Solar Incentives in Massachusetts (2023 Guide)

Many Massachusetts residents saw their electricity bills skyrocket in 2022. Customers of the utility company National Grid saw a 64% increase starting Nov. 1, while Eversource customers saw a spike of 23%. So it’s not surprising that some homeowners are considering switching to solar energy to reduce energy costs.

Though installing a solar power system is expensive, Massachusetts offers many solar incentives to help you save money. Below, we at the This Old House Reviews Team break down the top solar incentives available to Bay State residents. Check out our list of best solar companies when you’re ready to start the installation process.

Massachusetts offers several solar tax credits and exemptions to keep solar costs low. A tax exemption means you won’t have to pay taxes on a particular service or item, while a tax credit is a dollar-for-dollar reduction in the amount of income tax you would otherwise owe.

Here are a few other solar incentive programs Massachusetts homeowners can apply for.

Solar Massachusetts Renewable Target (SMART) Program

Massachusetts’ SMART program is similar to Solar Renewable Energy Credits (SRECs) available in other states. It allows homeowners to receive payments from their utility company for every kilowatt-hour (kWh) 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. 

More resources:

• Mass.gov – SMART program
• Mass.gov – SMART launch

Residential Renewable Energy Income Tax Credit

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 personal income tax liability for that taxable year. 

More resources:

• Mass.gov – Residential Energy Credit

Solar Installation Property Tax Exemption

Installing a solar panel system can increase your property value, but Massachusetts exempts residents from paying property tax for this added value for a 20-year period. Note that this does not exempt you from property tax in general; only the added value a wind or solar energy system provides.

More resources:

• DSIRE – Massachusetts Property Tax Exemption

Home Solar Project Sales Tax Exemption

The Home Solar Project Sales Tax Exemption prevents you from paying Massachusetts’ 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 that’s used as primary or auxiliary power for a property’s energy needs. The property must be the taxpayer’s primary residence.

More resources:

• Mass.gov – Sales and Use Tax

Net-Metering

Most solar systems produce more energy than your home needs. Net-metering programs allow solar system owners to sell this excess energy to their electric company for utility bill credits. Eversource and National Grid are the two main utility companies that participate in net-metering in Massachusetts.

More resources:

• Mass,gov – Net-Metering

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 up-front or taking out a loan. Those who lease their systems or enter into a power purchase agreement (PPA) are disqualified.

The federal credit currently equals 30% of your system costs 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
• Contractor labor costs for on-site preparation, assembly, or original installation, including permitting, inspection, and developer fees
• Balance-of-system equipment, such as wiring, inverters, and mounting equipment
• Energy storage devices that have a capacity rating of 3 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.

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. Massachusetts is one of the top 10 states pushing to increase solar energy use and reduce greenhouse gas emissions. It provides many solar incentives to make the transition more affordable for residents.

SunPower, Momentum Solar, and Trinity Solar all make our top 10 list of solar companies due to their product quality, customer service, and warranty options. We recommend requesting at least three quotes to compare before making a decision.

The This Old House Reviews Team is 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.