ABE WALTERS GETS CHOKED UP the more he talks about it.

Standing in his backyard, Walters described the tedious, eight-month process for securing a $100,000 loan from the Massachusetts Community Climate Bank to add solar panels and battery storage to his Bellingham home, which now includes two electric vehicles and a newly installed heat pump.

The ordeal was like a full-time job, said Walters, who works as a peer liaison with patients suffering from mental health and addiction issues at Taunton State Hospital. He got a slew of estimates from different energy installers and sifted through shifting tax credits to make it all pencil out, so that he could finally escape the volatility of natural gas prices, lock in a lower rate, and cut his utility bill roughly in half.

When his loan closed in December, Walters, who already has some solar panels on his roof from a prior installment, thought he was in the clear. All he had to do was wait for his electric utility, National Grid, to finish its study of his project and approve it, since Walters will need to connect to the electrical system in order to sell excess power back to the grid.

But in March, loan in hand and installer ready to get to work, Walters received the biggest shock of the whole process. His project would only be approved if he pays National Grid nearly $12,000 up front to upgrade the transformer serving his house to handle the increased electrical load, according to the service agreement issued by National Grid and reviewed by CommonWealth Beacon.

“I almost want to cry because this is the right thing to do,” said Walters, who lives in a state-designated environmental justice community. “When I found out about the loan, I was like, ‘I cannot afford not to do this.’ The economics are just compelling. It’s the right thing to do, in my pocketbook and in my heart and in my head.”

Walters’s case exemplifies the wonky last-mile barriers that can get in the way of solar and storage projects hooking up to the electrical grid — a process known as interconnection — as energy costs continue to climb and climate commitments that demand a sweeping green energy transition creep closer.

In Massachusetts, as in most states, utilities are allowed to charge the customer that triggers the need for an upgrade — in this case, Walters — the full cost. That occurs even if the upgraded piece of infrastructure serves multiple homes and businesses, like many transformers do.

The system is thus turned into a game of chance based on when you happen to get in line: If one neighbor adds solar and eats into the available capacity but doesn’t trigger the upgrade, the next home to add solar may push the transformer past its limit and get penalized just for going second. Once that homeowner pays for the upgrade, the third homeowner that adds solar will reap the benefits of the new transformer’s expanded capacity without paying for the costs.

“It’s like Russian roulette,” said Ben Underwood, co-CEO of Resonant Energy, a Boston-based solar company, who also serves on a panel set up by the Department of Public Utilities (DPU) to evaluate this issue.

It could, Walters warned, pit neighbors against each other.

“I don’t want to get into a neighbor war,” he said. “I’m not expecting a free ride. I just want it to be equitable.”

When a cost as high as nearly $12,000 gets dropped on a customer like Walters so late in the process, it can significantly alter the math for a project, add yet another complication to navigate, and make it prohibitive for the average homeowner — even though the state wants residents to electrify heating systems, buy electric vehicles, and pursue clean energy sources like solar.

“This is not just a person here or there,” said Nathan Phelps, managing director for the regulatory hub at the nonprofit advocacy group Vote Solar and a former senior economist at the DPU. “This is becoming a pervasive issue.”

The problem isn’t new and isn’t unique to Massachusetts. But a working group that includes utility representatives, members of the solar industry, and state officials filed a proposal late last month to the DPU to overhaul the way these interconnection costs are spread out.

That pitch, from the Interconnection Implementation Review Group (IIRG), calls for customers of National Grid, Unitil, and Eversource looking to install residential solar projects to pay a $225 fee to cover up to $10,000 of necessary grid improvements per project (or up to $1,450 for Unitil customers). It’s a solution similar to ones that states like Connecticut, Maine, and Minnesota have recently established to avoid the last-minute sticker stock of huge upgrade costs for individual customers seeking solar interconnection.

National Grid said that between January 2024 and September 2025, 649 out of 703 applications requiring grid improvements cost $10,000 or less. For Walters, under the current proposal, he would need to pay the difference beyond $10,000.

“This structure covers the large majority of projects and minimizes the ‘last’ customer from bearing costly upgrades alone,” National Grid wrote in its portion of the filing.

The DPU didn’t respond to a request for comment on the proposal. But Michael Judge, undersecretary of energy, wrote in an email to Walters late last month that was shared with CommonWealth Beacon that “it is very likely that the DPU will approve the proposal as filed or with minor modifications.” The regulators are “motivated to act quickly on this,” he added, though he cautioned that he’s not sure how long that will take or how it will impact projects already underway.

That sense of urgency is only mounting.

Massachusetts residents are paying some of the highest electricity prices in the nation, according to new data from the Lawrence Berkeley National Laboratory, and energy affordability is now the top household concern in the state, one recent survey found. Gov. Maura Healey is pursuing an “all of the above” strategy to produce more energy that meets rising demand, but the state remains off track with ambitious climate commitments to halve greenhouse gas emissions by 2030 compared with 1990 levels. At the same time, lawmakers are debating whether to slash a key energy efficiency program.

Massachusetts has lagged on new solar installations in recent years. The state was already falling short of Healey’s goal to deploy 10 gigawatts of solar by 2028 before Republicans in Washington eliminated federal tax credits incentivizing solar and energy efficiency projects last year.

“Residential solar is not at a standstill in terms of interconnection,” said Kate Tohme, co-chair of the IIRG and director of interconnection policy at the Massachusetts-based renewable energy developer New Leaf Energy. “But this has clearly become a significant issue that needs to be addressed. I don’t think there’s anyone in the Commonwealth right now that’s opposed to establishment of an alternative cost allocation for residential homeowners.”

Eversource and National Grid estimate that approximately 3 percent, or about 700 customers for each utility, out of the thousands of solar interconnection requests in the last few years triggered grid upgrades that required payment. That number is around 14 percent, or 185 customers for Unitil.

The vast majority of the upgrade fees charged to homeowners, when they’re needed, pay for new transformers that can safely handle more electricity flowing back to the grid, especially on a sunny day when multiple homes’ solar panels are producing maximum output.

Yet the relatively small percentage of customers that need to pay for grid upgrades doesn’t capture the full impact of these cost burdens.

Data from Eversource and National Grid show that many communities across Massachusetts are already at grid capacity, meaning that under the current model the next interconnection request in those areas would likely trigger costly upgrades and stifle future solar projects.

Plus, word of these unexpected costs can spread fast with significant impacts.

“The number one reason why people go solar is because their neighbor or a family member or a friend went solar,” said James Manzer, regional vice president of the New England solar company ReVision Energy and head of the IIRG’s subgroup that developed the new cost-share proposal. “That is a national trend that’s been going on for more than a decade. The opposite is true. Your friends, neighbor, family member perceived that they got screwed over by an upgrade that was caused by no reason that they could understand. They’re telling all those people.”

Those costs appear to be rising, too: Eversource said in its filing that the total amount charged for interconnection upgrades in the first six months of 2025 was more than for all of 2024. The mean upgrade cost for Unitil between January and September 2025 was $5,000 more than the company’s mean cost between January 2023 and September 2025.

“In many situations, people cannot overcome this hurdle,” Phelps said.

The costs, even for a fraction of the Bay Staters looking to install solar power, are proving to dampen uptake of the clean energy source, according to the Massachusetts Community Climate Bank, which helped Walters finance his project with a 20-year loan at a 0.5 percent interest rate.

The bank, which launched in 2023 and offers low-cost financing options for decarbonization projects through its energy saver program, wrote to regulators in August expressing frustration over the issue and petitioning for the DPU to course correct.

One low-income homeowner, according to the climate bank, was told that her transformer upgrade would cost $14,500 after already closing on a second mortgage, using all available incentives, and cutting down trees to prepare for the solar installation, leaving her with no option but to downsize her project to avoid triggering the upgrade. The change in the scope of the project meant the homeowner lost out on an additional annual savings of $525, according to the bank.

“The utility’s decision to charge a customer for interconnection is typically communicated to our borrowers after they have signed a contract with a solar installer, locked in their total project cost and closed on their … loan,” Maggie Super Church, the bank’s director of policies and programs, wrote to the DPU. “Receiving notice of an interconnection payment this late in the process can lead to cancellation or reduction in scope of solar installation projects and creates enormous difficulties and delays for homeowners who are not able to absorb this additional expense.”

While the DPU evaluates the working group’s proposal, the issue has also gotten the attention of Healey, who is searching for ways to reduce high energy costs and eliminate the red tape holding back new projects.

A little-noticed provision of her executive order last month establishing a goal to bring 10 gigawatts of new energy into the state by 2035 would require each utility to offer payment plans that allow solar developers to pay for interconnection costs over time, instead of all at once in a lump sum.

For Walters, who’s still “stuck in limbo,” it feels like one big messy maze — with a lot on the line. The more the situation drags on, the longer he has to wait for his energy savings to come to fruition, and the longer the installer potentially doesn’t get paid, risking the whole deal and the loan that makes it all possible.

In theory, the new cost-share proposal could significantly benefit Walters – but there are still no easy solutions.

On Wednesday, Walters received word from the climate bank that he has two options. He could either downsize his project to a quarter of what has been planned to avoid triggering the upgrade and its nearly $12,000 price tag.

Or he could withdraw the project altogether, wait for potential DPU approval of the cost-share plan, and resubmit to avoid the expensive upgrade costs, since the new fee structure would only be effective going forward and can’t be applied retroactively. That new interconnection approval will likely take between three and six months after regulators adopt the plan, according to the climate bank’s email to Walters.

All that waiting, Walters said, will cost him about $500 per month in electric bills.

“I don’t think anybody wants this to fall apart,” he said. “But right now, the burden feels like it’s being placed on me.”