The complete list of Massachusetts solar incentives and tax credits for 2023, plus how to take advantage.
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Massachusetts might not seem like an obvious place to install solar, but even here the average household can meet most of its energy needs with just a 10 kW array on the roof.
And that 10 kW array can net homeowners both the federal solar tax credit and a state income tax credit. Factor in net metering, rebates from utilities, and sales and property tax exemptions, and you’ve got a great recipe for a reduced solar payback period in Massachusetts!
Massachusetts Solar Incentives
| Incentive | Description |
|---|---|
| State solar tax credit | A 15% tax credit, up to $1,000 |
| State solar rebates | The SMART program offers incentives for home solar, up to $1.20 per watt, or 50% of system costs in some places. Rates and availability vary depending on location |
| State sales tax exemption | Save the 6.25% state sales tax on solar installations |
| State property tax exemptions | An exemption from any additional property taxes due to installing solar, valid for a 20-year period |
| Solar storage incentives | The SMART program offers additional incentives for installing battery storage with a solar PV system |
| Net metering | Mandated by law, with credits rolling over indefinitely |
Solar rebates in Massachusetts
The Massachusetts Department of Energy Resources (DOER) launched its SMART program to incentivize solar installations in the state. The Solar Massachusetts Renewable Target (SMART) program is a tariff-based incentive paid directly by the utility company to homeowners.
This program is a declining incentive program, meaning the more people sign up, the lower the incentive. Currently, eligible projects must be connected to the grid via one of the three investor-owned utilities in the state: Eversource, National Grid, and Unitil. The availability of rebates varies between each utility based on how many customers have signed up and the amount of solar capacity in their grid.
The Massachusetts Municipal Electric Cooperative (MMWEC) and Energy New England (ENE) also offer a rebate program. This program is intended to incentivize the installation of solar photovoltaic systems in certain Municipal Light Plant (MLP) service territories. Rebates amount to $1.20 per watt, up to 50% of system costs, on installations of 25 kW DC or less.
The utility CMLP also offers a Solar PV Rebate of $625 per kW(DC) of installed solar PV generation capacity. The maximum rebate is capped at $3,125 per service address. This rebate is in addition to CMLP’s net metering program.
Solar storage incentives in Massachusetts
Homeowners signed up to the SMART program can add battery storage to their energy system to earn greater incentives.
Customers served by the National Grid can also take part in its Connected Solutions battery program and receive an incentive every summer based on the performance of their battery system. (Connected Solutions also offers eligible customers in Massachusetts a zero-interest HEAT Loan for the equipment and labor costs associated with installing a battery storage system.)
State solar tax credit in Massachusetts
Massachusetts is one of the few states to offer its own solar tax credit. The Massachusetts Residential Renewable Energy Income Tax Credit gives a 15% tax credit, up to $1,000, to homeowners who install solar or other renewable energy systems. This credit counts against state income tax and can be carried over for up to three years.
To get the credit, you’ll need to complete and file Massachusetts Schedule EC, Solar and Wind Energy Credit, with your annual income tax return.
State tax credits, rebates, and other incentives are usually deducted from the cost of solar installation prior to calculating the federal tax credit. It’s always best to talk to a qualified tax accountant when installing solar, though, to ensure you’re following the law and making the most of any available incentives.
State sales tax exemptions in Massachusetts
Residents of Massachusetts who install solar energy systems are exempt from sales tax on those systems. This amounts to a 6.25% discount on solar in Massachusetts right off the bat!
Specifically, sales of “equipment directly relating to any solar, windpowered; or heat pump system, which is being utilized as a primary or auxiliary power system for the purpose of heating or otherwise supplying the energy needs of an individual’s principal residence in the commonwealth,” is exempt from the state’s sales tax.
State property tax exemptions in Massachusetts
Homeowners who install solar in Massachusetts are also eligible for an exemption from any additional property taxes associated with value added by the energy system. The exemption is valid for a 20-year period.
Be aware, though, that the exemption isn’t applicable to items that serve a dual purpose (such as structural and energy production purposes). This may mean that solar shingles or solar roof installations do not qualify for the exemption. Talk to your solar installer and local property assessment office if this applies to you, before you sign a contract.
Net metering in Massachusetts
Net metering is mandated by law in Massachusetts, meaning utilities have to provide residential solar customers with credits for excess energy produced.
Most net metering programs offered by utilities in Massachusetts don’t allow for payments if a customer builds up a large credit balance for exported energy. However, net metering customers with Eversource may be able to request a one-time credit balance from one account to another customer’s account in the same load zone. Otherwise, all credits just keep rolling over from one billing period to the next.
Homeowners in Boston should also note that Eversource may not approve solar PV interconnections in certain areas of the city and surrounding areas. If this applies to you, check the utility’s Important Notice to Eversource Customers located in the Boston Area Network and Surrounding Regions.
Massachusetts also offers the SMART program (see above) where residents installing solar receive a tariff-based incentive paid directly by the utility company to the system owner.
One often overlooked aspect of the SMART program is the option for Alternative On-bill Credits. Under this system, eligible SMART projects that are connected to the grid but not directly connected to a residence or customer who uses the energy generated, may receive energy compensation through Alternative On-bill Credits. These credits can then be assigned to offset the cost of electricity on another customer’s account. This is basically a way of accessing net metering even if you have to site your solar array somewhere away from your main residence. So, if you happen to own a field that gets lots of sun but isn’t in your backyard, you may still be able to install solar and enjoy the benefits of bill credits.
Final thoughts on state solar incentives in Massachusetts
Electricity is expensive in Massachusetts, and solar incentives are abundant in the state. For the average homeowner who sizes their array to meet most of their energy needs, going solar could save a cool $26,000 on energy costs over 10 years.
Factor in the federal solar tax credit, Massachusetts’ additional 15% personal income tax credit for solar, the SMART program rebates, net metering, and both sales and property tax exemptions and the Bay State is looking pretty great for home solar!