We’ve
previously covered the Massachusetts Department of Energy Resources (“DOER”)
emergency regulations released last month for the
SMART 3.0 Program, which significantly revise DOER’s Solar Massachusetts Renewable Target (“SMART”) tariff-based incentive program supporting the development of solar in Massachusetts.
This post focuses on a key change in the newest iteration of SMART: the introduction of mitigation fees for solar projects that are located on land that has not been previously developed.
For SMART 3.0, DOER’s new regulations establish a mitigation fee which must be paid by ground-mounted solar projects with a capacity greater than 250 kW that: (a) are sited on land not previously developed and (b) are not eligible for location-based adders, such as the brownfield adder or a dual-use agricultural adder. This fee will be set on a project-by-project basis in accordance with forthcoming guidance that DOER has not yet released.
Generally, the fee will be determined using a formula that sets a fee per acre relative to the project’s impact on the undeveloped land, based on six different factors:
- Carbon Storage;
- Ecological Integrity;
- Critical Natural Landscape;
- Agricultural Potential;
- Cumulative Impacts; and
- Grid Alignment.
After the mitigation fee is calculated, project developers may request a review of the fee to determine whether DOER’s criteria scoring presents “a clear and obvious discrepancy from on-site conditions.” Additionally, to avoid excessive fees for certain projects, DOER may exempt projects from paying a mitigation fee if the project developers have already paid mitigation fees for environmental restoration and conservation in accordance with other state regulations (such as the Site Suitability Methodology for Clean Energy Infrastructure or regulations established in accordance with G.L. c. 25A, § 21).
Once a mitigation fee for a project is set, the project applicant must pay 25% of the total fee when it submits the project’s Statement of Qualification Application and the remainder when it requests the Final Statement of Qualification. The fees will be deposited into a trust fund controlled by the Executive Office of Energy and Environmental Affairs, which will support conservation, ecosystem, and biodiversity programs. If a project does not achieve commercial operation, applicants are eligible to receive a refund for any amount of the mitigation fee that they paid, provided the land has not been materially impacted.
The mitigation fee replaces the “greenfield subtractor” that was previously included in the SMART Program. The greenfield subtractor approach reduced the compensation rates for some projects that fell into disfavored categories. It involved a sometimes complex land use classification system that contributed to confusion and logistical challenges. The new approach looks to have its own complexities, and the scope of fees remains uncertain. The approach of imposing mitigation fees to be allocated to a mitigation fund, rather than reducing payments under the program, is also a significant change. Whether SMART 3.0’s new mitigation fee system will be an improvement over past practice will depend on how it is implemented, including the scope of the fees imposed and whether DOER’s process for calculating the fee is straightforward and efficient.
DOER held three public hearings on the SMART 3.0 regulations on July 24 and 25 and will be accepting written comments until 5:00 PM on July 25, 2025.
Logan Malik, a summer associate, participated in co-authoring this blog post.
