Program Eligibility

(1) RPS Class I Eligibility. For each MWh of electricity generation produced by an STGU, it will be eligible to generate GIS Certificates encoded as RPS Class I Renewable Generation Attributes. These GIS Certificates and anyother GIS Certificates associated with Environmental Attributes other than RPS Class I Renewable Generation Attributes, shall be transferred directly to an account owned by the Distribution Company in whose service territorythe STGU is located upon issuance by NEPOOL GIS. The Distribution Company shall register the STGU with NEPOOL GIS and report the associated NEPOOL GIS Asset ID for each STGU to the Department no later than the date it issues an authorization to interconnect for an STGU. (2) RPS Effective Date. The RPS Effective Date shall be the earliest date on or after the Commercial Operation Date on which electrical energy output of an STGU can result in the creation of RPS Class I Renewable Generation Attributes. (3) SMART Program Effective Date(s). STGUs that receive a Final Statement of Qualification pursuant to 225 CMR 28.06(3) will be eligible to begin receiving incentive payments upon the effective date of the SMART Tariffs, as approved by the DPU. Revisions to the SMART Program that require amendments to the SMART Tariffs shall take effect upon review and approval of revised SMART Tariffs by the DPU. (4) General Eligibility Criteria for STGUs. (a) Technology, Capacity, and Interconnection Requirement. An STGU shall meet the following requirements: 1. use solar photovoltaic technology; 2. have a capacity of 5,000 kW or less; and 3. be interconnected with the electric grid in the Commonwealth of Massachusetts. (b) Active Statements of Qualification. To submit a Statement of Qualification Application under 225 CMR 28.06, a solar photovoltaic Generation Unit shall not have an active Statement of Qualification as defined under 225 CMR 20.00: Solar Massachusetts Renewable Target (Smart) Program or 225 CMR 14.00: Renewable Energy Portfolio Standard – Class I. 1. Construction Date Requirement for Program Years 2025 and 2026. Applicants submitting a Statement of Qualification Application in Program Years 2025, 2026, and thereafter upon request by the Department, shall demonstrate to the Department's satisfaction that on-site physical work of a significant nature had not begun on the solar photovoltaic Generation Unit prior to June 20, 2025. On-site physical work of a significant nature shall include, but not be limited to, the continuous installation of racks or other structures to affix photovoltaic panels, collectors, or solar cells to a site. 2. Exception to Construction Date Requirement for Low Income Properties. An STGU located on a Low Income Property that submits a Statement of Qualification Application shall not be subject to the requirements of 225 CMR 28.07(4)(b). For Program Years 2025, 2026, and thereafter, upon request by the Department, an STGU located on a Low Income Property shall demonstrate to the Department's satisfaction that on-site physical work of a significant nature has not begun on the solar photovoltaic Generation Unit prior to July 1, 2024. On-site physical work of a significant nature shall include, but not be limited to, the continuous installation of racks or other structures to affix photovoltaic panels, collectors, or solar cells to a site. (c) Distribution Company Owned Solar Photovoltaic Generation Units. Any solar photovoltaic Generation Unit that is owned by a Distribution Company and was approved to be constructed by the DPU, pursuant to M.G.L. c. 164, § 1A, shall not be eligible to qualify as an STGU under 225 CMR 28.00. (d) Public Utility Regulatory Policies Act of 1978 Requirements. An STGU with a maximum net power production capacity of greater than 1,000 kW shall obtain federal qualifying facility status from the Federal Energy Regulatory Commission pursuant to 18 C.F.R. § 292.207(a) and (b). (e) Energy Storage Requirement. All STGUs greater than 1,000 kW that do not qualify for a Locational Compensation Rate Adder shall be co-located with an Energy Storage System that meets the eligibility requirements of 225 CMR 28.07(5)(e)1. 1. Exceptions to Energy Storage Requirement for Good Cause. An STGU shall be exempt from the requirement of 225 CMR 28.07(4)(e) if it can demonstrate to the Department's satisfaction that it should be granted an exception for good cause. 2. Department Review of Exception Requests. The Department will review applications for exceptions under 225 CMR 28.07(4)(e) on a case by case basis. (5) Special Eligibility Criteria for STGUs. (a) Residential Third-party Owned 25 kW or Less STGUs. 1. Savings Requirement . Customers of Record on a residential rate class entering into an agreement for Third-party Owned STGUs shall receive on the first year of their Solar Contract a per-kilowatt-hour savings equivalent to 10% or greater of the Value of Energy for Net-metered Generation Units on an R-1 rate class applicable to the Customer of Record's service territory, calculated pursuant to 225 CMR 28.14(2)(a), in effect at the time of Solar Contract execution. At no point during the term of the Solar Contract shall the per-kilowatt-hour rate charged to the Customer of Record for the output of the Third-party Owned STGU exceed the per-kilowatt-hour rate the Customer of Record is charged by the Distribution Company for the same billing cycle, inclusive of any low or moderate income discounts applied to the Customer of Record's bill by the Distribution Company. Required documentation for demonstrating compliance with the savings requirement is detailed further in the Department's Guideline on Consumer Protection. 2. Maximum Escalator Rate. The escalator rate in a Solar Contract with a Customer of Record on a residential rate class may not exceed 3% per year. (b) Locational Compensation Rate Adders. 1. Brownfield and Landfill STGUs. In order to qualify as a Brownfield or Landfill STGU, an STGU shall be sited on locations that qualify as a Brownfield or Eligible Landfill. a. Exception to Executed ISA Requirement. STGUs applying as a Brownfield or Landfill STGU shall not be subject to the requirements in 225 CMR 28.06(1)(c)1. b. Exception to 5,000 kW Requirement. STGUs applying as a Brownfield or Landfill shall not be subject to 225 CMR 28.07(4)(a)2. and shall instead be permitted to be sized less than or equal to 10,000 kW. Such systems shall receive the Base Compensation Rate for 1,000 - 5,000 kW STGUs. c. Eligibility Determinations. Brownfield STGUs shall obtain a Pre-Determination Letter from the Department, pursuant to the process outlined in the Department's GuidelineRegarding the Definition of Brownfield. All final determinations regarding the eligibility of such facilities will be made by the Department, in consultation with MassDEP. 2. Canopy STGUs. In order to qualify as a Canopy STGU, 100% of the nameplate capacity of the STGU shall be located on a raised structure with not less than 75% of the nameplate capacity of the solar photovoltaic modules allowing for the continued use of the area beneath for a secondary function including, but not limited to, parking, pedestrian walkway, transportation infrastructure, storage of equipment, or canal, provided that such secondary function may not be agricultural production. 3. Dual-use Agricultural STGUs. In order to qualify as a Dual-use Agricultural STGU, an STGU shall meet the following criteria: a. Project Design Requirements. i. The STGU will not impede the continued use of the land beneath the solar photovoltaic modules for agricultural purposes; ii. the STGU is designed to optimize a balance between the generation of electricity and the agricultural productive capacity of the soils beneath; and iii. the STGU allows for continuous agricultural activities underneath the solar photovoltaic modules, with height enough for labor or machinery as it relates to tilling, cultivating, soil amendments, harvesting, and grazing animals. b. Project Specification Requirements. i. Panel Height Requirements. The panels of Dual-use Agricultural STGUs shall meet the following height requirements. (i) Fixed Tilt STGUs. For fixed tilt STGUs, the minimum height of the lowest panel point shall be eight feet above ground. (ii) Tracking STGUs. For tracking STGUs, the minimum height of the panel at its horizontal position shall be ten feet above ground. This minimum height may be reduced to eight feet if the maximum sunlight reduction requirement under 225 CMR 28.07(5)(b)3.b.ii. is still met in all tilt positions and the farm operator has functional control of the tracker control system to accommodate agricultural activities. ii. Sunlight Requirements. A Dual-use Agricultural STGU shall propose a sunlight reduction plan for the STGU based upon the compatibility of the STGU with the proposed agricultural crops and productivity. The plan shall utilize the best available information as indicators, including, but not limited to, photosynthetic active radiation and light saturation data and qualitative information. The maximum sunlight reduction from a Dual-use Agricultural STGU's panels on every square foot of land directly beneath, behind, and in areas adjacent to and within the STGU's design shall not be more than 50% of baseline field conditions during the Growing Season Hours, unless the Applicant can demonstrate that an exception should be granted pursuant to 225 CMR 28.07(5)(b)3.b.iv. iii. Maximum Direct Current (DC) Rating. The maximum DC capacity rating of a Dual-use Agricultural STGU shall be no more than twice the AC capacity rating of the STGU and shall not exceed 7,500 kW DC. iv. Exception from Project Specification Requirements. An Applicant may request that the Department, in consultation with MDAR, issue an exception from one or more of the Project Specification Requirements in 225 CMR 28.07(5)(b)3.b.i. through iii. Required documentation for an exception request is detailed further in the Department's Guideline Regarding the Definition of Dual-use Agricultural Solar Tariff Generation Units. c. Eligible Farmland. A Dual-use Agricultural STGU shall be sited on Land in Agricultural Use, land classified as Important Agricultural Farmland, Fallow Farmland, or on Newly Created Farmland. i. Newly Created Farmland. To be deemed Newly Created Farmland, the Applicant shall demonstrate the viability of agricultural production at the time a Pre-determination Application is submitted to the Department and MDAR and meet the below criteria. (i) Clearcutting Prohibition. No Newly Created Farmland Project Footprint shall be a result of the clearing or conversion of forest land that does not qualify as permissible tree clearing. Permissible tree clearing may include routine maintenance of existing field boundaries or roads, removing isolated trees in an existing cleared space, or other instances of routine agricultural activity as determined by the Department, in consultation with MDAR. (ii) Soil Test Requirement. For Newly Created Farmland, Applicants shall provide soil tests from the UMass Amherst Soils Testing Laboratory or equivalent, demonstrating pH and macronutrients are within optimum ranges for the crops proposed to be grown. d. Agricultural Plan. Applicants shall provide an agricultural plan detailing the agricultural activities to take place on the project site. A template for the agricultural plan shall be provided in the Pre-determination Application. i. Transitioning Greater than ten Acres of Farmland. If, as part of its Agricultural Plan, a Dual-use Agricultural STGU on Important Agricultural Farmland is proposing to transition greater than ten acres of farmland to grazing or hay production that has not been used for those agricultural purposes during any of the five crop years prior to the Pre-determination Application, the agricultural plan shall demonstrate that there will be concurrent growing of Comparable Crops to the existing operation for at least the first five years of the STGU operation, as determined by the Department, in consultation with MDAR, and detailed further in the Department's Guideline Regarding the Definition of Dual-use Agricultural Solar Tariff Generation Units. ii. New Commodities. The agricultural plan may include new commodities in the place of Comparable Crops provided that the plan includes the farmer's previous experience with or a working knowledge of the new commodity, an estimate or other information detailing the market viability of the new commodity, or a comparison of the economic value of the new commodity relative to current production. e. Eligibility Determinations. Dual-use Agricultural STGUs shall obtain a Pre-determination Letter from the Department, pursuant to the process outlined in the Department's Guideline Regarding the Definition of Dual-use Agricultural Solar Tariff Generation Units. All final determinations regarding the eligibility of such facilities will be made by the Department, in consultation with MDAR. 4. Floating STGUs. In order to qualify as a Floating STGU, an STGU shall meet the following criteria: a. Project Design Requirements. i. the STGU will not interfere with the continued use of the water body for its designated purpose; ii. the racking system shall be made of materials that have been tested for water quality impact and have been shown to have no or minimal impact; iii. the STGU shall use equipment that has been certified by the manufacturer to not contain PFAS; iv. the STGU will not be permitted in wetland resource areas and natural waterbodies such as salt ponds, or freshwater lakes and great ponds, as defined in M.G.L. c. 91; v. the ratio of the total surface area covered by the Floating STGU divided by the total surface area of the water body under standard conditions shall not exceed 50%; vi. the STGU shall be designed to minimize potential interaction with native species; vii. the STGU is a floating structure allowing for continued use and maintenance of the water body while generating electricity; and viii. the Applicant shall demonstrate to the Department's satisfaction that the water body was not constructed for the purpose of obtaining eligibility as a Floating STGU. b. Eligibility Determinations. Floating STGUs shall obtain a Pre-determination Letter from the Department, pursuant to the process outlined in the Department's Guideline Regarding the Definition of Floating Solar Tariff Generation Units. All final determinations regarding the eligibility of such facilities will be made by the Department, in consultation with MassDEP, MassDFG, or MDAR, as necessary. c. Capacity Limitation. The Department shall not qualify more than 40 MW of Floating STGU capacity under 225 CMR 28.00. d. Interconnection Application Date Requirement. Floating STGUs shall demonstrate that an application for an Interconnection Service Agreement was submitted to the Distribution Company prior to June 20, 2025. (c) Eligibility Criteria for Off-taker Based Compensation Rate Adders. 1. Community Shared STGUs. In order to qualify as a Community Shared STGU, an STGU shall meet the following criteria. a. Low Income Customers Requirement. Community Shared STGUs shall allocate no less than 40% of all Bill Credits generated by the STGU to Low Income Customers or allocate no less than 15% of all Bill Credits generated to Low Income Customers at no cost to the Low Income Customers. i. Low Income Customers Requirement for Alternative Community Shared Solar Programs, Municipal Load Aggregations. STGUs qualifying through a municipal load aggregation program established pursuant to M.G.L. c. 164, § 134 shall allocate 100% of electricity, energy cost savings, or Bill Credits generated to Low Income Customers. ii. Low Income Customers Requirement for Alternative Community Shared Solar Programs, Distribution Companies. STGUs qualifying through a community shared solar program established and administered by a Distribution Company shall allocate 100% of electricity, energy cost savings, or Bill Credits generated to Low Income Customers. b. Guaranteed Discount Requirement. Low Income Customers shall receive not less than a 40% discount on the value of allocated Bill Credits from the Community Shared STGU to the Low Income Customer. All other customers shall receive not less than a 20% discount on the value of allocated Bill Credits from the Community Shared STGU to the End-use Customer. This requirement shall not apply to End-use Customers on a non-residential rate class. i. Guaranteed Discount Requirement for Alternative Community Shared Solar Programs, Municipal Load Aggregation Programs. STGUs qualifying through a municipal load aggregation program established pursuant to M.G.L. c. 164, § 134 may satisfy 225 CMR 28.07(5)(c)1.b. by allocating to participating Low Income Customers in the form of electricity, energy cost savings, or Bill Credits an aggregate annual value equal to the product of: (i) 30% of the average annual value of an Alternative On-bill Credit for the rate class and Distribution Company of the STGU and (ii) the total annual kWh generated by the STGU. ii. Guaranteed Discount Requirement for Alternative Community Shared Solar Programs, Distribution Companies. STGUs qualifying through a community shared solar program established and administered by a Distribution Company may satisfy 225 CMR 28.07(5)(c)1.b. by allocating to participating Low Income Customers in the form of electricity, energy cost savings, or Bill Credits an aggregate annual value equal to the product of: (i) 30% of the average annual value of an Alternative On-bill Credit for the rate class and Distribution Company of the STGU and (ii) the total annual kWh generated by the STGU. c. Customer Disclosure Form Requirement. The Owner or Authorized Agent of a Community Shared STGU shall submit a copy of the customer disclosure form developed pursuant to 225 CMR 28.12(4) completed by each Customer of Record receiving electricity or Bill Credits generated by the Community Shared STGU as part of its Statement of Qualification Application. The customer disclosure forms shall be signed with a wet signature or an electronic signature software by the Customer of Record. i. New Customers of Record. The Community Shared STGU Owner or Authorized Agent shall provide updated customer disclosure forms for any new Customers of Record that receive electricity or Bill Credits generated by the Community Shared STGU after it is granted its Statement of Qualification. Any updated customer disclosure forms shall be submitted to the Department by no later than December 31st of the calendar year that they were signed. ii. Customer Disclosure Form Exceptions. (i) Exception for Alternative Community Shared Solar Programs. A Community Shared STGU maybe exempt from the customer disclosure form requirements in 225 CMR 28.07(5)(c)1.c. if the Applicant can demonstrate to the Department's satisfaction that the Customers of Record are enrolled without a customer contract. In these instances, the Applicant may be required to demonstrate that the Customer(s) of Record have received an explanation of benefits, pursuant to the documentation outlined in the Guideline Regarding Community Shared Solar Tariff Generation Units, or further Department guidance. (ii) Exception for Anchor Off-takers. Participants receiving Bill Credits in excess of those produced annually by 25 kW of nameplate capacity shall not be subject to 225 CMR 28.07(5)(c)1.c. d. Bill Credits. i. Allocation Requirement. Community Shared STGUs shall demonstrate to the Department's satisfaction that at least 90% of Bill Credits or electricity, or in the case of an Alternative Community Shared Solar Program, energy cost savings, have been assigned to valid and active utility accounts by the Incentive Payment Effective Date. ii. Bill Credit Requirements for Alternative Community Shared Solar Programs. Electricity. energy cost savings, or Bill Credits may be allocated through a municipal load aggregation program established pursuant to M.G.L. c. 164, § 134, or through a community shared solar program established and administered by a Distribution Company. Community Shared STGUs that qualify through such eligible programs shall submit satisfactory documentation to the Department as detailed in the Department's Guideline Regarding Community Shared Solar Tariff Generation Units. Community Shared STGUs that qualify through such eligible programs shall use an enrollment process consistent with M.G.L. c. 164, § 134 and any requirements established by the DPU. iii. Bill Credit Restriction for Anchor Off-takers. For Community Shared STGUs 100 kW or greater, no more than two participants may receive Bill Credits in excess of those produced annually by 25 kW of nameplate capacity, and the combined share of said participants' capacity shall not exceed 50% of the total capacityof the STGU. STGUs subject to this requirement must demonstrate that no individual or distinct legal entity will receive bill credits or electricity in an amount that exceeds the applicable limitations noted in 225 CMR 28.07(5)(c)1.d.iii., even if the credits are allocated across multiple utility accounts. 2. Low Income STGUs. In order to qualify as a Low Income STGU, an STGU shall meet the following criteria. a. Size Requirement. Low Income STGUs shall be 25 kW or less. b. Low Income Off-takers Requirement. Low Income STGUs shall satisfy at least one of the following criteria: i. provide 100% of the annual generation output as electricity or Bill Credits to a single Low Income Customer and be located on that Low Income Customer's residence; ii. provide at least 15% of the annual generation output as electricity or Bill Credits to one Low Income Customer at no cost to the Low Income Customer; iii. provide at least 15% of the annual generation output as electricity or Bill Credits to two or three Low Income Customers at no cost to the Low Income Customers, provided that a single Low Income Customer's annual usage is less than 15% of the Generation Unit's output; or iv. provide 100% of the annual generation output as electricity or Bill Credits to one or more qualified Low Income Properties. The Applicant shall provide satisfactory documentation to the Department that there is a minimum agreement term of 20 years for the Low Income Property to receive the generation output, as detailed in the Department's Guideline Regarding Low Income Generation Units. v. Requirement for Behind-the-meter STGUs. For Behind-the-meter STGUs satisfying the Low Income Off-takers Requirement under 225 CMR 28.07(5)(c)2.b.ii. or iii., the Applicant shall demonstrate to the Department that the STGU will have at least 15 % excess generation to allocate. vi. Requirement to Update Off-takers. If one or more Low Income Customer used to satisfy 225 CMR 28.07(5)(c)2.b.ii. or iii. no longer qualify as Low Income Customer, the Applicant shall replace that customer with an eligible Low Income Customer and update the Department of that update within 30 days of the previous Low Income Customer's change in eligibility status. 3. Low Income Property STGUs. In order to qualify as a Low Income Property STGU, an STGU shall meet the following criteria: a. Eligible Properties. Applicants shall provide satisfactory documentation to the Department that the recipient or recipients of the generation output meets the definition of Low Income Property. i. Private Entities. A private entity wishing to qualify as a Low Income Property shall demonstrate to the Department's satisfaction that: (i) at least 25% of the housing available at the properties to be served by the Generation Unit is required to be rented to households that are at or below 80% of the area median income; or (ii) at least 20% of the housing available at the properties to be served by the Generation Unit is required to be rented to households that are at or below 50% of the area median income. b. Generation Output Delivery. Applicants shall provide satisfactorydocumentation to the Department that the STGU is sited on a Low Income Property or 100% of the generation output will be delivered to one or more Low Income Properties in the form of electricity or Bill Credits. c. Third-party Owned Generation Units. If the STGU has a Third-party Owner, the Applicant shall provide satisfactory documentation to the Department that there is a minimum agreement term of 20 years or a demonstration of intent to renew the agreement for the Low Income Property to receive the generation output. d. Optional Pre-determination. Applicants may request a Pre-determination Letter from the Department, pursuant to the process outlined in the Department's Guideline Regarding Low Income Generation Units. 4. Public Entity STGUs. In order to qualify as a Public Entity STGU, an STGU shall meet the following criteria: a. Municipal or Government Property. For STGUs sited on property owned by a Municipality or Other Governmental Entity, the Applicant shall provide satisfactory documentation to the Department that either: i. The STGU is owned by the Municipality or Other Governmental Entity; or ii. The Owner has assigned 100% of the generation output in the form of electricity or Bill Credits to the Municipality or Other Governmental Entity. b. Private Property. For STGUs sited on privately owned property, the Applicant shall provide satisfactory documentation to the Department that either: i. The STGU is owned by the Municipality in which the STGU is sited; ii. The Owner has assigned 100% of the generation output in the form of electricity or Bill Credits to the Municipality or Other Governmental Entities in the Municipality in which the STGU is sited; or iii. The Owner has (i) assigned 100% of the generation output in the form of electricity or Bill Credits to Municipalities or Other Government Entities and (ii) not less than 15% of that output is assigned to the Municipality, or an Other Governmental Entity located in the Municipality, in which the STGU is sited. c. Contract Requirement. Applicants may apply for a Preliminary Statement of Qualification by providing satisfactory documentation to the Department that a Municipality or Other Governmental Entity has awarded a contract to develop an STGU. STGUs applying as a Public Entity STGU shall not be subject to the requirements in 225 CMR 28.06(1)(c)2. d. Exception to Executed ISA Requirement. STGUs applying as a Public Entity STGU shall not be subject to the requirements in 225 CMR 28.06(1)(c)1. (d) Other Compensation Rate Adders. 1. Solar Tracking Adder. In order to qualify for the Solar Tracking Adder, an STGU shall follow the path of the sun to maximize the solar radiation incident on the photovoltaic surface with a one or two-axis arraythat points the system directlyat the sun at all times and is designed to maximize possible daily energy generation. 2. Pollinator Adder. In order to qualify for the Pollinator Adder, an STGU shall obtain and maintain at least a silver certification from the University of Massachusetts Clean Energy Extension Pollinator-friendly Certification Program, or other equivalent certification as determined by the Department. n Annual True Up Payment= Rp • ~inv • ~tran • l Ei i=1 (e) Other Special Eligibility Criteria. 1. Energy Storage Systems. In order to qualify for the Energy Storage System Compensation Rate Adder, an STGU shall be co-located with an Energy Storage System that meets the following eligibility criteria: a. System Size. The STGU shall be greater than 25 kW. b. System Requirements. i. Minimum and Maximum Nominal Rated Power. The nominal rated power capacity of the Energy Storage System shall be at least 25%. The nominal rated power capacity of the Energy Storage System may be more than 100% of the rated capacity, as measured in direct current, of the STGU, but the STGU will receive credit for no nominal rated power capacity greater than 100% in the calculation of its Energy Storage Adder, pursuant to 225 CMR 28.13(3)(e)2. ii. Minimum and Maximum Nominal Useful Energy. The nominal useful energy capacity of the Energy Storage System co-located with the STGU shall be at least two hours. The nominal useful energy capacity of the Energy Storage System co-located with the STGU may be more than six hours, but the STGU will receive credit for no nominal useful energy capacity greater than six hours in the calculation of its Energy Storage Adder, pursuant to 225 CMR 28.13(3)(e)2. iii. Minimum Efficiency Requirement. The Energy Storage System co-located with the STGU shall have at least a 65% round trip efficiency in normal operation. c. Operational and Performance Requirements. i. Operational Requirements. The Energy Storage System shall be online and able to discharge at least 85% of the time during the Summer Peak Period and Winter Peak Period. The Energy Storage System may satisfy this requirement for either or both of the Peak Periods by participating in a demand response or grid services program. For any period that the Energy Storage System is not participating in a demand response or grid services program, the Energy Storage System shall demonstrate to the Department's satisfaction that it meets the operational requirements. If the Energy Storage System is decommissioned or non-functional for more than 15% of the Summer Peak Period or Winter Peak Period, the Department may disqualify the STGU from continuing to receive the Energy Storage System Compensation Rate Adder. ii. Performance Requirements. The Energy Storage System shall dispatch 100 complete cycle equivalents per year or shall participate in a demand response or grid services program. d. Standalone DC-coupled Solar with Energy Storage. DC-coupled STGUs with Energy Storage Systems will be eligible for annual true up payments to account for round-trip efficiency losses and compensate the Owner for the AC equivalent of the Renewable Generation of the STGU. The Department will use the following formula to calculate the true up payment and shall publish a Guideline on Energy Storage that explains the parameters and the process for annual compensation. 2. Special Provisions for Phased Interconnection. STGUs shall be subject to the following provisions if the Applicant can demonstrate to the Department's satisfaction that the STGU has an agreement with the relevant Distribution Company for phased interconnection. Phased interconnection shall mean a single STGU for which the Distribution Company has structured the STGU's authorization to interconnect with the total nameplate capacity occurring in two or more phases, where the initial phase is less than the total nameplate capacity. a. The Applicant shall submit a Statement of Qualification Application for the total nameplate capacity of the STGU and receive a capacity allocation pursuant to 225 CMR 28.06(4). The Interconnection Service Agreement shall demonstrate the timing of the phased interconnections. b. The Applicant shall submit the first authorization to interconnect to receive a Final Statement of Qualification including the Incentive Payment Effective Date for the STGU. c. After receiving an amended authorization to interconnect from the Distribution Company that includes the total nameplate capacity for the STGU, the Applicant shall submit it and receive a revised Final Statement of Qualification. The revised Final Statement of Qualification shall provide that the STGU is permitted to enroll and receive compensation under the SMART Tariff commencing on the Incentive Payment Effective Date of the original Final Statement of Qualification until the 20th anniversary of the Incentive Payment Effective Date included in the revised Final Statement of Qualification.