Massachusetts Solar Panels

The Massachusetts Residential Renewable Energy Tax Credit is a state tax credit that rewards homeowners and tenants who install solar or wind energy systems at their primary residence. This credit equals 15% of your net expenditure for qualifying renewable energy equipment, up to a maximum of $1,000. The net expenditure includes the purchase price and installation costs, minus any grants or rebates you receive from the U.S. Department of Housing and Urban Development.

To qualify, you must be a Massachusetts resident who owns or rents the property and lives there as your primary residence. You cannot be claimed as a dependent on someone else’s tax return. The renewable energy equipment must be new (original use begins with you), expected to last at least five years, and used primarily for residential purposes—such as heating, cooling, providing hot water, or generating electricity. Qualifying solar equipment includes items like solar collectors, storage tanks, and heat exchangers, while qualifying wind equipment includes windmills and wind-driven generators. Note that structural components serving dual purposes (like windows, roofs, or walls) and energy efficiency items (like insulation or storm windows) do not qualify.

The $1,000 lifetime maximum applies per principal residence, meaning once you’ve claimed the full credit for a home, you cannot claim additional credits for that same property. If your credit exceeds your tax liability in a given year, you can carry the unused portion forward for up to three years. Joint owners can share the credit proportionally based on their ownership interest or expenditure share, and condo or co-op owners may claim their proportionate share of association expenditures. The credit is claimed in the tax year when the expenditure is both paid and the equipment is operational, whichever comes later.

Massachusetts offers a property tax exemption for homeowners who install solar energy systems on their property. This exemption means that adding solar panels to your home won’t increase your property taxes, even though the system adds value to your property. The exemption protects you from paying additional property taxes on the solar equipment for 20 years from the date of installation.

To qualify, your solar system must meet one of these conditions: it produces no more than 125% of your property’s annual electricity needs, it’s 25 kilowatts or smaller in capacity (verified by state documentation), or you’ve entered into a payment-in-lieu-of-taxes agreement with your municipality. The exemption applies to both owned and leased systems, and it can cover solar systems paired with battery storage. The 20-year exemption period can be extended if you reach a written agreement with your local municipality.

This exemption does not apply to large-scale solar developments or systems owned by utility companies. If you’re receiving this solar property tax exemption, you cannot claim certain other property tax exemptions on the same property simultaneously. Your eligibility is determined each year as of July 1st, so it’s important to have your system installed and documented before that date to receive the exemption for that tax year.

Massachusetts offers a sales tax exemption on solar energy equipment, which means you won’t pay the state’s 6.25% sales tax when purchasing solar panels and related equipment for your home. This exemption applies to solar electric systems, solar thermal systems, and the components needed to install them. The savings are automatic at the point of purchase—you simply won’t be charged sales tax on eligible solar equipment.

For a typical residential solar installation costing $25,000, this exemption saves you approximately $1,563 in sales tax. The exemption has no cap on the purchase amount, so the more your system costs, the more you save. There are no income requirements or application processes—the exemption is available to all Massachusetts homeowners who purchase qualifying solar equipment. Your solar installer will handle the exemption at the time of sale, ensuring you receive the benefit immediately. This incentive works alongside other Massachusetts solar programs to reduce your upfront costs and make clean energy more affordable.

The ConnectedSolutions Battery Incentive is a Massachusetts state program that pays homeowners for allowing their battery storage system to discharge energy during peak demand periods in the summer. When you enroll your home battery, your utility company (Cape Light Compact, Eversource, or National Grid) will automatically send signals to your system during high-demand times—typically hot summer afternoons between 3:00 p.m. and 8:00 p.m. from June through September. These events happen no more than 60 times per summer and last up to three hours each.

You’ll earn $275 per kilowatt (kW) based on your battery’s average contribution during these summer events. For example, a typical 5-kW battery system could earn up to $1,375 annually. Your battery can be installed alongside a new solar system, added to an existing solar setup, or installed as a standalone unit. The program accepts systems from major manufacturers including Tesla, Enphase, SolarEdge, Generac PWRCell, and others, as long as the inverter size is under 50 kW. Massachusetts residents can also access 0% financing through HEAT Loans for up to $25,000 to help cover battery installation costs. When you participate, the environmental credits generated by your battery go to the utility sponsors to help them meet state clean energy requirements, but this doesn’t affect your incentive payments.

The Solar Massachusetts Renewable Target (SMART) Program is a state incentive that pays solar system owners for the electricity their panels generate. This tariff-based program provides monthly payments directly from your utility company (Eversource, National Grid, or Unitil) for a fixed period, creating a predictable income stream from your solar investment. The program operates on a declining block structure with 3,200 MW of total capacity, meaning incentive rates decrease as each block fills up.

The compensation rate you receive depends on several factors: your utility company, the capacity block available when you apply, your system size, and whether your system qualifies for any bonus adders. Base rates vary by block and have been declining as the program progresses. Some recent blocks are showing $0.00 incentive rates due to higher electricity prices, so it’s important to check current availability in your utility territory. Additional compensation adders are available for systems that include energy storage, agricultural operations, installations on brownfield sites, or projects serving low-income households. Behind-the-meter systems (those connected to your home) also receive a “Value of Energy” payment based on your utility rate class.

To qualify, your solar system must be located in Massachusetts and interconnected with one of the three participating utility companies. The program administrator, CLEAResult, reviews all applications and recommends approval to the Massachusetts Department of Energy Resources (DOER). Your system must meet specific land use and siting requirements, which categorize projects based on location type and installation method. Projects seeking special adders like agricultural solar or brownfield installations require predetermination letters before applying. There are no application deadlines, but the program operates on a first-come, first-served basis until all capacity blocks are filled, making early application important to secure higher incentive rates.

Net metering in Massachusetts allows you to receive credit for the excess solar energy your system sends to the electric grid. When your solar panels produce more electricity than your home uses, that surplus power flows back to the grid, and your utility company credits your account. These credits work on a 1:1 basis for most utilities, meaning you receive the full retail rate for every kilowatt-hour you export—the same rate you pay when you buy electricity from the grid.

How your credits work depends on your utility provider. If you have National Grid, Eversource, or Unitil, any excess credits carry over month to month indefinitely as a dollar value on your bill, with no annual expiration or cash payout. This means you can build up credits during sunny summer months and use them during winter when your system produces less. If you have Taunton Municipal Light Department, your system operates on monthly net metering—each month, your exported energy offsets your consumption at the full retail rate, but any excess production beyond what you used that month is only credited at a lower generation rate (approximately 6.5-9.5 cents per kilowatt-hour) and settled monthly.

All residential solar customers in Massachusetts with systems up to 25 kilowatts are eligible for net metering. There are no application deadlines, as this is an ongoing program available to homeowners who install solar panels. Keep in mind that net metering policies can vary by utility company, so understanding your specific provider’s rules will help you maximize the value of your solar investment.