Boston, MA

The Massachusetts Residential Renewable Energy Tax Credit offers homeowners a valuable financial incentive when they install qualifying solar or wind energy systems in their primary residence. This state tax credit allows you to claim 15% of your net expenditure (after federal credits and rebates) on renewable energy equipment, up to a maximum of $1,000. This credit directly reduces your Massachusetts personal income tax liability, potentially putting money back in your pocket while you enjoy the benefits of clean energy.

To qualify, you must be a Massachusetts resident who owns or rents your primary home and is not claimed as a dependent on another person’s tax return. The renewable energy system must be new, expected to last at least five years, and primarily used for residential purposes (at least 80% residential use). If you can’t use the full credit in one year, you can carry over any remaining amount for up to three additional tax years. Remember that only certain equipment qualifies—specifically components that directly capture or use renewable energy, not supplemental systems like conventional heating backups or structural elements that serve dual purposes.

Massachusetts offers a Property Tax Exemption for residential solar systems that provides significant financial benefits to homeowners. This state tax exemption allows you to avoid paying property taxes on your solar installation for at least 20 years. Without this exemption, the added value of your solar system to your property could increase your annual property tax bill.

To qualify for this exemption, your solar system must meet one of these requirements: 1) produce no more than 125% of your property’s annual electricity needs, 2) have a capacity of 25 kilowatts or less (verified by state documentation), or 3) have a payment in lieu of taxes agreement with your municipality. The exemption automatically lasts for 20 years, though longer periods can be arranged through written agreements with your municipality. This exemption doesn’t apply to certain utility-owned systems or those developed under specific utility programs.

The Massachusetts Solar Equipment Sales Tax Exemption is a valuable state incentive that eliminates the 6.25% state sales tax on solar energy equipment purchases. This means when you buy solar panels, inverters, mounting hardware, and other solar system components for your home, you won’t pay any sales tax on these purchases, potentially saving hundreds or thousands of dollars depending on your system size.

To qualify for this exemption, you must be purchasing solar equipment for residential use in Massachusetts. The exemption applies automatically at the time of purchase—there are no applications to submit or rebates to claim later. This is a permanent incentive with no expiration date, making it available to all current and future solar customers in Massachusetts. When combined with other incentives like the federal tax credit and SMART program, this sales tax exemption helps make solar more affordable for Massachusetts homeowners.

The ConnectedSolutions Battery Incentive program in Massachusetts rewards homeowners who allow their battery storage systems to support the electrical grid during peak demand periods. Through this state program, administered by Mass Save, participants receive $275 per kilowatt (kW) for their battery’s average contribution during summer peak events. For a typical 5-kW battery system, this could mean earning up to $1,375 annually while helping reduce strain on the grid.

To qualify, you must be a customer of Cape Light Compact, Eversource, or National Grid with a battery system using an eligible inverter from manufacturers like Tesla, Enphase, SolarEdge, and others. Your battery can be installed with new solar panels, added to an existing solar system, or set up as a standalone system. The program runs events between June 1 and September 30, occurring no more than 60 times per summer between 3:00 p.m. and 8:00 p.m., with each event lasting up to three hours. Additionally, Mass Save offers 0% financing through HEAT Loans of up to $25,000 for battery installations, making this clean energy upgrade more affordable.

The Solar Massachusetts Renewable Target (SMART) Program is a state-run incentive program designed to encourage solar development across Massachusetts. This program works differently than traditional rebates – instead, it provides guaranteed monthly payments directly from your utility company to you as the solar system owner. These payments continue for 10 years for residential systems (up to 25 kW) and 20 years for larger systems.

The SMART Program uses a declining block structure, meaning the incentive rate decreases as more solar capacity is installed in your utility’s territory. Current payment rates vary by utility (Eversource, National Grid, or Unitil), system size, and installation type, with additional incentives available for systems that include battery storage, serve low-income households, or are built on brownfields. While exact rates change by block, residential systems typically receive between $0.14-$0.30 per kilowatt-hour produced, depending on your location and when you apply.

To qualify, your solar system must be connected to one of the three investor-owned utilities in Massachusetts. The program has a total capacity of 3,200 MW across all utilities, and applications are processed on a first-come, first-served basis until each block is filled. It’s important to note that as electricity rates have increased and incentive rates have declined, some newer applications may receive reduced incentive rates or even $0.00 in certain blocks.

If you’re considering solar for your home, it’s recommended to apply for the SMART Program as early as possible to secure a higher incentive rate in an earlier block. Your solar installer can help determine your estimated incentive amount and handle the application process through the program administrator, CLEAResult. The SMART Program can be combined with federal tax incentives, making solar more affordable for Massachusetts homeowners.

Net Metering in Massachusetts allows solar homeowners to receive full credit for the excess electricity their systems generate and send back to the grid. When your solar panels produce more electricity than your home uses, your utility meter runs backward, effectively banking this energy as credits on your account. Massachusetts offers a 1:1 net metering rate, meaning you receive credit at the same retail rate you would pay for electricity from the grid.

For customers of National Grid, Eversource, and Unitil, excess credits are carried over from month to month as a dollar value with no expiration date. Unlike some states, Massachusetts does not have an annual true-up period, and these credits can be carried forward indefinitely. However, it’s important to note that utilities will not issue cash payments for accumulated credits, so sizing your system appropriately for your consumption is recommended.

Customers of Taunton Municipal Light Department have a slightly different arrangement with monthly settlement. While consumption is still offset on a 1:1 basis within each month, any excess production is credited only at the Generation Rate plus Power Cost Adjustment (approximately 6.5-9.5 cents/kWh), which is lower than the full retail rate.

There are no specific deadlines to enroll in net metering, as it’s an ongoing program available to all Massachusetts solar customers. However, the program is subject to capacity limits, so checking with your utility about current availability is advisable. To qualify, you simply need to have a grid-connected solar system installed by a licensed contractor and complete your utility’s interconnection agreement.