BOSTON — The green lobby is prodding lawmakers to lift a cap on solar-power incentives that it says is strangling fledging markets for renewable energy. Millions of dollars worth of projects hang in the balance.

The state’s net-metering program allows businesses and municipalities that create their own solar power to sell back unused energy to the regional grid at retail rates. The state caps the number of credits that can be distributed through regional electric utilities.

Solar companies say at least 171 communities in National Grid’s service territory in eastern Massachusetts have hit the cap on net metering.

“Massachusetts is basically sticking a needle in our eye by not extending the cap,” said Constantino Nicolaou, CEO of Panel Claw. The North Andover company is the nation’s largest provider of solar panel mounting equipment for commercial projects, he said.

“We’ve had more than $2 million worth of projects die on the vine,” he said.

Uncertainty over whether net-metering will expand — and the likelihood that a federal tax credit for solar will expire at the end of next year — has investors holding off financing new projects.

“We have another $4 to $6 million for next year in jeopardy unless the Legislature acts soon,” Nicolaou said.

Gov. Charlie Baker, a first-term Republican, has proposed raising the net-metering cap over several years to 1,600 megawatts from the current 875 megawatts. He said the plan, if approved by lawmakers, will bring the level of  subsides to $1 billion a year by 2020.

The Baker administration argues that the solar industry has matured, and it wants to wean companies off the net-metering subsidies, which it says are supported by taxpayers even if they don’t use solar power.

But environmental groups criticize his proposal, saying the industry still needs incentives to encourage growth and help the state hit benchmarks to substantially lower carbon emissions over the next decade.

The Senate already voted to lift the net-metering cap, and House leaders are working on a bill that raises it to 2,400 megawatts. The House version includes allows electric utilities to charge solar customers fees for the costs of maintaining transmission lines and poles.

House Speaker Robert DeLeo has said he expects to take up solar net-metering before lawmakers break for the holidays on Nov. 18, but it’s unlikely that the full Legislature will approve anything until next year.

“We need to keep the solar industry moving forward,” said state Rep. Linda Campbell, D-Methuen, who supports lifting the cap. “We’re going to have to come back and take a look at the subsidies, but need to take action now.”

Business groups, such as the Associated Industries of Massachusetts, say lifting the net-metering cap significantly will add to already hefty electric bills for non-solar consumers who are left with the cost of infrastructure upkeep.

Utility companies are also lobbying for tighter limits on net-metering.

Massachusetts ranked fourth in the nation for the amount of solar capacity installed last year, at 925 megawatts, according to the Environment Massachusetts Research and Policy Center.

The solar industry supports more than 12,000 jobs statewide at more than 370 companies including contractors, photovoltaic cell manufacturers and others, according to the Solar Energies Industry Association.

Dozens of projects in the Merrimack Valley and North Shore are in limbo as supporters await legislative action.

SunEdison, one of the nation’s largest solar companies, has a dozen projects on hold in Massachusetts including a 14 1/2-acre, 3.7-megawatt solar array on the site of the former Titcomb Pit landfill in Amesbury.

Orlando Pacheco, energy manager for the city of Haverhill, said the industry needs continued support from the federal and state governments. Allowing the sun to set on net-metering will throw shadows across the industry, he said, from financiers to manufacturers to contractors who install systems.

“For the industry, in general it’s going to create a tremendous amount of instability,” he said. “I think you’re going to see a lot of capital investment flee the state to other markets. We need to keep those jobs in the state.”

In recent weeks, solar advocates have made the case to lawmakers and the Baker administration that failing to lift the cap will disproportionately affect low-income residents. They’ve formed a coalition with members of the clergy and community activists, who are calling on Beacon Hill to take action.

“Solar energy decreases harmful forms of air pollution that affect public health, especially in urban areas and communities near fossil fuel facilities,” the coalition wrote in a recent letter to state leaders.

Paul DiMaggio, president of the Lawrence-based Delaware Valley Corporation, installed a 103-kilowatt solar array on the roof of his Tewksbury plant several years ago, saving the company about $18,000 a year in energy costs.

But he shelved plans to expand use of solar power, citing the uncertainty over net metering.

“It’s ludicrous,” DiMaggio said. “Solar is growing, and they’re going to cut the legs out from under the industry.”

Christian Wade covers the Massachusetts Statehouse for CNHI’s newspapers and websites. Reach him at cwade@cnhi.com.