Completing our review of solar incentives throughout our primary service areas, this month we’re tackling solar incentives in Massachusetts. Between the Federal Investment Tax Credit (ITC), net metering, and other state programs Massachusetts has some of the best solar incentives in the country. So not only can you experience the benefits of renewable energy, but you can do it for quite a bit less.
And those solar incentives in Massachusetts have had a pretty positive impact. Currently, Massachusetts is one of the top ten states in the US for solar, sitting at number eight. However, if you live in Massachusetts and have yet to go solar, we should note that state incentives have been steadily decreasing. Fortunately, over the last few years solar system pricing nationally (as well as Massachusetts of course) has dropped 45%, meaning our customers can still cut those greenhouse gas emissions on a budget.
So here’s the rundown on what to look for when researching solar incentives in Massachusetts to make going solar that much easier:
Federal Investment Tax Credit
As in all other states, the Federal Investment Tax Credit is still the biggest and hence most important incentive. Currently it is 26% and applies to any home or business solar systems installed by December 31, 2022. This tax credit will apply to all costs involved in your system; not just installation (labor, equipment, and permitting for example), but also any design and site preparation work.
As an example, if your system costs $20,000 plus $2,000 in preparation work you wouldn’t have done otherwise, your credit will be $22,000 x 26% equaling $5,720. That’s a big chunk of change! (Note you’ll want to consult an actual tax expert to decide what is allowable preparation work and what isn’t, as we are not tax advisors.)
Net metering is more of a policy than an incentive, but we’ve gone over it for Rhode Island and New Hampshire, so it’s important to know Massachusetts has recently reaffirmed its commitment to net metering. For those who don’t quite understand it, according to our Residential Sales Manager, Roy Van Cleef “Net metering requires that the utility meter how much solar energy you are sending back to the grid as well as how much energy you are receiving from the grid and at the end of the month you are billed only on your net usage.”
Better yet, any excess energy those panels produce will be credited to your bill at the end of the month! These credits can then be applied during times when your PV system isn’t generating enough electricity, say in December or January. The credit you receive will vary depending on many factors, including system size, so make sure our Solar Consultant explains your options. To keep it short however, there are more rules in Massachusetts than in the other states so you’ll want to make sure you understand your options and limitations.
State Residential Renewable Energy Income Tax Credit
Generally unique to Massachusetts is a 15% solar tax credit. It is a nice perk, but unfortunately it maxes out at $1000. But if you look at it another way, it’s an easy way to save a grand!
Solar Massachusetts Renewable Target (SMART) Program
According to MA Smart Solar, “The SMART program is a declining block program in which the incentive levels will decline by prescribed amounts over up to eight blocks per Electric Distribution Company (EDC) territory.”
The SMART Program applies to the three publicly held electric utilities – Eversource, National Grid, and Unitil. The amount you can get depends on which utility’s territory you live in so unfortunately, if you live in a municipal light district, the SMART program will not apply to you. But that said, some of those utilities do offer their own solar incentives in Massachusetts. There’s too much variety and detail to list here, but we serve most all of those towns and can get you the latest information.
On SMART’s current value to new system installers, our Sales Manager Roy Van Cleef explained that,”unfortunately both Unitil and Ngrid are at incentive values that are very close to or below zero which means no SMART incentive for them. Eversource East is now in block 6 which puts the SMART payment at 6.6 cents per kWh of generation. There is new regulation that will be implemented shortly to extend the program to 16 blocks instead of 8, but I don’t think that will improve the incentive values for small (<25kW) systems.
Solar Installation State Property Tax Exemption
Solar also helps you increase the value of your home. Specifically,, according to Zillow, homes with solar sell for about 4% more than homes without solar. They also sell faster than their non-solar counterparts. In some cases, the value increase pays for the system all by itself!
But of course, an increase in your home’s value can have a negative impact by increasing your property taxes. However, a state law exempts that increased value for a period of 20 years.
Home Solar Project Sales Tax Exemption
Sales taxes also don’t apply to a new solar system, which means saving as much as 6.25% of your solar project cost right away (to be exact, Mass State sales tax doesn’t apply to the labor cost, just to materials). It’s like having a sales tax holiday 365 days of the year. (Note however that this exemption is for residential installations only. Commercial businesses still must pay the sales tax – unless they are exempt due to their type of business.)
Although these tax exemptions aren’t huge amounts of money, we believe every dollar counts when trying to help the planet.
Last but not least, Massachusetts has an incentive program for solar battery systems. Unfortunately as of today, the Connected Solutions program is only available for NationalGrid or Eversource customers, but If you live in their service area where backup power would make sense for you, the Connected Solutions program can make a solar battery quite price competitive with a fossil fuel whole house system. (Particularly with the PWRcell system from Generac that we sell – no other battery system comes close to matching it.)
By installing a solar battery (from a participating manufacturer) and enrolling your home in ConnectedSolutions MassSave says “you can earn incentives just for allowing them to draw energy stored from your battery during times of peak electricity demand to help balance out the electric grid.”
The process is simple. Just add a battery storage system with a new or existing solar system and sign up for the program (we can handle that for you). Then, a few times each summer the utility might send you an email asking if you’re willing to participate in a “peak demand” event, typically the next day. If you don’t object, the utility will send a signal to your system to allow your battery to send power back to the grid to help it handle the peak power demand that day. You probably won’t even notice it happening.
According to MassSave, your sponsor will call upon your battery several times per summer and only five times per winter, with each event lasting a maximum of three hours. In return, your sponsor will pay you $225 per kilowatt during the summer and $50 per kW in the winter.
This solar incentive in Massachusetts is also designed to avoid drawing from your battery when there is a chance of a power outage, so it shouldn’t decrease your battery capacity when there’s a risk of inclement weather. You can also opt out of as many events as you like so there’s no harm in signing up for the program.
Currently the inverters/batteries that are participating in this program are Enphase, SolarEdge, Sonnen, Tesla, and our favorite: the Generac PWRCell (because it is the only solution that can provide a whole house backup system with just a single battery).
That said, different batteries will likely earn different amounts. Roy Van Cleef told us “It depends on the capacity of the battery, output power, length of event, how many events are participated in etc. There are lots of variables but Generac estimates about $1,800 a year for 5 years. Tesla (and SolarEdge) would be lower since it is a smaller battery with lower output.”
If a solar battery is something you may be interested in getting, please don’t hesitate to call or fill out a request on our website. In total, there are still a lot of ways to save on the cost of going solar throughout our service territory, but many of the solar incentives in Massachusetts are far from simple. To that end, you can trust us to stay on top of the options, explain them, and make the entire process as simple as possible.
To read our previous blogs on state incentives: