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Incentives/Policies for Renewables & Efficiency

Printable Version
Net Metering   

Last DSIRE Review: 08/06/2014
Program Overview:
State: Massachusetts
Incentive Type: Net Metering
Eligible Renewable/Other Technologies: Solar Thermal Electric, Photovoltaics, Wind, Biomass, Hydroelectric, Geothermal Electric, Fuel Cells, Municipal Solid Waste, CHP/Cogeneration, Anaerobic Digestion, Small Hydroelectric, Fuel Cells using Renewable Fuels, Other Distributed Generation Technologies
Applicable Sectors: Commercial, Industrial, Residential, Nonprofit, Schools, Local Government, State Government, Fed. Government, Agricultural, Institutional
Applicable Utilities:Investor-owned utilities
System Capacity Limit:10 MW for net metering by a municipality or other governmental entity; 2 MW for all other "Class III" systems; 1 MW for all other "Class II" systems; 60 kW for all other "Class I" systems
Aggregate Capacity Limit:4% of utility's peak load for private entities; 5% of utility's peak load for municipalities or governmental entities
Net Excess Generation:Varies by system type and customer class
REC Ownership:Customer owns RECs
Meter Aggregation:Neighborhood net metering allowed
Web Site:
Authority 1:
M.G.L. ch. 164, ยง 1G et seq. (subsequently amended)
Authority 2:
Date Effective:
220 CMR 11.04
1997 (subsequently amended)
Authority 3:
Date Enacted:
Date Effective:
H. 4385
Authority 4:
220 CMR 18.00 et seq.
Authority 5:
220 CMR 8.00 et seq.
Authority 6:
Date Enacted:
Order Adopting Net Metering Rules (Docket 11-10)
Authority 7:
Date Enacted:
Date Effective:
Order Adopting a System of Assurance of Net Metering Eligibility Docket 11-11 A
Authority 8:
Date Enacted:
Net Metering Model Tariff
Authority 9:
Date Enacted:
S.B. 2395 (Session Law Chapter 209)
Authority 10:
Date Enacted:
Date Effective:
Order on Definitions of Unit and Facility Docket 11-11
Authority 11:
Date Enacted:
Date Effective:
Order Adopting Final Regulations D.P.U. 12-81-A

In Massachusetts, the state's investor-owned utilities must 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.) 

Class I, Class II, Class III net metering facilities
In Massachusetts, there are several categories of net-metering facilities. "Class I" facilities are generally defined as systems up to 60 kW in capacity. "Class II" facilities are generally defined as systems greater than 60 kW and up to one megawatt (MW) in capacity that generate electricity from agricultural products, solar energy or wind energy. "Class III” facilities are generally defined as systems greater than 1 MW and up to 2 MW in capacity that generate electricity from agricultural products, solar energy or wind energy. Massachusetts also allows “neighborhood net metering” for neighborhood-based Class I, II or III facilities that are owned by (or serve the energy needs of) a group of 10 or more residential customers in a single neighborhood and served by a single utility. The neighborhood facility may also serve additional customers (including commercial) as long as the base requirements are met. All net-metered facilities must be behind a customer’s meter, but only a minimal amount of load located on-site is required. In aggregate, these "non-governmental facilities" may not exceed 4% of the distribution company’s peak load.*

Municipal or Government net metering facility
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 II or Class III, as defined above, and must be owned by a municipality or governmental entity or the entity must use all of the facility's output. Net metering facilities by a municipality or other governmental entity up to 10 MW are eligible. In aggregate, these municipal or governmental facilities may not exceed 5% of the distribution company's peak load. 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.

For explicit definitions of "facilities" and "units," applicable to all types of net metering facilities, see the Department of Public Utilities' (DPU) Order on Definitions of Unit and Facility Docket 11-11 from August 2012.

The treatment of customer net excess generation (NEG) varies by facility class and customer type. In all cases, the NEG is monetized and Net Metering Credits are calculated based on the excess kilowatt hours (kWh) produced. In summary, 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 (kilowatt hour, kWh). Net Metering Credits for Class III facilities and neighborhood facilities that are used by customers other than government entities differs only in that they do not receive credit for the distribution component. Class II and Class III customers are required to install revenue-grade meters to measure kWh output.

Credits may be carried forward to the next month indefinitely, and credits from net metering facilities may be transferred to another customer of the same utility as long as they are within the same service territory and ISO-NE load zone. Utilities may choose to pay for the net metering credits for Class III facilities rather than allocating the credits. If a neighborhood facility has NEG at the end of a billing period, the credits are awarded to designated neighborhood customers. The amount of NEG attributed to each such customer is determined by the allocation provided by the neighborhood net metering facility.

Third-party owned systems may be net metered. Utilities are not granted the renewable energy credits or environmental attributes generated by a net-metered facility.

As part of the interconnection application, customers applying for net metering must complete "Schedule Z." See Massachusetts' Interconnection in DSIRE for more information.

Because net metering has an aggregate capacity cap, as described above, the DPU passed a "System of Assurance of Net Metering Eligibility" in May 2012 for customers of investor-owned utilities. This will serve as a net metering queue and help potential net metering customers know in advance if their system will be allowed to net meter or not.  The company, The Cadmus Group, Inc., has been chosen as the administrator of the system of assurance. All investor-owned utility customers with systems greater than 10 kilowatts on a single-phase circuit and all systems great than 25 kilowatts on a three-phase circuit wishing to net meter must apply for a "cap allocation" online via the Massachusetts Application for Cap Allocations web site ( There is a $100 application fee and the applicant must have an executed Interconnection Service Agreement (ISA) from the utility.


Net metering was originally authorized for renewable-energy systems and combined-heat-and-power (CHP) facilities with a generating capacity up to 30 kilowatts (kW) by the Massachusetts Department of Public Utilities in 1982. In 1997, the maximum individual system capacity was raised to 60 kW and customers were permitted to carry any net excess generation (NEG) -- credited at the "average monthly market price of generation" -- to the next bill. In July 2008, net metering was significantly expanded by S.B. 2768 and the DPU adopted rules implementing the law in June 2009. The Massachusetts Department of Public Utilities (DPU) amended net-metering rules in July 2009 (see final order). These DPU rules were ordered in accordance with the legislative changes instituted in 2008. Furthermore in August 2009, the DPU issued its model net metering tariff and new utility net metering tariffs for the state's investor-owned utilities (Unitil, National Grid, NSTAR, and Western Massachusetts Electric Company) became effective December 2009. The law was amended again in 2010 (H.B. 5028), and new rules promulgated in February 2012. A new model tariff and utility tariffs were finalized in July 2012 in Docket 12-01.

* For the purpose of calculating the aggregate capacity, the capacity of a net-metered solar facility is 80% of the facility’s DC rating at standard test conditions (STC) and the capacity of a net-metered wind facility is the name plate capacity.

  Morgane Treanton
Department of Public Utilities
Electric Power Division
One South Station
Fourth Floor
Boston, MA 02110
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Disclaimer: The information presented on the DSIRE web site provides an unofficial overview of financial incentives and other policies. It does not constitute professional tax advice or other professional financial guidance, and it should not be used as the only source of information when making purchasing decisions, investment decisions or tax decisions, or when executing other binding agreements. Please refer to the individual contact provided below each summary to verify that a specific financial incentive or other policy applies to your project.

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