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Solar Farm Development in Massachusetts

Updated: Apr 1

Solar Farm Development in Massachusetts

What Should Landowners Know About Solar Farm Development in Massachusetts?

As of April 2024, Massachusetts is a well-established state for solar farm activity and development. The state already has over 500 operating utility-scale solar farms with a combined solar capacity of over 2,000 MW. With total solar investment in the state reaching $11.2 billion as of 2024, the trajectory is poised for substantial expansion. Projections indicate a substantial addition of 1,528 MW over the next five years.


The Massachusetts market's dynamics are influenced by net metering and a renewable portfolio standard featuring a solar objective, complemented by an associated SREC market. Initiated in 2018, the Solar Massachusetts Renewable Target (SMART) program has spurred substantial solar expansion within the state, serving as a model for emulation by other states. These initiatives underscore a concerted effort towards diversifying the state's energy portfolio and embracing sustainable solutions. 


The number of solar farms in Massachusetts has been increasing exponentially over the past decade. This is a direct result of the implementation of various incentives promoting renewable energy generation across the state. Many solar developers are actively planning new projects across the state. This presents a great opportunity for landowners to earn a steady stream of income from their land through solar lease payments, also known as solar payments. 


Landowners in Massachusetts are receiving offers from developers to lease their land for solar farms. They often wonder how much their land is worth for a solar farm and if they are receiving a good offer. Leasing land for solar farms helps landowners provide their future generations with long-term financial stability. Several factors go into solar farm valuations that landowners and realtors should consider. 


LandGate is a marketplace that provides data intelligence to landowners while also providing them the opportunity to connect with Massachusetts solar developers. Traditionally, developers would knock on landowners' doors or cold-call them. This old-fashioned way is not easy for landowners. It can be perceived as unwanted solicitation at a time when the landowner is not ready and doesn’t have enough information to feel comfortable talking about a solar farm on their land.


LandGate provides useful data to landowners or to their agents to inform them for free about the value of their land for solar farm leasing. Equipped with more information, landowners can make good and fast decisions about pursuing a solar lease.


What is the Process for Leasing Land for a Solar Farm in Massachusetts?

Step 1: Solar Lease Negotiation Period in Massachusetts

The solar lease negotiation process is the first step landowners take when interested in having a solar farm on their property. Land professionals can assist landowners during this period to make sure they are receiving the best deal possible but also understand the time between signing the lease and having an active solar farm on their land. 

  • During the negotiations, landowners can negotiate solar lease payments, the length of the lease for the solar farm, and the percentage of the escalator to combat inflation.


Step 2: Solar Lease Option Agreement in Massachusetts

The next step is for the landowner to get a solar farm option agreement. At that point, the solar developer has done a preliminary study, also called a feasibility study, to know if the site is potentially suitable for solar farm development.


Why Can’t I Get a Solar Lease Agreement Directly?

The process of a solar farm project in Massachusetts begins with optioning the land, which is called “site control” by developers. The reason solar developers cannot go straight to a solar lease is that they have to evaluate the land thoroughly.


Typically the initial screening study is good enough that this first due diligence process is all that is needed. Another larger uncertainty for solar developers is to know if the solar project will be accepted by the utility on the electrical infrastructure (or electrical network). We refer to this phase as “utility’s application” in the graph above and developers refer to this phase as “queue submission”. This means that the solar project enters the interconnection queue of that region waiting for regulatory approval. 

  • These queues are known as Independent Systems Operator (ISO) or Regional Transmission Organization (RTO).


During this period, the analysis of possible engineering and land factors is conducted to determine the feasibility of the project to be constructed and connected to the grid. This is the reason why the solar developer starts with an option, as not all solar projects are approved by the ISO/RTO.


How Likely Will My Massachusetts Solar Option Become a Solar Lease?

At the moment, about 20% of solar options become a solar lease and are built into a solar farm. Currently, the electrical infrastructure network is a big bottleneck. There are more applications of solar projects to get on transmission lines than available capacity. 


However, governments are aware of this situation and are working to ease it, to foster more solar development. This means that it will likely get resolved in the next few years. The problem of available capacity applies only to utility-scale solar farm projects, which are typically greater than 5 MW capacity. 


Where Can a Landowner Get More Information About the Solar Lease / Option Period in Massachusetts?

LandGate assists landowners with determining the value of their land for a solar farm. We do this by taking into account the proximity of substations, transmission lines, and state incentives - each of which plays a role in site control.


Am I Getting Paid During the Solar Option Period?

Yes. Solar payments start during the option period but are usually smaller compared to the solar payments during the lease or construction phase of the solar farm.


Step 3: Solar Lease Agreement in Massachusetts

Once the availability of grid capacity is confirmed, the solar project is moved to a “planned” phase. During this time, the developers will exercise the solar farm option agreement to become a solar farm lease agreement. Typically larger solar rent payments start at this time.


Step 4: Solar Farm Construction in Massachusetts

Solar payments are phased as the project progresses. It starts with small solar lease payments during the option phase. Then it increases during the solar lease phase, it increases again during the construction phase of the solar farm, and the largest solar payment occurs when the solar farm is active and generating electricity.


How Long Does It Take to Build a Solar Farm in Massachusetts?

Usually, it will take between 1 to 2 years to build a utility-scale solar farm. It takes less time to build a community solar farm since they are usually smaller in size.


Step 5: Active Solar Farm in Massachusetts

After the construction has been completed, the solar farm is now considered ‘active.’ For landowners, this phase is called ‘production,’ as it signifies that their land is currently producing energy for the electrical grid that it is interconnected with. The production phase lasts anywhere from 25 to 50 years depending on what was negotiated on the lease.


What Can a Solar Farm Power In Massachusetts?

In Massachusetts, the average solar farm size is 48.9 acres generating approximately 4.6 megawatts (MW) of electricity when operating under optimal conditions. This output has the potential to cater to the energy needs of around 3,674 households as the typical electricity consumption of an average household in Massachusetts stands at 10,968 kilowatt-hours per year.


What is the Impact of the IRA and Other Factors in Massachusetts?

Massachusetts solar incentives have encouraged solar companies to develop more projects across the state. Additionally, favorable market conditions for electricity prices are encouraging investment into the solar sector in Massachusetts. Landowners and real estate agents should have an understanding of these incentives and market conditions to be prepared for potential offers for solar project deals.


  • Inflation Reduction Act: This bill passed in 2022 and became effective at the beginning of 2023 provides incentives to reduce renewable energy costs for organizations on a business, educational institution, and state level. More specifically, in Massachusetts, solar energy is eligible for a tax credit.

  • Renewable Portfolio Standard (RPS): The Renewable Portfolio Standard (RPS) in Massachusetts, launched in 1997 and expanded in 2008 through the Green Communities Act, sets mandates for renewable energy use. It is divided into Class I and Class II categories, requiring retail electricity suppliers to meet minimum percentages of kilowatt-hour sales from eligible renewable sources.

    • Class I includes solar PV, wind, hydroelectric, biomass, and geothermal energy, with additional emphasis on in-state solar through programs like the Solar Carve-Out and Solar Carve-Out II.

    • The Class II RPS, established in 2009, mandates a portion of sales from pre-1998 renewable systems, including solar, wind, hydroelectric, biomass, and waste energy from municipal solid waste combustion.

    • The Massachusetts Department of Energy Resources periodically adjusts these standards to drive progress toward renewable energy targets and environmental sustainability.

  • Solar Massachusetts Renewable Target (SMART) Program: This provides ongoing payments to homeowners with solar systems. Eligible customers of Eversource, National Grid, and Unitil can receive a fixed rate per kilowatt-hour of electricity generated, with rates varying based on individual circumstances. These payments last for 10 years, with incentives gradually decreasing over time.

  • Net metering programs: These programs enable homeowners to earn bill credits for surplus electricity fed back into the grid, which can offset future electric bills. However, unlike in some other states, such as Florida, these credits cannot be converted into cash payments.

  • The Residential Energy Credit: This is available to all Massachusetts state taxpayers who install solar panels in their homes, offering a tax credit equivalent to 15% of the total installation cost, capped at $1,000.


The increase in LMP pricing has made solar energy an attractive option for electricity generation in Massachusetts. LMP is a pricing method used in electricity markets to determine the cost of electricity at specific locations (called ‘nodes’) within the electrical grid.  

  • A PPA (Power Purchase Agreement) is a contract between a renewable energy developer (such as a solar company) and a power purchaser (such as a utility). Over the last three years, Massachusetts has experienced a slight decrease in PPA pricing by 0.17% and an average LMP price increase of 70.5% (this is expected to further increase by 14.3% in 2024). 


In the context of solar energy projects in Massachusetts, the relationship between LMP and PPA pricing lies in how the PPA sets the pricing terms for the electricity being sold. The stable price in the PPA provides certainty to the solar developer about the revenue they will receive for the electricity that they produce. Meanwhile, the LMP serves as the market price for electricity at a specific node.


Rising LMP prices have incentivized investment in solar infrastructure statewide given higher demand and thus greater revenues for solar energy producers; rising LMP prices have also increased electricity costs for consumers and businesses, which has slightly slowed the production of renewable energy in the state.


As a result, the number of solar projects added to the interconnection queue has decreased, but given the mass expansion of the SMART program and the variety of statewide solar incentives in Massachusetts, this has ensured that solar projects are still on the rise in the state. 


Commercial, Community, & Behind-the-Meter Massachusetts Solar Farms 

Typically, landowners and land professionals think of solar farms as huge plots of land covered in solar panels out in the middle of nowhere. However, this usually is not the case! In Massachusetts, active solar farms are typically 48.9 acres, allowing about 4.6 MW of electricity to be produced under ideal conditions. 


Commercial solar projects are the commonly largest energy projects being about 40+ acres of land. These solar farms usually feed their energy into the grid to the surrounding area. Realistically these solar farms can be any size as it depends on the capacity available within the grid. 


Community solar farms in Massachusetts serve energy customers directly within the same area or community. These solar farms tend to be smaller in size with acreage and megawatts. Community solar is different from residential solar as residential solar panels are found on top of rooftops. Community solar projects can be larger, it just depends on the location. 


Commercial, residential, and industrial solar farms are all considered to be behind-the-meter solar farms. Behind-the-meter means that they are intended to generate power primarily for on-site consumption rather than selling it to the grid. Community solar and utility-scale solar farms generate energy that is utilized in the grid to send it to all consumers a part of that grid. This means that they are front-of-the-meter solar farms. 


Massachusetts distinguishes itself in the realm of community solar by integrating incentives within its broader solar mandate instead of having a standalone program. This strategy has propelled the state to one of the highest rates of community solar adoption nationwide, boasting over 600 megawatts (MW) spread across 400 projects as of early 2024, ranking it as the third-largest market in the country. Despite having a total installed solar capacity of 4000 MW, community solar holds a substantial share of Massachusetts' solar energy landscape.


The Solar Massachusetts Renewable Target (SMART) Program, initiated in 2018, forms the cornerstone of the state's solar incentive structure. Operating with a declining block model and originally capped at 1600 MW, the program was doubled in 2020 to expedite the post-pandemic recovery of the solar market. SMART provides incentives over 20-year periods for solar farms exceeding 25 kilowatts (kW) AC in 200 MW blocks, with compensation rates decreasing by 4% for each subsequent block up to 16 blocks.


Additional incentives, known as adders, cater to various solar development priorities, with the Community Shared Solar adder being the most utilized, indicating a shift towards community-focused initiatives. With ample SMART program capacity available and anticipated federal incentives, Massachusetts is poised for further growth, particularly in low-income community solar projects.


Discover Land’s Value For Solar Leasing in Massachusetts

The solar energy industries within Massachusetts are growing to achieve energy goals for clean energy development. This makes it easier for landowners and real estate agents to participate in solar development deals. Landowners in Massachusetts can receive a free solar leasing estimate by identifying and claiming ownership of their parcel on our map. 




Realtors can assist their clients in learning about their property’s potential for solar energy by using LandGate’s tool, LandApp. Land professionals can utilize LandGate’s data and analytics to provide their clients with information about their resource’s potential.




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