Massachusetts

The Massachusetts Residential Renewable Energy Tax Credit is a state tax incentive that helps homeowners reduce their personal income tax when they install solar panels, wind turbines, or other qualifying renewable energy systems. This credit applies to your primary residence in Massachusetts and covers systems used for heating, cooling, hot water, or electricity generation.

You can claim a tax credit equal to 15% of your net expenditure for renewable energy equipment, up to a maximum of $1,000 per residence. The net expenditure includes the purchase price and installation costs, minus any federal tax credits and government rebates you receive. If your credit exceeds your tax liability in a given year, you can carry the unused portion forward for up to three additional years.

To qualify, you must be a Massachusetts resident who owns or rents the property as your principal residence and 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 meet state quality standards. Joint property owners can share the credit proportionally based on their ownership interest, and the equipment must be used at least 80% for residential purposes to qualify for the full credit amount.

Massachusetts offers a property tax exemption that removes the added value of your solar system from your property tax assessment. This means you won’t pay additional property taxes on the increased home value that comes from installing solar panels, wind systems, or energy storage systems. The exemption applies to both owned and leased renewable energy systems.

To qualify, your 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. Systems developed under certain utility programs and those owned by electric companies are not eligible for this exemption.

The Solar Equipment Sales Tax Exemption in Massachusetts eliminates the state’s 6.25% sales tax on solar energy equipment purchases. This means homeowners can save hundreds or even thousands of dollars when buying solar panels, inverters, batteries, and other solar system components, as they won’t pay the standard sales tax that applies to most retail purchases in the state.

This exemption is available to all Massachusetts residents purchasing qualifying solar equipment, with no income limits or application process required. The savings are automatic at the point of sale when you buy eligible solar equipment from any vendor in Massachusetts. There are no deadlines or expiration dates for this incentive – it remains in effect as long as the current state law is in place. Homeowners should note that this exemption applies specifically to the equipment itself, and they should verify with their solar installer that all system components qualify for the tax exemption to maximize their savings.

The ConnectedSolutions Battery Incentive is a Massachusetts state program that pays homeowners for allowing their battery storage systems to help reduce strain on the electric 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 earn 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’s grid support to the Mass Save sponsors, though this doesn’t affect your payment incentives.

The SMART (Solar Massachusetts Renewable Target) Program is Massachusetts’ main solar incentive program that pays solar system owners a fixed rate for every kilowatt-hour of electricity their system produces. This tariff-based incentive is paid directly by your utility company (Eversource, National Grid, or Unitil) for 20 years, providing predictable long-term income from your solar investment.

The program operates on a declining block structure with 3,200 MW of total capacity, meaning incentive rates decrease as more solar is installed in each utility territory. Base compensation rates vary by block and location, but some recent blocks are showing $0.00 rates due to higher electricity prices and the program’s declining structure. Additional payment adders are available for qualifying projects, including energy storage systems, agricultural installations, brownfield sites, and low-income properties. The program also offers behind-the-meter systems a Value of Energy component that varies based on your utility rate class and project size.

To be eligible, your solar system must be interconnected with one of the three participating utilities and receive approval from both the Solar Program Administrator (CLEAResult) and the Massachusetts Department of Energy Resources (DOER). Projects are categorized based on land use and installation type, with specific siting rules that may limit the number of projects allowed on a single property. There are no specific application deadlines, but capacity blocks fill on a first-come, first-served basis, so earlier applications typically receive 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 electric grid. When your solar system produces more power than your home uses, that extra energy flows to the grid and you receive credits on your electric bill at the same rate you pay for electricity (1:1 credit). This means every kilowatt-hour (kWh) of solar energy you export earns you the same credit as what you would pay to buy that same amount of electricity from your utility company.

The financial benefits vary slightly depending on your utility company. For customers of National Grid, Eversource, and Unitil, excess credits carry over from month to month indefinitely as dollar values with no annual expiration or cash payout. This means you can build up credits during sunny summer months to offset higher usage in winter. However, if you’re served by Taunton Municipal Light Department, the program works differently – excess production each month is only credited at a lower generation rate (approximately 6.5-9.5 cents per kWh) rather than the full retail rate, and credits are settled monthly rather than carried forward.

Net metering is generally available to residential customers who install qualifying solar energy systems, though specific eligibility requirements and system size limits may vary by utility company. There are no specific deadlines mentioned for this ongoing program, but it’s important to understand that net metering policies can change over time. Homeowners should also note that while this program provides valuable bill credits, it typically doesn’t result in cash payments – the credits are designed to offset your electric bills rather than generate income.