In 2022, electricity bills in Massachusetts soared, prompting residents to explore alternatives to mitigate rising energy costs. Many homeowners are now considering the switch to solar energy as a viable solution. Although installing a solar power system entails an upfront investment, Massachusetts offers a range of solar incentives aimed at making solar more affordable and accessible.
Massachusetts Solar Tax Credits and Rebates
Massachusetts extends several solar tax credits and exemptions to help residents keep solar costs manageable. A tax exemption eliminates the need to pay taxes on specific services or items, while a tax credit directly reduces the amount of income tax owed.
Solar Massachusetts Renewable Target (SMART) Program
Similar to Solar Renewable Energy Credits (SRECs) in other states, Massachusetts’ SMART program enables homeowners to receive payments from their utility company for every kilowatt-hour (kWh) of solar power generated over a 10-year period. The utility company disburses these credits directly to the system owner upon approval by the Solar Program Administrator and the Department of Energy Resources (DOER). Eligibility for this program requires being a customer of one of three investor-owned utility companies in Massachusetts: Eversource, National Grid, or Unitil.
Residential Renewable Energy Income Tax Credit
The Residential Energy Credit is a prominent tax credit that benefits Massachusetts residents. It allows eligible homeowners or tenants residing in the commonwealth to claim a 15% state tax credit for purchased residential solar systems. However, the credit amount claimed in a single year cannot exceed the taxpayer’s personal income tax liability for that taxable year.
Solar Installation Property Tax Exemption
Installing a solar panel system increases a property’s value, but Massachusetts exempts residents from paying property tax on this added value for a 20-year period. It’s important to note that this exemption only applies to the added value brought about by wind or solar energy systems and does not exempt homeowners from general property tax obligations.
Home Solar Project Sales Tax Exemption
The Home Solar Project Sales Tax Exemption prevents homeowners from paying the 6.25% sales tax imposed by Massachusetts on their solar panel system. This exemption encompasses equipment directly associated with solar, wind-powered, or heat pump systems utilized as the primary or auxiliary power source for a residential property. However, the property must serve as the taxpayer’s primary residence.
Many solar systems generate surplus energy beyond a household’s consumption. Net-metering programs allow solar system owners to sell this excess energy back to their electric company, resulting in utility bill credits. In Massachusetts, Eversource and National Grid are the primary utility companies participating in net-metering.
Federal Solar Tax Credit
The federal investment tax credit (ITC) permits homeowners to claim a percentage of their solar system costs on their federal taxes. To qualify, homeowners must install the system within the tax year and own it outright or through a loan. Leased systems or power purchase agreements (PPAs) do not qualify. Currently, the federal credit amounts to 30% of system costs and related expenses. However, the credit will decrease to 26% in 2033 and 22% in 2034.
Living in Massachusetts doesn’t mean missing out on the benefits of clean energy. Homeowners in New England can significantly reduce their electricity costs by transitioning to solar power. Massachusetts ranks among the top 10 states actively promoting solar energy use and striving to reduce greenhouse gas emissions. To make the transition more affordable, the state offers numerous solar incentives.
Based on product quality, customer service, and warranty options, SunPower, Momentum Solar, and Trinity Solar feature in our top 10 list of solar companies. We recommend obtaining at least three quotes for comparison before making a final decision.
Top Solar Company in Massachusetts
The Solar Guys
Get a Free Solar Quote in Massachusetts
Get a free quote for solar panels in Massachusetts by giving The Solar Guys a call at (401) 632-6871 or by filling out our contact form. Our Massachusetts service area includes Framingham, Attleboro, Milford, Marlborough, Blackstone, and Boston, MA.