Massachusetts

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 saving you hundreds of dollars.

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 operate for at least five years, and primarily used for residential purposes (at least 80% residential use). If you can’t use the full credit amount in one year, you can carry over any remaining credit for up to three additional tax years. Remember that structural elements serving dual purposes (like roofs or windows) don’t qualify, but dedicated solar collectors, storage tanks, and wind generators are eligible expenses.

Massachusetts offers a Property Tax Exemption for solar energy 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, your property taxes would increase after installing solar panels because they add value to your home. This incentive effectively removes that additional tax burden, helping you save money while going solar.

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 are possible through written agreements with your municipality. This exemption does not apply to community solar projects under Section 1A of Chapter 164 or systems owned by utility companies. To benefit from this incentive, you should apply through your local tax assessor’s office before installing your system.

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 exemption applies to all components needed for your solar installation, including panels, inverters, mounting hardware, and other essential equipment. For the average homeowner installing a solar system, this can translate to savings of $1,000-$1,500 on a typical residential installation.

To qualify for this exemption, you must be purchasing solar equipment for residential or commercial use in Massachusetts. There is no application process required – the exemption is automatically applied at the point of sale when you purchase from a registered vendor. This incentive has no expiration date and is part of Massachusetts’ ongoing commitment to renewable energy. When working with your solar installer, verify that they’re aware of this exemption to ensure it’s properly applied to your purchase.

The ConnectedSolutions Battery Incentive program in Massachusetts rewards homeowners for allowing 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 to 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, homeowners can access 0% financing through Mass Save’s HEAT Loan program for up to $25,000 toward battery installation costs.

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 a typical rebate – instead, it provides solar system owners with fixed monthly payments directly from their utility company (Eversource, National Grid, or Unitil) for 10 years. These payments are in addition to the savings you’ll see on your electric bill from generating your own solar power.

The SMART Program uses a declining block structure, meaning the incentive rates decrease as more solar capacity is installed. Payment rates vary based on your system size, location, utility company, and whether you qualify for any adders. Adders provide additional incentives for systems that include energy storage (batteries), are built on brownfields, serve low-income households, or incorporate agricultural uses. Currently, some blocks may offer $0.00 incentive rates due to higher electricity prices and the program’s declining structure.

To qualify for SMART, your solar system must be connected to one of the three investor-owned utilities in Massachusetts. The application process is handled through CLEAResult, the program administrator, who reviews applications and recommends approval to the Department of Energy Resources (DOER). Homeowners should be aware that the program has a total capacity of 3,200 MW across all blocks, and incentive rates continue to decline as blocks fill up.

If you’re considering solar for your home in Massachusetts, it’s worth exploring whether you qualify for any of the special adders that can increase your incentive rate. For example, adding battery storage or qualifying as a low-income household can significantly boost your payments. Since incentive rates decrease over time as more capacity is installed, acting sooner rather than later typically results in better financial returns.

Net Metering in Massachusetts allows homeowners with solar panels to receive credit for excess electricity they send back to the grid. When your solar system produces more electricity than your home uses, that surplus energy flows back to the utility grid, and your utility company credits your account at a 1:1 ratio. This means you receive the full retail value for every kilowatt-hour your system exports, effectively letting your electric meter run backward when you’re producing excess power.

The financial benefit is substantial for Massachusetts homeowners. With major utilities like 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 that reset credits annually, Massachusetts allows these credits to accumulate indefinitely, providing long-term value. However, it’s important to note that utilities will not issue cash payouts for accumulated credits, so sizing your system appropriately for your consumption is recommended.

For customers of Taunton Municipal Light Department, the program works slightly differently. While they still offer monthly net metering, excess production above what you consume in a given month 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. Taunton also operates on a monthly settlement basis rather than allowing indefinite carryover of credits.

There are no specific deadlines to enroll in net metering, as it’s an ongoing program available to all Massachusetts solar customers. However, utility policies can change, so installing solar sooner rather than later ensures you’ll benefit from current favorable terms. To participate, you’ll need to complete an interconnection agreement with your utility when installing your solar system, which your installer typically handles as part of the installation process.