Net metering in Massachusetts: What you need to know

The best states to go solar in all have at least one thing in common: beneficial net metering policies. Massachusetts' net metering policy allows property owners to send electricity generated by their solar panel system onto the grid and receive credit on future electric bills for excess energy produced by the system.

Net metering is critical in places with significant seasonal weather differences. When installers design solar panel systems, they consider roof size and electricity needs. Installers in Massachusetts and much of the Northeast also carefully consider geography and weather patterns. A 6 kilowatt (kW) system in Massachusetts will produce less electricity over a year than a 6 kW system in California because of the differences in weather patterns and sunshine.

To help you get the most out of your solar panels, your installer will cover as close to 100 percent of your electricity needs as possible, given the amount of available roof space and regional factors. Thanks to Massachusetts' net metering policy, solar system owners can "bank" net metering credits in the summer when there's more sunshine and more daylight hours. Then, they can use those credits to keep their monthly electricity costs low in winter.

Massachusetts currently has a cap on the amount of solar eligible for net metering. This cap varies depending on the utility company and whether the system is publicly or privately owned.

The cap most impacts large-scale solar panel farms (and their beneficiaries). Most Massachusetts homeowners don't have to worry about the cap because single-phased systems under 10 kW (like most residential systems) are exempt from it. Homeowners can install a system larger than 10 kW, but they must apply with the Department of Public Utilities (DPU) for a special cap allocation, which can be a long process with no guarantee of approval.

Massachusetts requires all regulated utility companies (including the three largest utilities in the state: National Grid, Eversource, and Unitil) to offer net metering. The Department of Public Utilities doesn't require municipal utilities to provide this service, but many are solar-friendly and offer some form of net metering regardless.

The two largest utility companies in the Bay State, National Grid and Eversource, have favorable net metering policies and bill solar homes based on their net electricity use.

National Grid and Eversource offer net metering credits covering distribution, basic service, transmission, and transition changes on Massachusetts electric bills for residential solar panel systems exempt from net metering caps. Credits are calculated and appear on your electric bill as a dollar amount for both utilities, not a kilowatt-hour (kWh) amount.

Net metering doesn't cover 100 percent of your monthly electricity bill. There are some charges that you're still responsible for paying as a customer of the utility, including:

• Fixed customer service charges the utility may have (these remain the same regardless of your energy consumption)

• Mandatory funds for energy efficiency or renewable energy programs

• Applicable demand charges

With either National Grid or Eversource, customers can choose (with certain limits) where to send their excess net metering credits. Many property owners choose to bank these credits and allocate them all to their own electric meters. You also have the option to virtually "offset" another utility customer's usage, as long as 1) the meter is under the same distribution company as your system (e.g., Eversource customers can only virtual net meter credits to another Eversource account) and 2) the meter is located in the same electricity load zone. Some property owners elect to donate net metering credits to non-profits in the area or nearby friends or family members that could use the discount on their electricity bill.

Curious about how net metering works at a high level? Check out our video.

One of the biggest incentives in Massachusetts right now is the Solar Massachusetts Renewable Target (SMART) program. Under SMART, solar customers are paid a fixed rate per kWh of solar production throughout the program (10 years for systems under 25 kW).

SMART is made up of blocks that each have a set per-kWh rate. As more solar system owners enroll, blocks fill up, and incentive amounts decrease. The SMART program rates also change based on your utility company. For example, a homeowner who uses National Grid for electricity may receive a lower tariff amount than a customer of Eversource, depending on the block they're eligible for.

The SMART incentive is separate from net metering, and you're eligible for both incentives if you go solar. Your SMART incentive payments will not include "the value of energy" if you receive net metering credits. The state does not want to double compensate you for this solar energy.

For example, in the proposed rate for Eversource Block 1, homeowners are eligible for a baseline incentive value of $0.34/kWh. Assuming that the value of energy (i.e., a similar rate to a net-metering credit) with Eversource averages out to roughly $0.18/kWh, a homeowner would receive a $0.16/kWh credit ($0.34/kWh SMART credit - $0.18/kWh net metering credit = $0.16/kWh). For an average 6 kW system in Massachusetts that produces 575 kWh a month, the SMART program is equivalent to an added incentive of $92 a month.

As with any big purchase, evaluate multiple offers from different installers. If you're looking for rough numbers to get an initial idea of cost, try EnergySage's Solar Calculator, which offers cost and savings estimates based on your electric bill and area. If you'd like to contact installers about your options, you can sign up on EnergySage to receive quotes from local installers to compare side-by-side. The calculator and custom quotes consider current incentives, including net metering.

Any reputable local installer will know your area's current net metering policies. Before signing a contract, ask what you'll still be responsible for paying on your electric bill post-solar. Many companies will also have sample electric bills for you to look at and see net metering credits in action.