Living in Massachusetts often means dealing with high electricity bills, but solar energy offers a solution that is both cost-effective and eco-friendly. The great news is that Massachusetts solar incentives make going solar more affordable for homeowners by significantly reducing the cost of installation.
In 2024, there are even more incentives available that can help you significantly cut down on installation costs and make your solar investment pay off faster. With over 177,000 solar installations up and running, Massachusetts ranks 11th in the nation for solar energy production. Programs like the Solar Massachusetts Renewable Target (SMART) have been key to driving this growth. Since its launch in 2018, the SMART program has helped expand the state’s solar capacity by an additional 1,600 megawatts, making Massachusetts a leader in solar policy.
In addition to state programs, federal tax credits cover up to 30% of installation costs. State tax credits and local rebates further reduce expenses, making solar more accessible for homeowners.
Curious about how Massachusetts solar incentives can benefit you? Keep reading to learn how these programs can make switching to solar a smart investment for your home.
Massachusetts Solar Incentives, Tax Credits and Rebates Available in 2024
The state offers a variety of incentives to help you save on your solar installation, from tax credits to special programs that pay you for the energy you generate.
Here’s a quick look at the key solar incentives available in 2024:
Incentive | Type | Source | What it Means for You |
|---|---|---|---|
Federal Solar Tax Credit (ITC) | Tax Credit | Federal | Deduct 30% of solar installation costs from federal taxes. |
Massachusetts State Tax Credit | Tax Credit | State | 15% state income tax credit, capped at $1,000. |
Solar Property Tax Exemption | Tax Exemption | State | 100% exemption from increased home value due to solar. |
Sales and Use Tax Exemption | Tax Exemption | State | Exempt from 6.25% state sales tax on solar equipment. |
SMART Program | Payment Program | State | Payments per kWh of solar energy generated over 10 years. |
Net Metering | Bill Credits | State | Sell excess energy back to the grid for credits. |
Federal Solar Tax Credit (ITC)
The Federal Solar Investment Tax Credit (ITC) is one of the best ways to reduce the upfront cost of installing a solar energy system. This incentive allows you to deduct 30% of your total installation costs from your federal taxes.
For example, if you spend $26,000 on your solar setup, you can apply for a $7,800 credit when you file your taxes. The great thing is that this program is available until 2034, giving you plenty of time to take advantage of it. The sooner you act, the sooner you start saving on energy costs.
Massachusetts State Tax Credit
In addition to the federal tax credit, Massachusetts offers a state incentive that provides a 15% income tax credit specifically for solar installations. This credit is capped at $1,000 and applies only to primary residences. For instance, if you install a $20,000 solar system, you will reach the $1,000 limit and get that amount back when filing your state taxes.
The process is simple. Just use Massachusetts’ state tax forms to claim the credit. This step makes going solar more financially manageable, especially for homeowners looking to increase energy efficiency in their primary residence.
Solar Property Tax Exemption
One of the benefits of going solar in Massachusetts is the Solar Property Tax Exemption. Normally, when you make an improvement to your home, it increases the home’s value and, as a result, your property taxes. However, Massachusetts offers a 100% exemption on the added value from your solar installation.
This exemption lasts for 20 years, allowing you to enjoy the increased value of your home without the worry of paying more in property taxes. This makes solar not only a smart choice for energy savings but also a great investment in your property.
Sales and Use Tax Exemption
Massachusetts also provides a Sales and Use Tax Exemption for solar equipment purchases. The state waives the 6.25% sales tax, saving you money on the overall cost of your solar system. For a $26,000 system, you will save $1,625 with this exemption.
This exemption helps lower the cost of solar equipment, making solar power more affordable and accessible to homeowners in the state.
SMART Program (Solar Massachusetts Renewable Target)
The SMART program is another way to earn money from your solar system. Through this program, you get paid for the energy your solar panels produce. For every kilowatt-hour (kWh) of energy, you can earn between $0.19 and $0.31, depending on where you are located in the state. These payments continue for 10 years, providing ongoing financial benefits to help offset the cost of your solar setup.
To find out how much you could earn, there is an online SMART program calculator that estimates potential earnings based on your system’s output and location.
Net Metering in Massachusetts
Net metering allows you to save even more by selling the extra energy your solar system generates back to the grid. When your panels produce more electricity than your home needs, the excess energy is sent to the grid, and you receive credits on your electricity bill. Over time, these credits can significantly lower or even eliminate your utility bills, making solar a more attractive investment.
This is especially beneficial during sunny months when your system produces more energy than you can use. Utility companies in Massachusetts, such as Eversource, National Grid, and Unitil, offer net metering programs. Check their websites for details on how to apply.
Local Solar Rebates and Incentives
Massachusetts offers some fantastic local rebates that make going solar even more affordable. Many towns have programs designed to help you save on installation costs, making solar energy accessible for more people.
Municipal Light Plant Programs
Several towns in Massachusetts run their own rebate programs through municipal light plants, offering great savings for residents:
Concord: Residents can get a rebate of $625 per kilowatt (kW) of installed solar, with a maximum rebate of $3,125.
Hingham: HMLP has special solar incentives through its municipal programs. The exact amounts may vary, so it’s a good idea to check their latest offers.
Hudson Light & Power: They offer $1.20 per watt of solar installed, with a cap of $7,500 or 50% of your system’s total cost.
To find out what’s available in your town, visit your local municipal website. For example, you can apply through the Concord Municipal Light Plant or the Hingham Municipal Light Plant.
These local programs make it easier to go green while saving money. Be sure to check what your town offers to get the most out of your solar installation and lower your costs even further.
How to Apply for Solar Incentives in Massachusetts
Applying for solar incentives in Massachusetts can feel a bit overwhelming, but your solar installer will be there to guide you through the process. Here’s a quick rundown of how to get started with the most popular programs:
Federal Solar Tax Credit
To claim the Federal Solar Tax Credit, you’ll need to fill out IRS Form 5695 when you file your taxes. Detailed instructions are available on the official IRS website, so be sure to check those out.
Net Metering
To set up net metering, simply contact your utility company. They’ll explain the process and help you with any forms you need to fill out.
Property Tax Exemption
Massachusetts offers a property tax exemption for solar installations, helping you save even more. To find out if you qualify, simply reach out to the Massachusetts Department of Revenue for details.
Residential Renewable Energy Income Tax Credit
The Massachusetts Department of Revenue offers a tax credit for homeowners who have installed solar on their primary residence. To take advantage of this credit, be sure to connect with your tax preparer early in the season so you can fill out the necessary forms and apply without any hassle.
Sales Tax Exemption
When you buy solar equipment in Massachusetts, it is automatically exempt from state sales tax. There is no need to worry about any extra steps. Your solar installer will handle waiving the sales tax when you make your purchase. Simply confirm the exemption when you are finalizing the deal.
SMART Program
The SMART program provides financial incentives to help you earn money for the solar energy you generate. To get started, just head over to the SMART program website, fill out the application, and submit it.
If you’re unsure where to begin or need more specific advice, don’t hesitate to ask your solar installer for help. They’ll make sure everything is handled smoothly.
Is Going Solar in Massachusetts Worth it?
Solar energy adoption in Massachusetts has grown rapidly in recent years. The state now has over 177,000 solar installations, and solar power provides about 23.75% of its electricity. This growth reflects Massachusetts’ strong commitment to renewable energy.
According to the Solar Energy Industries Association (SEIA), Massachusetts is a national leader in solar energy. The state has invested $11.7 billion in solar power, which has not only improved the environment but also boosted the local economy and created over 11,000 jobs.
Homeowners in Massachusetts can benefit from several incentives. The federal tax credit covers up to 30% of installation costs, and the SMART program provides additional savings based on how much energy your system produces.
With these incentives, going solar in Massachusetts is a smart financial decision. The state’s dedication to renewable energy, combined with the economic benefits, makes solar an appealing option for both homeowners and businesses.
Frequently Asked Questions
How long does it take for solar panels to pay for themselves in Massachusetts?
In Massachusetts, solar panels usually pay for themselves in about 5 to 7 years. The exact time can vary depending on factors like the size of your system, how much electricity you use, and incentives such as the federal tax credit and the SMART program.
For example, a 5 kW system can save you about $1,000 yearly due to high electricity rates.
What is the average cost of solar panel installation in Massachusetts?
The cost of installing solar panels in Massachusetts typically ranges between $16,000 and $34,000. However, after applying incentives like the 30% federal tax credit and the 15% state tax credit, these costs drop significantly.
For example, a $20,000 system could end up costing around $14,000 after these savings.
Does Massachusetts have a free solar panel program?
While Massachusetts does not have a “free solar panel” program, it does provide plenty of incentives and rebates to help you save. Be cautious of the “free solar panels” myth. Some companies offer no-cost leasing or power purchase agreements, but in those cases, the solar company owns the system.
If you’re looking to lower upfront costs, consider $0-down solar loans and local rebate programs.
Are there solar battery incentives in Massachusetts?
Yes! The SMART program offers a Storage Adder for systems that include solar battery storage. Additionally, the Eversource ConnectedSolutions program pays you for sharing stored energy from your battery during peak times.
Plus, if you pair your solar system with a battery, you also qualify for the 30% federal tax credit.