Massachusetts Solar Incentives, Tax Credits, and Rebates (2024 Guide)
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Many Massachusetts residents saw their electricity bills increase significantly in the past year. National Grid customers saw a 29% increase to their basic service rate at the end of 2023, and Eversource customers found out in early 2024 that their utility bills would be raised to compensate for other customers’ unpaid balances. It’s not surprising that many homeowners in Massachusetts are considering moving to solar energy to reduce energy costs.
Massachusetts offers many solar incentives to help you save money when switching to solar power. Below, we summarize the top solar incentives available to Bay State residents. Check out our list of the best solar companies in Massachusetts when you’re ready to start the installation process.
What Solar Tax Credits and Rebates Does Massachusetts Offer?
Massachusetts offers several solar tax credits and exemptions to keep solar costs low. Massachusetts is rare in that it offers multiple state-level incentives that truly benefit residents when going solar. This may be why the state has over 159,000 solar installations and 24.4% of its energy coming from solar power, according to the Solar Energy Industries Association (SEIA).
- 86% applied for a solar incentive program
- 64% took advantage of the federal solar tax credit
- 32% enrolled in a net metering program
- 30% used a local rebate program
Here are the top solar incentive programs Massachusetts homeowners can apply for. We describe them in more detail below.
| Incentive | Type | Where It Comes From | What It Provides |
|---|---|---|---|
| Home solar project sales tax exemption | Tax exemption | State | Waived sales tax on solar systems |
| Residential renewable energy income tax credit | Tax credit | State | A 15% state tax credit on solar systems |
| SMART program | Tariff | State | Payment for every kWh of solar power generated for 10 years |
| Solar installation property tax exemption | Tax exemption | State | Waived property tax on increased home value due to solar installation |
| Net metering | Bill credit | Local | Free electricity from your utility company |
| Federal solar tax credit | Tax credit | Federal | A reduction in your federal income taxes worth 30% of your solar installation cost |
Can You Qualify for the Federal Solar Tax Credit in Massachusetts?
Yes. The federal investment tax credit (ITC) allows you to claim a percentage of your solar system costs on your federal taxes. Qualifying homeowners must install the system during the tax year. You must also own the system, either by purchasing it up-front or taking out a solar loan. Those who lease their systems or enter into a power purchase agreement (PPA) aren’t eligible.
The federal credit currently equals 30% of your total system cost and related expenses. It will reduce to 26% in 2033 and 22% in 2034.
Qualifying expenses include the following:
- Solar PV panels or PV cells
- Balance-of-system equipment, such as wiring, inverters, and mounting equipment
- Contractor labor costs for on-site preparation, assembly, or original installation, including permitting, inspection, and developer fees
- Energy storage devices that have a capacity rating of 3 kilowatt-hour (kWh) or more
- Sales taxes on eligible expenses
It’s important to note that this is a tax credit, not a tax refund. A tax refund is paid out to the taxpayer, but a tax credit reduces the amount of taxes owed. For more detail, read our complete thoughts on the federal solar tax credit.
Does Massachusetts Offer Net Metering?
If your utility provider offers net metering programs, also called buyback programs, in Massachusetts, you can participate. Most solar panel systems produce more energy than your home needs. Net metering programs allow system owners to sell this any excess energy their solar system produces back to the grid for utility bill credits, which they can use to pay for any electricity they rely on the power grid for if their system ever underperforms. Eversource and National Grid are the two main utility companies participating in Massachusetts net metering.
Other Ways To Save on Solar in Massachusetts
While the federal tax credit and net metering programs are provided at the federal and local levels, Massachusetts has multiple state-based solar incentives.
The Residential Energy Credit is one of the main tax credits Massachusetts residents can benefit from. An owner or tenant of a residential property located in the commonwealth who is not a dependent of another taxpayer and who occupies the property as their primary residence is eligible for a 15% state tax credit on purchased residential solar systems.
The amount of credit a taxpayer claims in one year can’t exceed the taxpayer’s income tax liability for that taxable year.
Massachusetts’ SMART program is similar to Solar Renewable Energy Credits (SRECs), which are available in other states. It allows homeowners to receive payments from their utility company for every kilowatt-hour of solar power they create for 10 years.
This credit is paid directly by the utility company to the system owner once their application is approved by the Solar Program Administrator and the Department of Energy Resources (DOER). You must be a customer of one of three investor-owned utility companies in Massachusetts to be eligible: Eversource, National Grid, or Unitil. SMART payment rates vary depending on your local area.
Does Massachusetts Have a Property Tax Exemption?
Massachusetts offers state tax exemptions that help residents save money. Installing a solar panel system can increase your property value, but Massachusetts exempts residents from paying property tax for this added value for 20 years. Note that this does not exempt you from property tax in general, only the added value a wind or solar energy system provides.
Does Massachusetts Have a Solar Sales Tax Exemption?
Massachusetts’ Home Solar Project Sales Tax Exemption prevents you from paying the state’s 6.25% sales tax on your solar panel system. This applies to any equipment directly related to any solar, wind-powered, or heat pump system used as primary or auxiliary power for a property’s energy needs. The property must be the taxpayer’s primary residence.
How Much Do Solar Panels Cost in Massachusetts?
The average cost of solar panels in Massachusetts is $34,249 for a 10-kW system before applying any solar incentives. Applying the federal solar tax credit can save you several thousand dollars, no matter your system size. Here’s a closer look at what you could spend and save.
| System Size | Average Cost* | Cost After Federal Tax Credit |
|---|---|---|
| 5 kW | $17,125 | $11,987 |
| 6 kW | $20,549 | $14,385 |
| 7 kW | $23,974 | $16,782 |
| 8 kW | $27,399 | $19,180 |
| 9 kW | $30,824 | $21,577 |
| 10 kW | $34,249 | $23,974 |
Does Massachusetts Have a Free Solar Panel Program?
No, you can’t get free solar panels in Massachusetts, but the state offers several solar rebates and tax incentives to reduce costs. This includes the Residential Renewable Energy Income Tax Credit and Solar Massachusetts Renewable Target (SMART) Program, plus property and state sales tax exemptions.
How Do I Apply for Solar Incentives in Massachusetts?
Your solar installer can advise you on the Massachusetts solar incentives you qualify for and get you started with applying. Here’s how to begin the process:
Massachusetts Solar Companies We Recommend
If you’re ready to speak with a solar provider about your options, these are the Massachusetts solar companies we most recommend:
- Freedom: Freedom Solar is one of the best solar brands in the industry. Offering highly efficient solar panels as well as on-grid and off-grid installations.
- Momentum: Momentum installs only Tier 1 solar panels, which are known for having a longer life span. One standout feature of Momentum is its app which allows you to easily monitor and analyze your system’s performance in relation to weather and system health.
Is Going Solar in Massachusetts Worth It?
According to our survey data, 96% of those who purchased solar panels in the last three years said it was worth it. Massachusetts is among the top 10 states pushing to increase solar energy use and reduce greenhouse gas emissions. The state provides many solar incentives to make the transition more affordable for residents, and with Massachusetts electricity rates rising, this is a big advantage for those who want to separate from the power grid and invest in solar energy.
According to EnergySage, if you buy a 5 kW system, you stand to save roughly $79,711 in energy savings over 20 years, with the average break-even point at about seven years for Massachusetts residents. These savings are substantial, proving you don’t have to live in sunny Florida to benefit from clean energy. New England homeowners can still see a big reduction in electricity costs by going solar.
FAQs About Massachusetts Solar Incentives
Does Massachusetts offer a solar tax credit?
Yes. Massachusetts offers a solar tax credit. Its Residential Renewable Energy Income Tax Credit provides a 15% state tax credit to solar owners. Residents are also eligible for the 30% federal tax credit.
What is the MA SMART solar incentive program?
The MA SMART solar incentive program allows homeowners to receive payments from their utility company for every kilowatt-hour of solar power they create for 10 years. Participating utility companies include Eversource, National Grid, and Unitil.
Our Rating Methodology
We are committed to providing comprehensive and unbiased reviews to our readers. After over a thousand hours of research on solar companies, interviews with experts, and common customer needs, we’ve created a detailed rating system for solar providers based on six factors:
- Solar equipment, installation, and services (25%)
- Warranty and performance guarantees (25%)
- Brand reputation and certifications (15%)
- Financing options (15%)
- Experience (10%)
- Availability (10%)
Total scores are divided by 20 for a final 5-point rating scale.
To share feedback or ask a question about this article, send a note to our Reviews team at reviews@thisoldhousereviews.com.
