Solar Guide

The Massachusetts Residential Renewable Energy Tax Credit is a state tax credit that helps homeowners save money when they install solar panels, wind turbines, or other renewable energy systems at their primary residence. This credit allows you to reduce your Massachusetts state income tax by 15% of what you spend on qualifying renewable energy equipment and installation, up to a maximum credit of $1,000.

To qualify, you must be a Massachusetts resident who owns or rents your primary residence and is not claimed as a dependent on someone else’s tax return. The credit applies to the net cost of your renewable energy system after subtracting any federal tax credits and government rebates you receive. Your renewable energy equipment must be new, expected to operate for at least five years, and used primarily for residential purposes like heating, cooling, hot water, or electricity generation.

If your credit amount exceeds your tax liability in a given year, you can carry the unused portion forward for up to three additional years. Joint property owners can share the credit based on their ownership percentage, but the $1,000 maximum still applies per residence. Keep in mind that structural components like roofs, windows, and walls don’t qualify, even if they help with energy collection – only dedicated renewable energy equipment and installation costs are eligible.

Massachusetts offers a property tax exemption for homeowners who install solar energy systems on their property. This state-level incentive exempts the added value of your solar installation from your annual property tax assessment, meaning you won’t pay additional property taxes on the increased home value that comes from adding solar panels.

The exemption applies to solar systems that meet specific size requirements: systems that produce no more than 125% of your property’s annual electricity needs, or systems with 25 kilowatts or less in capacity (verified by state documentation). The tax exemption lasts for 20 years from installation, though municipalities can agree to extend this period. To qualify, your system must be owned or leased and located on residential property within Massachusetts. The exemption also covers wind-powered systems and energy storage systems that are paired with solar or wind installations.

The Solar Equipment Sales Tax Exemption in Massachusetts eliminates the state’s 6.25% sales tax on solar energy equipment purchases. This means homeowners don’t pay sales tax when buying solar panels, inverters, batteries, and other qualifying solar equipment for their home solar installation.

The financial benefit equals 6.25% of the total equipment cost. For example, on a $20,000 solar system, this exemption saves homeowners $1,250 in sales tax. The exemption applies automatically at the point of sale – no special applications or paperwork are required from homeowners.

All Massachusetts residents are eligible for this exemption when purchasing qualifying solar equipment. The exemption applies to equipment used for residential solar installations, including solar panels, inverters, mounting systems, and energy storage batteries. There are no income limits, system size restrictions, or application deadlines since this is an ongoing state tax policy.

Homeowners should ensure their solar installer applies this exemption at the time of purchase. The exemption only covers the equipment itself – installation labor and services are still subject to regular sales tax. This incentive works alongside other solar incentives like the federal tax credit and net metering to reduce the overall cost of going solar.

The ConnectedSolutions Battery Incentive is a Massachusetts state program that pays homeowners for allowing their battery storage systems to help reduce strain on the electrical grid during peak demand periods. When you enroll your home battery system, the utility company can automatically draw power from your battery during high-demand summer days, typically between 3:00 p.m. and 8:00 p.m. from June through September.

Participants earn $275 per kilowatt (kW) based on their battery’s average contribution during these events. For example, a typical 5-kW battery system could generate up to $1,375 per year. The utility will signal your system no more than 60 times per summer, with each event lasting a maximum of three hours on non-holiday weekdays.

To be eligible, you must be a customer of Cape Light Compact, Eversource, or National Grid, and have a qualifying battery system with an inverter smaller than 50kW from approved manufacturers like Tesla, Enphase, SolarEdge, Generac, and others. Your battery can be installed with new solar panels, added to an existing solar system, or installed as a standalone system. The program also offers 0% financing through HEAT Loans for up to $25,000 toward battery purchases. Keep in mind that by participating, you’re assigning the environmental credits from your battery usage to the utility sponsors, though this doesn’t affect your cash incentives.

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 provides a fixed rate per kilowatt-hour of solar energy generated for 10 years.

The program offers declining incentive rates across different capacity blocks, with earlier participants receiving higher rates. However, due to rising electricity costs and the program’s declining structure, some new applications may receive incentive rates as low as $0.00. The exact payment rate depends on your utility territory, system size, installation type, and which capacity block your project falls into. Additional payment adders are available for qualifying projects, including energy storage systems, agricultural installations, brownfield sites, and low-income properties.

To be eligible, your solar system must be interconnected with one of the three participating utilities in Massachusetts and receive approval from both the Solar Program Administrator (CLEAResult) and the Department of Energy Resources (DOER). The program has a total capacity limit of 3,200 MW statewide, and applications are processed on a first-come, first-served basis within each utility’s service territory. Homeowners should work with their solar installer to check current block availability and rates, as the program may reach capacity limits or offer minimal financial benefits in some areas.

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 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.