Springfield, 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 equals 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 rebates or grants 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.

The $1,000 lifetime maximum applies per principal residence, meaning once you’ve claimed up to $1,000 in credits for a specific home, you cannot claim additional credits for that property. If your credit exceeds your tax liability in a given year, you can carry the unused portion forward for up to three years. Joint owners can share the credit proportionally based on their ownership interest or expenditure share, and condo or co-op owners may claim their proportionate share of association expenditures. This credit has no expiration date and remains available for qualifying installations.

Massachusetts offers a property tax exemption for homeowners who install solar energy systems on their property. This exemption means that the added value of your solar installation won’t increase your property taxes, helping you save money while your system generates clean energy. The exemption applies to both owned and leased solar systems, as well as solar systems paired with battery storage.

To qualify, your system must meet one of these criteria: produce no more than 125% of your property’s annual electricity needs, be 25 kilowatts or less in capacity (verified by state documentation), or have a payment-in-lieu-of-taxes agreement with your municipality. The exemption lasts for 20 years from installation, though you may negotiate a longer period with your local government. This benefit is available for residential solar systems and does not apply to utility-scale solar projects. The exemption is determined annually as of July 1st each year, and you cannot combine this exemption with certain other property tax exemptions on the same property.

The Massachusetts Solar Equipment Sales Tax Exemption eliminates the state’s 6.25% sales tax on solar energy equipment purchases. This means when you buy solar panels, inverters, batteries, and other solar system components in Massachusetts, you won’t pay the standard sales tax that applies to most retail purchases. For a typical residential solar installation costing $25,000, this exemption saves you approximately $1,560 upfront.

This exemption applies automatically at the point of sale for solar energy systems and equipment purchased in Massachusetts. There are no applications to submit or certificates to obtain—your solar installer simply won’t charge you sales tax on eligible equipment. The exemption covers solar panels, mounting hardware, inverters, battery storage systems, and related components that are part of your solar energy system. However, you should verify with your installer that all equipment qualifies, as some items like general electrical supplies or non-solar-specific materials may not be exempt.

There are no income limits, system size restrictions, or expiration dates for this exemption—it remains available as long as the state law is in effect. This benefit works alongside other Massachusetts solar incentives and can be combined with programs like net metering and the state’s SMART program to maximize your overall savings. Keep your purchase receipts and invoices that show the sales tax exemption was applied, as you may need this documentation for your records or future reference.

The ConnectedSolutions Battery Incentive is a Massachusetts state program that pays homeowners for allowing their battery storage system to help reduce strain on the electrical 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 occur between June 1 and September 30, from 3:00 p.m. to 8:00 p.m., with a maximum of 60 events per summer, each 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 annually. Your battery can be installed alongside a new solar panel system, added to an existing solar setup, or installed as a standalone system. The program accepts batteries from major manufacturers including Tesla, Enphase, Generac PWRCell, SolarEdge, and others, as long as the inverter size is less than 50 kW. Massachusetts residents can also access 0% financing HEAT Loans up to $25,000 to help cover battery installation costs. By participating, you’ll earn ongoing annual incentives while supporting grid stability and helping Massachusetts meet its clean energy goals.

The Solar Massachusetts Renewable Target (SMART) Program is Massachusetts’ primary state incentive for solar energy systems. This program provides a fixed monthly payment directly from your utility company (Eversource, National Grid, or Unitil) for the electricity your solar panels produce. The payment rate depends on when you apply, your system size, location, and installation type, as the program uses a declining block structure where rates decrease as more solar capacity is added statewide. The program administrator, CLEAResult, reviews all applications and works with the state Department of Energy Resources to approve qualified systems.

Payment rates vary significantly based on multiple factors, and some recent applications may receive $0.00 due to higher electricity rates combined with the declining incentive structure. Homeowners should work with their installer to calculate their specific rate using the state’s Value of Energy calculator. The program is designed for systems up to 5 megawatts that connect to one of the three participating utilities. Additional payment bonuses (called “adders”) are available for systems that include battery storage, serve low-income properties, or meet other special criteria. Payments continue for 10 years for residential systems and 20 years for larger installations.

Important considerations include strict land use and siting requirements that affect your eligibility and payment rate. Your property’s zoning and how your system is installed (rooftop versus ground-mounted) will determine your project category. The program has a total capacity limit of 3,200 megawatts across the state, and available capacity varies by utility territory. You can check current availability on the SMART Program website. There are no application deadlines, but applying earlier typically means higher payment rates due to the declining block structure.

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 surplus 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 rate you pay when you draw power from the grid.

How net metering works depends on your utility provider. If you’re a customer of National Grid, Eversource, or Unitil, any excess credits carry over month to month indefinitely as a dollar value on your bill. There’s no annual reset, and these utilities don’t pay out unused credits as cash. For Taunton Municipal Light Department customers, the process works differently: each month, your exported energy offsets your consumption on a 1:1 basis, but any monthly surplus is only credited at a lower generation rate (typically 6.5-9.5 cents per kWh) rather than the full retail rate.

Net metering is available to residential solar customers across Massachusetts, though the specific terms vary by utility. There are no application deadlines, but it’s worth noting that net metering policies can change over time as programs reach capacity caps. The key consideration for homeowners is understanding how your specific utility handles excess credits, as this affects the long-term value of your solar investment.