Boston, MA 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 allows you to claim 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 thermostats) do not qualify.

If your credit exceeds your tax liability in a given year, you can carry the unused portion forward for up to three additional years. The $1,000 maximum applies to all renewable energy expenditures made for the same principal residence over time, so if you’ve claimed this credit before for the same home, your available credit will be reduced accordingly. Joint owners can share the credit proportionally based on their ownership interest or expenditures, and condo or co-op owners may claim a proportionate share of their association’s qualifying expenditures.

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 applies to both owned and leased solar systems, as well as solar systems paired with battery storage.

The exemption lasts for 20 years from installation, though you may be able to negotiate a longer period with your local municipality. To qualify, your system must meet one of these conditions: produce no more than 125% of your property’s annual electricity needs, be 25 kilowatts or smaller in capacity (verified by state program documentation or utility permission to operate), or have a payment-in-lieu-of-taxes agreement with your municipality. The exemption is determined each year as of July 1st, and you cannot combine this exemption with most other property tax exemptions on the same property. This benefit helps make solar more affordable by ensuring your property tax bill stays the same after installation, allowing you to enjoy the energy savings without worrying about increased local taxes.

Massachusetts offers a sales tax exemption on solar equipment purchases, allowing homeowners to avoid paying the state’s sales tax when buying solar panels and related equipment. This exemption applies to solar energy systems and their components, helping reduce the upfront cost of going solar. Since Massachusetts has a 6.25% sales tax rate, this exemption can result in significant savings on your solar investment.

The exemption is available to all Massachusetts residents who purchase qualifying solar energy equipment. There are no income requirements or application deadlines—the exemption applies automatically at the point of sale when you buy eligible solar equipment. Your solar installer should apply this exemption directly to your purchase, so you won’t need to pay the sales tax upfront or file for a refund later. Be sure to confirm with your installer that they’re applying this exemption to your solar equipment purchase to ensure you receive the full benefit.

The ConnectedSolutions Battery Incentive is a Massachusetts state program that pays homeowners for allowing their battery storage system to discharge energy during times of peak electricity demand. When you enroll your home battery, your utility company (Cape Light Compact, Eversource, or National Grid) will automatically send signals to your system during summer events—no more than 60 times between June 1 and September 30. These events occur on non-holidays between 3:00 p.m. and 8:00 p.m., with each event lasting up to three hours.

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 per year. Your battery can be installed with a new solar system, added to an existing solar system, or installed as a standalone unit. To qualify, you must be a residential customer of Cape Light Compact, Eversource, or National Grid, and your system’s inverter must be under 50 kW and from an approved manufacturer (including Tesla, Enphase, SolarEdge, Generac PWRCell, and others). The program also offers 0% financing through HEAT Loans for up to $25,000 to help make battery storage more affordable. By participating, you assign the environmental credits (Clean Peak Energy Credits) to your utility sponsor, but this doesn’t affect your incentive payments.

The Solar Massachusetts Renewable Target (SMART) Program is Massachusetts’ primary incentive program for solar energy systems. This is a tariff-based incentive where your utility company (Eversource, National Grid, or Unitil) pays you directly for the solar electricity your system produces over a 10-year period. The program uses a declining block structure, meaning incentive rates decrease as more solar capacity is installed across the state. Your specific rate depends on which utility serves your area, when you apply, your system size, and where your solar panels are located.

The base compensation rates vary by capacity block and utility territory, with rates declining as each block fills up. Homeowners should note that due to recent high electricity rates and the program’s declining structure, some newer applications may receive very low or even $0.00 incentive rates in certain blocks. You can check current available capacity and rates for your utility on the program’s application website managed by CLEAResult. Behind-the-meter residential systems may also be eligible for additional compensation through various “adders” – bonus payments for features like energy storage batteries, agricultural integration, or installation on brownfield sites.

To participate, your system must be connected to one of the three participating utility companies and approved by both the Solar Program Administrator (CLEAResult) and the Massachusetts Department of Energy Resources (DOER). The application process includes obtaining a Statement of Qualification that reserves your incentive rate. Given that incentive rates are declining and some blocks are reaching $0.00 rates, it’s important to check current availability in your utility territory before moving forward. The program has specific land use and siting requirements that determine your project category and eligibility, so working with an experienced installer familiar with SMART program requirements is essential.

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 extra 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 price you’d pay to buy that 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 as a dollar value and never expire. You’ll continue to accumulate credits during sunny months and use them during months when your system produces less, but these utilities will not pay you out in cash. If you’re served by Taunton Municipal Light Department, the program works differently—your production is netted against your consumption each month on a 1:1 basis, but any excess production beyond what you used that month is only credited at a lower generation rate (typically 6.5-9.5 cents per kWh) and settled monthly.

Net metering is available to homeowners who install solar panels and connect them to the grid through their utility company. There are no application deadlines, as this is an ongoing program required by Massachusetts law. The key consideration is understanding which utility serves your home, as this determines exactly how your credits are calculated and whether they roll over indefinitely or settle monthly at a different rate.