Making Solar Energy More Affordable
Federal and Massachusetts Incentives Are at Their Peak
In 2019 buyers of residential solar energy systems get the benefit of significant credits and savings created to help Massachusetts reach its Renewable Energy Portfolio targets and the Clean Energy Standards.
The federal government offers tax credits, while the Commonwealth offers a combination of state tax credits and other savings. A few cities and towns offer other savings and rebates, too.
Tax Credits
With the 2022 Inflation Reduction Act, U.S. DOE updated federal solar investment tax credits as follows:
30% for solar energy systems meeting the minimum progress requirements before 01/01/2032
26% for solar energy systems meeting the minimum progress requirements before 01/01/2033
The taxpayer is able to deduct up to the limited amounts over a period years as needed.
The Massachusetts DOER established a similar solar investment tax credit as follows:
15% up to $1,000 including installation
The system must be installed on a primary residence
The taxpayer is able to deduct up to the limited amounts for up to 3 years as needed.
Production Based Financial Incentives (SMART)
A Massachusetts solar tariff assigning a specific value to power sent back to utilities via the grid.
- The program replaces and simplifies the earlier SREC and SRECII programs.
- Designed to facilitate adding 3,200 MW of solar energy capacity to the state grid, doubling the original 1,600 MW as a result of a mid- 2020, extension.
- With the expansion, it creates 16 blocks of declining incentives, each limited to approximately 200 MW.
- Gives the homeowner 10 years of predictable income, locked in at the time of installation.
To learn more about the value of SMART program credits and the urgency to apply in 2019, visit Understanding Massachusetts Solar Incentives.
Other Tax Exemptions
The state of Massachusetts offers exemptions for solar energy investments:
- Equipment sales tax exemption
- Property tax exemption – for 20 years, solar energy systems are not taxed.
