Solar Guide

The Massachusetts Residential Renewable Energy Tax Credit is a state tax incentive that helps homeowners save money when they install solar panels, wind turbines, or other qualifying renewable energy systems at their primary residence. This credit reduces your Massachusetts state income tax bill dollar-for-dollar, making clean energy more affordable for Bay State residents.

You can claim a credit equal to 15% of your total system costs (including installation) or $1,000, whichever is less. The $1,000 maximum applies per residence and covers all renewable energy purchases you make for that home. If your credit amount exceeds what you owe in state taxes for the year, you can carry the remaining credit forward for up to three additional years.

To qualify, you must be a Massachusetts resident who owns or rents your primary residence and isn’t claimed as a dependent on someone else’s tax return. The renewable energy system must be new (not used), expected to operate for at least five years, and used primarily for residential purposes like heating, cooling, hot water, or electricity generation. Joint property owners can share the credit based on their ownership percentage, but the $1,000 limit still applies per residence.

Keep in mind that your net expenditure for the credit calculation is reduced by any federal tax credits or government rebates you receive. The system must meet state quality standards, and certain items like regular windows, roofs, or backup heating systems don’t qualify even if they’re part of your renewable energy setup.

Massachusetts offers a property tax exemption for homeowners who install solar panels, wind systems, or energy storage systems on their property. This incentive removes the added property value from your solar installation from your annual property tax bill, meaning you won’t pay higher property taxes because your home’s value increased due to your renewable energy system.

The exemption lasts for 20 years from installation and applies to systems that either produce no more than 125% of your property’s annual electricity needs, are 25 kilowatts or smaller in capacity, or have a special payment agreement with your local municipality. Your system must be verified through Massachusetts Department of Energy Resources documentation or utility company permission to operate paperwork.

To qualify, you must own or lease the renewable energy system, and it must be located on your residential property within Massachusetts. The exemption doesn’t apply to large commercial solar developments or utility-owned systems. Some municipalities may offer exemption periods longer than 20 years through special agreements, so it’s worth checking with your local tax assessor’s office about available options in your area.

The Solar Equipment Sales Tax Exemption in Massachusetts eliminates the state’s 6.25% sales tax on solar energy equipment purchases. This means when you buy solar panels, inverters, batteries, and other qualifying solar equipment for your home, you won’t pay the standard Massachusetts sales tax on these items. For a typical residential solar system costing $20,000, this exemption saves homeowners approximately $1,250.

This exemption applies automatically to all solar equipment purchases in Massachusetts – there are no income limits, application processes, or special eligibility requirements for homeowners to meet. The exemption covers all components of a solar energy system, including panels, mounting equipment, inverters, and energy storage systems. The savings are applied directly at the point of sale, so you’ll see the reduced price immediately when making your purchase. This state tax exemption can be combined with other solar incentives like the federal tax credit and any local rebates to maximize your overall savings on going solar.

The ConnectedSolutions Battery Incentive is a Massachusetts state program that pays homeowners to share stored battery power during peak electricity demand periods. When you enroll your home battery system, Mass Save utility sponsors can automatically draw energy from your battery during summer events to help balance the electrical grid. In return, you earn $275 per kilowatt (kW) based on your battery’s average contribution during these events.

For a typical 5-kW battery system, homeowners can earn up to $1,375 per year. The program runs from June 1 to September 30, with events occurring between 3:00 p.m. and 8:00 p.m. on non-holidays. Your battery will be called upon no more than 60 times per summer, with each event lasting a maximum of three hours. To participate, you must be a customer of Cape Light Compact, Eversource, or National Grid, and install an eligible battery system from approved manufacturers like Tesla, Enphase, SolarEdge, or others listed in the program. The battery can be installed with new solar panels, added to existing solar, or installed as a standalone system. Systems must have inverters smaller than 50kW, and the program also offers 0% financing up to $25,000 for battery installations.

The Solar Massachusetts Renewable Target (SMART) Program is Massachusetts’ main state incentive program that pays solar system owners monthly cash payments for the electricity their solar panels produce. This tariff-based incentive is paid directly by your utility company (Eversource, National Grid, or Unitil) and continues for the life of your solar system, providing a steady income stream on top of your electricity bill savings.

The program offers declining incentive rates across different capacity blocks, with a total program cap of 3,200 MW statewide. Your specific payment rate depends on which utility serves your area, when you apply, and what type of solar installation you have. The program includes bonus payments (called ‘adders’) for systems that include battery storage, are installed on agricultural land, brownfield sites, or serve low-income communities. However, due to rising electricity rates and the program’s declining structure, some new applications may receive incentive rates as low as $0.00, so it’s important to work with your installer to evaluate current rates before proceeding.

To be eligible, your solar system must be connected to one of the three participating utility companies in Massachusetts. The application process is managed by CLEAResult, the Solar Program Administrator, who reviews all applications and recommends approval to the state. There are specific siting rules and land use requirements that determine your project category and available incentive rates. Homeowners should note that incentive payment start dates vary by utility company, and the program operates on a first-come, first-served basis within each capacity block, making timing important for securing higher incentive rates.

Net Metering in Massachusetts allows homeowners with solar panels to receive credit for excess electricity they generate and send back to the power grid. When your solar system produces more energy than your home uses, that extra power flows to the grid and you receive credits on your electric bill. When you need more electricity than your panels produce (like at night), you can use these credits to offset the cost.

The financial benefits vary by utility company. National Grid, Eversource, and Unitil customers receive full retail rate credits (1:1 net metering), meaning each kilowatt-hour of excess solar energy earns the same credit as what you pay for electricity from the grid. These credits carry over month to month indefinitely as dollar values, with no annual expiration or cash payouts. Taunton Municipal Light Department customers receive monthly net metering, where excess production above monthly consumption is credited at a lower generation rate of approximately 6.5-9.5 cents per kWh.

Net metering is available to residential solar customers across Massachusetts, though specific terms depend on your utility provider. There are no current deadlines for enrollment, but utility companies may have capacity limits for net metering programs. Homeowners should understand that while credits don’t expire with most utilities, they also won’t receive cash payments for excess credits – the value stays as bill credits to use for future electricity needs.