Quincy, 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 provides 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 where the system is installed, and it must be your principal 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 operate for at least five years, and used primarily for residential purposes. Qualifying systems include solar panels for electricity, solar water heaters, solar heating and cooling systems, and wind turbines for residential use. However, supplemental heating or cooling systems that use fossil fuels, as well as structural components like windows, walls, and roofs, do not qualify for the credit.

The $1,000 maximum applies to all renewable energy improvements you make to a single principal residence over time, not per year. If your credit exceeds your tax liability in a given year, you can carry forward the unused portion for up to three additional years. Joint owners can share the credit proportionally based on their ownership interest, and condo or co-op owners may claim a proportionate share of association expenditures. This credit can be combined with other incentives to help reduce the overall cost of going solar.

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 your solar investment for 20 years, and in some cases, municipalities may agree to extend this period beyond 20 years.

To qualify for this exemption, your solar system must meet one of three criteria: it produces no more than 125% of your property’s annual electricity needs, it’s 25 kilowatts or smaller in capacity (verified by Department of Energy Resources documentation or utility permission to operate), 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 your property can include multiple parcels within the same town if you own them all.

Keep in mind that this exemption doesn’t apply to large commercial solar farms or systems owned by utility companies. If you receive this solar property tax exemption, you cannot claim other property tax exemptions on the same property (with a few specific exceptions). The exemption is determined annually as of July 1st each year, so you’ll want to ensure your system documentation is in order before that date.

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 sale—you simply don’t pay 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. There’s no cap on the exemption amount, so the savings scale with your system size. The exemption is available to all Massachusetts homeowners and has no income requirements or application process. Your solar installer will apply the exemption directly when processing your purchase, so you’ll see the reduced price on your invoice. This incentive works alongside other Massachusetts solar programs to make clean energy more affordable for your home.

The ConnectedSolutions Battery Incentive is a Massachusetts state program that pays homeowners for allowing their battery storage system to help reduce strain on the electric grid during peak demand periods. When you enroll, your utility company (Cape Light Compact, Eversource, or National Grid) will automatically draw power from your battery during summer events—typically on hot afternoons when electricity demand is highest. These events happen no more than 60 times per summer (June 1 – September 30), only on non-holidays, between 3:00 p.m. and 8:00 p.m., and last a maximum of 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. The battery can be installed alongside a new solar panel system, added to your existing solar setup, or installed as a stand-alone system. Your battery must use a qualifying inverter from manufacturers like Tesla, Enphase, SolarEdge, Generac PWRCell, or others listed in the program, and the inverter size must be less than 50 kW. Mass Save also offers 0% financing (HEAT Loans) up to $25,000 to help make battery storage more affordable. When you participate, the environmental credits (Clean Peak Energy Credits) generated by your battery are assigned 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 are calculated using a Value of Energy formula for behind-the-meter systems. Additional compensation is available for systems that include battery storage, are installed on agricultural land, brownfield sites, or serve low-income households. Some recent blocks have reached $0.00 incentive rates due to higher electricity prices and the program’s declining structure, so it’s important to check current availability in your utility territory before proceeding.

To qualify, 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 submissions before DOER approval. Systems are categorized based on land use and installation type, with specific siting rules that determine eligibility. Homeowners should be aware that incentive rates are locked in when you receive your Statement of Qualification, and payment start dates vary by utility company. You can use DOER’s Value of Energy calculator to estimate potential compensation for your specific situation before applying.

Net metering in Massachusetts allows you to receive credit for the excess solar energy your system sends to the grid. When your solar panels produce more electricity than your home uses, that surplus power flows back to the utility grid, and you receive credits on your electric bill. These credits offset the cost of electricity you draw from the grid when your panels aren’t producing enough power, like at night or on cloudy days.

The financial benefit varies by utility company. If you’re a customer of National Grid, Eversource, or Unitil, you’ll receive 1:1 net metering credits, meaning every kilowatt-hour (kWh) you send to the grid earns you a credit equal to the full retail rate you pay for electricity. These credits carry over month to month indefinitely as a dollar value, with no annual expiration or cash payout. If you’re served by Taunton Municipal Light Department, your system operates on monthly net metering—excess production each month is credited at a lower rate (approximately 6.5-9.5 cents per kWh), which covers only the generation and power cost adjustment portions of your bill, not the full retail rate.

Net metering is available to residential solar customers across Massachusetts, though specific program details depend on your utility provider. There are no application deadlines, but utility companies may have capacity limits for net metering enrollment. It’s important to understand which utility serves your home, as this determines whether you’ll receive full retail rate credits or a reduced generation rate for your excess solar production.