in program years 2025 and 2026. The number dropped from an earlier $6.7 billion projection, mainly because fewer projects enrolled in 2025 than expected.
The DPU acknowledged that these are large numbers but concluded that the prior method of cost measurement (projected net-dollars-per-megawatt-hour over decades) no longer fits a program that adjusts every year. The underlying notion is that a program that responds annually to current data can manage costs better than one built on 20-year projections.
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 before July 2026 will lose eligibility. Without timely approval of the new tariffs, Massachusetts solar projects risked losing those federal credits entirely.
A special concern for Unitil customers
One concern stands out — Unitil is the Commonwealth’s smallest electric utility, serving approximately 1% of Massachusetts’ electric load, but under the new rules, every utility must receive at least 5% of the statewide solar capacity. That mismatch could result in Unitil’s small customer base paying a larger share of program costs than its size warrants. The DPU flagged the problem and told Unitil and DOER to work together to shorten the imbalance.
What’s next for the solar industry?
This DPU order is only the start. Here is what comes next:
- Company-specific tariff filings. Each utility must file its own SMART 2.0 and SMART 3.0 tariffs. Once approved, DOER can issue final qualifications, and incentive payments can start flowing.
- Phase II of this proceeding. The DPU reserved several issues for a second phase. These include the DPU’s formal role in DOER’s annual Program Assessment. They also include whether to add cost controls such as budget caps, benefit-cost analyses, or a stakeholder advisory council.
- The annual program assessment. Beginning in 2026, DOER will run a full-year cycle of data collection, cost modeling and stakeholder review. The results will set program parameters for the following year. Solar developers should plan to submit comments each fall, when draft program year reports come out.
- Customer bill impacts. The utilities did not provide bill-impact estimates for 2025 and 2026 in this proceeding; those numbers will appear in annual SMART Factor filings. Ratepayer advocates will be watching.
- The ITC deadline. Developers have a narrow window to qualify projects and commence construction before federal tax credits expire. Expect a rush of interconnection activity and applications over the coming months.
The bottom line
Massachusetts is betting that an annually adjusted data-driven incentive program will serve both clean energy goals and affordability better than the prior rigid model. DPU’s approval clears the way for SMART 3.0 to launch; however, the real test arrives when annual assessments begin, costs hit customer bills and regulators decide whether the program requires legislative 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 advising on state incentive programs. She assists in 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 drafting and negotiating a broad set of renewable energy agreements including power purchase agreements, solar leases, and financing documents. Her practice also consists of advising clients on renewable energy regulatory issues, purchasing and selling renewable energy projects, and negotiating agreements related to solar tax equity matters.
