Net Metering

Summary

*Note: In January 2023, the Department also opened an investigation (Docket No. 23-20) to implement revisions made according to Section 55 of the 2022 Clean Energy Act (H.B. 5060). Section 55 amended the Single Parcel Rule by allowing Class I, Class II, and Class III solar net metering facilities located on the same parcel as other solar net metering facilities to receive net metering credits if certain requirements were met. The Department approved the changes via an order filed in late November 2024. 

In February 2024, the Department of Public Utilities amended the net metering rules. The rule changes added a first-in-the-nation mechanism that allows new solar net metering, and cap-exempt class II and class III facilities, to transfer credits across the state's distribution companies and the state's three ISO-NE load zones; and credits can also be transferred to customers in more than one company service territory. You can find a summary of the rule changes by clicking here.

The Department approved further rule changes in late November 2024 in accordance to the 2022 Clean Energy Act, after a rulemaking was opened in late July 2024, with the Department ordering that cap exempt net metering facilities that generate credits now have a max nameplate capacity of 25 kW (up from 10 kW). Additionally, for a Class I facility that is a cap exempt facility serving on-site load, utilities will be required to credit/pay the host customer for any net metering credits that are accrued in excess of their annual consumption, to be valued at the utilities' avoided cost rate, among other modifications. 

Eligibility and Availability

In Massachusetts, the state's investor-owned utilities are required to offer net metering. Municipal utilities are not obligated to offer net metering, but they may do so voluntarily. (There are no electric cooperatives in Massachusetts.) 

Massachusetts has three categories of net metering facilities:

• Class I Facilities: any type of generating system up to 60 kilowatts (kW) in capacity. 
• Class II Facilities: systems greater than 60 kW and up to 1 megawatt (MW) in capacity that generate electricity from agricultural products, solar energy, or wind energy. 
• Class III Facilities: systems greater than 1 MW and up to 2 MW in capacity that generate electricity from agricultural products, solar energy, or wind energy. 

Legislation in 2010 introduced an additional definition for "a net metering facility of a municipality or other governmental entity.” This type of net-metered facility must be either Class I, Class II, or Class III, as defined above and owned by a municipality or governmental entity, or the entity must use all of the facility's output. Facilities owned by a municipality or other governmental entity up to 10 MW in aggregate capacity are eligible for net metering. 

Aggregate Capacity Limit

In aggregate, municipal or governmental facilities may not exceed 8% of the distribution company's peak load. Private facilities may not exceed 7% of the distribution company's peak load. Class I systems equal to and under 25 kW are exempt from the private aggregate capacity limit. Other exemptions include Class I (over 25 kW), Class II, and Class III systems that executed an interconnection agreement starting January 1, 2021. Class II and Class III systems include those that serve on-site load, generate renewable energy, and are not a municipal or other governmental entity facility). Massachusetts requires that the utilities report on their aggregate capacity of net-metered facilities regularly, since in some instances utilities may be approaching the caps

Because there are aggregate capacity limits in place, the Department of Public Utilities (DPU) passed a "System of Assurance of Net Metering Eligibility" in May 2012 for customers of investor-owned utilities. This serves as a net metering queue to help potential net metering customers know in advance if their system will be allowed to net meter or not. All investor-owned utility customers subject to the state's aggregate caps that wish to net meter must apply for a "cap allocation" online via the Massachusetts Application for Cap Allocations website. There is a $100 application fee, and the applicant must have an Interconnection Service Agreement from the utility.

Net Excess Generation

The treatment of customer net excess generation (NEG) varies by facility class and customer type. In all cases, NEG is monetized and net metering credits are calculated based on the excess kilowatt-hours (kWh) produced. The value of the net metering credits at the end of a billing period is slightly less than the utility’s full retail rate for Class I solar and wind facilities, Class II facilities, and Class III facilities used by government customers as they would receive credit for the default service, distribution, transmission, and transition charge. Net metering credits for Class III facilities that are used by customers other than government entities differ only in that they do not receive credit for the distribution component. 

Any new Class I, Class II, and Class III solar net metering facilities (except those exempt from the state's aggregate capacity limits) submitting an Application for Cap Allocation, having received approval from the Department of Energy Resources, will receive "market net metering credits" for NEG. Market net metering credits are equal to slightly less than the utility's full retail rate for facilities of governmental entities, but are equal to 60% of this rate for all other solar facilities.

Credit Transfer

Credits may be carried forward to the next month indefinitely, and credits from net metering facilities (including Class I, Class II, or Class III facilities, excluding new solar net metering facilities and cap-exempt Class II and Class III facilities) must be transferred, as it is determined by the customer hosting the facility, to another customer of the same utility as long as they are within the same service territory and ISO-NE load zone. New solar net metering, cap-exempt Class II, and cap-exempt Class III facilities must transfer credits – again, as it is determined by the customer hosting the facility – to customers of a utility in the state, and may transfer credits to customers within more than one utility service territory.

Third-Party Ownership

Third-party-owned systems may be net-metered. 

Renewable Energy Certificate Ownership

Utilities are not granted renewable energy certificates or environmental attributes generated by a net-metered facility.

Capacity Rights

ISO-New England Forward Capacity Market rights of Class II and III net metering facilities transfer to the utility when enrolled in net metering and the utility is obligated to participate in the forward capacity market with the facilities. The utility will not have capacity rights for Class I net metering facilities, small hydro projects, or energy storage paired with net metering facilities. The capacity rights of systems participating in the SMART program's Alternative On-Bill Credit mechanism transfer to the utility. 

Monthly Minimum Reliability Contribution

Utilities may adopt a monthly minimum reliability contribution (MMRC) for net-metered customers, subject to DPU approval, once the state reaches 1,600 MW in aggregate solar capacity. The DPU may exempt or modify these requirements for low-income ratepayers. Utilities may assess a demand charge if it is based on the system peak during peak hours of system demand and affected customers are regulatory informed about how the charge is assessed and ways to manage and reduce demand.

Energy Storage

Eligible net metering facilities that are paired with energy storage systems to net meter must be under the three following configurations: (1) the storage system charges only from the net metering facility and cannot export, (2) the storage system charges only from the net metering facility and can export, and (3) the storage system charges from either the grid or the net metering facility and cannot export.