Net metering caps remain tight, and a new state solar incentive is still on hold, leading to a slowdown in commercial solar growth in Massachusetts in the first half of 2018.

That's according to the latest U.S. Solar Market Insight Report from Wood Mackenzie Power & Renewables and the Solar Energy Industries Association.

"Solar companies have faced uncertainty in Massachusetts for a long time now, and the impact is showing," said David Gahl, director of northeast state affairs for the association. "It's slowing down what was once a major part of the economy."

Massachusetts installed 58 megawatts of solar in the second quarter, only about a third of the 161 megawatts it installed last year. Still, the state has 2,225 megawatts of total solar installed, enough to power 367,125 homes.

The state legislature this year failed to lift caps on solar net metering when it passed a compromise energy bill. The caps limit how much solar electricity can be fed into the grid in various utility territories. The net metering contracts are a key part of project finance.

Even without net metering, developers are waiting for state energy regulators to announce the launch of their SMART program, a flat incentive, with adders, poised to replace market-based solar renewable energy credits, or SRECs.

SMART stands for Solar Massachusetts Renewable Target, and the incentive's structure has been the topic of intense debate and negotiation before the Department of Energy Resources, according to GreenTechMedia.

Through SMART, Massachusetts hopes to procure up to 1,600 megawatts of new photovoltaic generation. Projects will receive tariff-based payments for 10 or 20 years depending on criteria such as size, siting, the presence of battery storage, and whether the project benefits low-income communities.

"Capacity blocks" for the SMART program will be available in service territories for Fitchburg Gas & Electric, Massachusetts Electric, Nantucket Electric, NSTAR, and WMECO, based upon the utility's distribution load.

Gahl said final rules on the SMART program will determine solar's future in the state. "We hope they decide the right way," he said of the Mass. Dept. of Public Utilities.

Nationwide, the solar market stumbled since the Trump administration last year announced tariffs on solar module imports, but recent data show signs of a turnaround, according to the report, which forecasts accelerated growth in the second half of 2018 driven by utility-scale projects.

Module prices are at their second-lowest in history even with a 30 percent tariff. "Except for residential photovoltaics, U.S. system prices are at their lowest levels ever," the report said.

Tariffs did dampen solar's growth, causing projects to be canceled or delayed, said Abigail Ross Hopper, SEIA's president and CEO: "Yet, this report also reveals that the solar industry is simply too strong to be kept down."

The U.S. Solar Market Insight Report projects a flat 2018 for the solar market as a whole.

Community solar continues to grow. Led by Massachusetts and Minnesota, more than 300 megawatts of community solar were installed in the first half of the year. The concept lets people subscribe to solar plants and receive credit on their electricity bills for their share of the power produced.