As a national leader in renewable energy, Massachusetts solar incentives have always been among the best in the United States.
Despite being the 7th smallest state in total land area, Massachusetts is consistently a top-ten region for solar power generation, year after year. This is largely thanks to its rich history of utility solar programs, net metering support, tax exemptions, and local rebates.
With incentives dating back to the 1970s, however, it can be difficult to navigate the state’s ever-changing landscape of current solar rebates, credits, and programs. So if you’re a Bay Stater going solar to combat high local electricity rates, Palmetto is here to help.
In this article, we’ll take a detailed look at a heaping handful of Massachusetts solar incentives to help you understand what is currently available in 2023.
Solar Rebates, Tax Credits, and Incentives in Massachusetts
To maximize the value of your solar energy investment, homeowners should aim to take advantage of as many financial incentives as possible. In 2023, MA residents may be able to qualify for federal and state tax incentives as well as a few local programs designed specifically to incentivize residential renewable energy production and storage.
Note: Your eligibility can depend on your location, electric utility provider, income level, interest in battery storage, and more. This is not tax advice, and you should always consult a tax professional.
1. Residential Renewable Energy Credits
If you’re installing a photovoltaic (PV) solar energy system in Massachusetts, then you may be eligible for two separate tax credits, at the federal and state level.
Locally, MA homeowners can earn a state income tax credit totaling 15% of the net system costs of a solar energy installation, up to $1,000. Officially known as the Massachusetts Residential Renewable Energy Income Tax Credit, this incentive can be claimed for up to three years against a MA property owner’s state income tax liability.
Federally, Massachusetts residents may also qualify for the Residential Clean Energy Credit to claim up to 30% of the total installation costs against their federal income tax liability. Recently extended by the Inflation Reduction Act of 2022, the Residential Clean Energy Credit, formerly known as the solar Investment Tax Credit (ITC), is a federal solar tax credit that has helped drive significant growth in solar power capacity across the United States since 2006.
2. Massachusetts Net Energy Metering
Net energy metering, or simply “net metering” is a longstanding Massachusetts solar incentive that allows homeowners to sell the excess electricity produced by their solar panel system directly to the utility in the form of an electricity bill credit.
In Massachusetts, all three major investor-owned utilities (National Grid, Eversource, and Until) offer 1-to-1 net metering. This means that home solar producers are compensated for their power at the same retail rates for which it is purchased, so that any grid energy used at night (or in cloudy conditions) can be offset by excess solar generation during the day.
Recently increased by new climate-friendly legislation, residential solar systems up to 25 kilowatts are eligible for net metering in Massachusetts, doubling the previous capacity limit. However, it is important to know that net metering credits in Massachusetts roll over indefinitely from month to month, and solar producers are always compensated in the form of utility bill credits, rather than cold hard cash.
Of course, if you live in Massachusetts, there is a small chance that National Grid, Eversouce, or Until does not supply your electricity. Net metering policies vary among the many small municipally-owned electric companies in MA, and we recommend researching or reaching out directly to your local utility to learn more.
3. Massachusetts SREC Program (Closed to New Participants)
On top of net metering credits, Massachusetts solar producers can also earn Solar Renewable Energy Credits (SRECs or simply RECs) for the power they generate and send to the utility grid. These credits can then be sold on the open market, at variable rates affected by supply, demand, and several other local factors.
As the first state to ever set up a program of its kind, Massachusetts pioneered its original SREC program in 2010 as part of its Renewable Portfolio Standard (RPS). The program has been modified several times, and is now closed to new participants.
Originally, solar energy systems installed before April 2014 were eligible for the SREC-I program. In its second form, MA solar panels interconnected between April 2014 and November 2018 could qualify for the MA SREC-II program. The SREC-II program was then replaced by the Massachusetts SMART program, which we will detail below.
If you own a solar energy system in MA that generates renewable energy credits, Palmetto and SRECTrade can help you earn a flat compensation rate for up to 10 years of power production. Learn more about how to sell your Solar Renewable Energy Credits with Palmetto.
4. Massachusetts SMART Program (Closed to New Participants)
Launched in 2018 to replace the SREC-II program, the Solar Massachusetts Renewable Target (SMART) program also allows homeowners to generate separate Renewable Energy Credits (REC) for the power they produce and send to the grid.
Solar producers enrolled in the MA SMART program are compensated for their energy at various rates, based on their electricity provider and the “block” for which they were enrolled. After slowly losing value for four years, the Massachusetts SMART Program closed to new participants in the fall of 2022.
5. Massachusetts ConnectedSolutions Program
As a solar battery storage incentive, the Connected Solutions program (stylized ConnectedSolutions) has been driving energy resilience in Massachusetts since 2019.
By installing a battery backup and joining the program, both Eversource and National Grid customers can earn hundreds of dollars each year by allowing their utility to access the energy stored in their batteries during periods with peak electricity demand.
To enroll in ConnectedSolutions, battery owners must apply with their utility, and the program is slightly different for National Grid and Eversource customers. Most modern solar batteries will qualify for the program, including devices from Tesla (Powerwall), Enphase, SolarEdge, SunPower, and more.
6. State Sales and Property Tax Exemption
Like many states, Massachusetts offers both a sales and property tax exemption for solar energy systems. Essentially, this means that there will be no surprise expenses when you adopt solar in MA.
Sales tax exemption: In 2023, renewable energy equipment is completely exempt from sales and use tax in Massachusetts, which saves solar adopters an average of 6.25% on most transactions.
Property tax exemption: Although adding solar has been proven to increase the value of a home, Massachusetts homeowners do not have to worry about a PV installation raising their property taxes. Whenever the value of MA property is assessed, renewable energy equipment is completely exempt for a 20-year period.
7. Local Utility Rebates
When going solar in Massachusetts, you may qualify for a variety of solar installation rebates dependent on your home’s location and electricity utility. As small municipal utilities (also known as “munis”) supply 13% of MA’s electricity across 50 different communities, individual rebates are extremely localized and vary in value across the state.
For example, those lucky enough to live in beautiful Concord, MA can receive a one-time $650 per kW rebate (up to $3,125) for installing solar panels and connecting them to the grid. Likewise, Bristol County residents may also qualify for a $4,500 solar rebate with the Taunton Municipal Light Plant as well as a separate local incentive for battery storage.
Like with net metering policies, more information about local solar rebates from MA’s municipal utilities can be found by contacting your electricity provider directly, or visiting their website.
Go Solar in Massachusetts Today
With such a wide variety of local incentives, paired with multiple Massachusetts solar tax credits and state-wide programs, the best way to go solar in Massachusetts is with an expert by your side.
If you’re interested in going solar in Boston, down the Cape, or anywhere else across the Bay State, Palmetto can help maximize your savings by identifying all of the available Massachusetts solar incentives and designing a high-quality PV system to fit the unique demands of your property.
Whether you’re ready to go solar today or are just starting to explore your options, you can see your estimated energy savings in Massachusetts, including any available incentives, instantly with our Free Solar Savings Estimate and Design Tool.