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 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 panels, wind systems, or energy storage systems on their property. This state tax benefit means you won’t pay property taxes on the added value that your renewable energy system brings to your home. The exemption applies to both owned and leased systems, helping make clean energy more affordable for Massachusetts residents.

To qualify, your solar system must meet one of three criteria: produce no more than 125% of your property’s annual electricity needs, be 25 kilowatts or smaller 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 be able to negotiate a longer period with your local government. This benefit is available for residential properties and applies to systems installed on contiguous or non-contiguous properties within the same municipality under common ownership.

Keep in mind that this exemption doesn’t apply to large commercial solar projects or utility-owned systems. The tax benefit is determined annually on July 1st, and you cannot combine this exemption with most other property tax exemptions on the same property. This incentive works alongside other solar benefits to reduce the overall cost of going solar in Massachusetts.

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 hardware, inverters, monitoring equipment, 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 works alongside other solar incentives like the federal tax credit and net metering to make solar energy more affordable for Massachusetts residents.

The ConnectedSolutions Battery Incentive is a Massachusetts state program that pays homeowners to help reduce strain on the electrical grid during peak demand periods. When you enroll your home battery system, you allow your utility company to automatically draw stored energy from your battery during high-demand summer days. In return, you earn $275 per kilowatt (kW) for 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 utility will signal your battery no more than 60 times each summer, with each event lasting a maximum of three hours between 3:00 p.m. and 8:00 p.m. on non-holidays from June 1 through September 30. To participate, you must be a customer of Cape Light Compact, Eversource, or National Grid, and your battery system must have an inverter smaller than 50kW from approved manufacturers like Tesla, Enphase, SolarEdge, or others listed in the program.

Your battery can be installed with a new solar system, added to an existing solar setup, or installed as a standalone system. The program also offers 0% financing through HEAT Loans for up to $25,000 toward battery purchases. By participating, you help Massachusetts meet its clean energy goals while earning steady annual income from your battery investment.

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 runs for 10-20 years depending on your system size. The program uses a declining block structure, meaning incentive rates decrease as more solar capacity is installed across the state.

The financial benefit varies based on several factors including your utility company, system size, location type, and when you apply. Base compensation rates are set in blocks that decline over time, and some recent blocks may offer $0.00 incentive rates due to higher electricity prices. However, eligible systems can earn additional compensation through various ‘adders’ – extra payments for energy storage, agricultural installations, brownfield sites, low-income properties, or community solar projects. Homeowners can use DOER’s Value of Energy Calculator to estimate their potential payments.

To be eligible, your solar system must be connected to one of the three participating utilities and go through an application process managed by CLEAResult, the program administrator. Systems are categorized based on land use and installation type, with specific siting rules that may affect eligibility. There are no specific application deadlines, but incentive rates continue to decline as program capacity fills up, so earlier applications typically receive higher rates. Homeowners should work with qualified installers to navigate the application process and determine if current incentive levels make participation worthwhile for their specific situation.

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 your consumption.

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. 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.

Most Massachusetts homeowners with solar installations are automatically eligible for net metering through their utility company. The program has no specific deadlines, though utility-specific caps on total net metering capacity may apply. It’s important to understand that while credits don’t expire with most utilities, they also won’t be paid out as cash – they can only be used to offset future electric bills.