Massachusetts may not be the sunniest state, but a number of available incentives can make going solar an attractive option.
Updated:
Mar 30, 2024
Written by
Leonardo David
Leonardo David
Edited by
Sabrina Lopez
Sabrina Lopez
Massachusetts offers several incentives for solar power systems, which include tax exemptions and cash payments based on solar system performance. Massachusetts also has some of the highest electricity costs in the U.S., which means the kilowatt-hours produced by your home’s solar panels save a higher dollar amount on your monthly electric bill.
In this article, we will discuss the solar incentive programs available in the Bay State, from Boston to Springfield and everywhere in between. The best solar companies in your area can also help you understand current tax incentives and solar rebates.
Compare Massachusetts’ Top Solar Companies
Selecting a solar installation company can be an intimidating task with so many options to choose from and the risk of being scammed. To help make this process easier, we have come up with a list of the top solar installers in Massachusetts based on key factors such as cost, warranties, brand reputation, and services offered.
| Company | Star Rating | Cost of an 8 kW System* | BBB Rating | Visit Site |
|---|---|---|---|---|
| $24,000–$36,000 | A+ | GET QUOTE | ||
| N/A | B- | GET QUOTE | ||
| $20,000–$25,000 | A+ | GET QUOTE | ||
| $20,000–$25,000 | A+ | GET QUOTE | ||
| N/A | A+ | GET QUOTE |
| Company | BBB Rating | Star Rating | Cost of an 8 kW System* | Visit Site |
|---|---|---|---|---|
| A+ | $24,000–$36,000 | GET QUOTE | ||
| B- | N/A | GET QUOTE | ||
| A+ | $20,000–$25,000 | GET QUOTE | ||
| A+ | $20,000–$25,000 | GET QUOTE | ||
| A+ | N/A | GET QUOTE |
State Solar Incentives
Massachusetts residents have access to a wide variety of solar tax incentives which can reduce the overall cost of your solar panels. These include two tax exemptions, a state tax credit and even a cash payment per kilowatt-hour generated. All these incentives can be combined with the 30% federal tax credit. The state of Massachusetts provides information on current solar programs, so you can check what is available to you.
Residential Renewable Energy Income Tax Credit
- Incentive Value: 15% of home solar systems costs, up to $1,000
- Frequency: Single use, when installing your solar panels
Massachusetts has offered an income tax credit for renewable energy systems since 1979. The benefit covers many types of clean energy technologies: solar photovoltaic systems, wind turbines, solar water heaters and solar space heaters. You can claim 15% of your solar project costs as an income tax credit, up to a maximum amount of $1,000.
Sales and Use Tax Exemption for Solar Power
- Incentive Value: You don’t pay the 6.25% sales tax
- Frequency: Single use
Massachusetts normally charges a state sales tax of 6.25%. However, there is a sales tax exemption for renewable energy equipment such as solar panels, wind turbines and heat pumps. For a home solar system with a price of $16,500, the sales tax exemption is equivalent to $1,031.25.
Renewable Energy Property Tax Exemption
- Incentive Value: 100% property tax exemption for 20 years
- Frequency: Continuous
If you go solar in Massachusetts, the increase in home value resulting from your solar panels is exempt from property taxes for 20 years. If you own a $500,000 home and install a $25,000 solar panel system, your property taxes will still be calculated for $500,000, even if the actual property value has now increased to $525,000.
Solar Massachusetts Renewable Target (SMART)
- Incentive Value: Payment per kilowatt-hour generated; varies by location and utility company
- Frequency: Continuous
The Massachusetts SMART Program is one of the best solar incentives available in the U.S. If your home solar system qualifies, you get a bonus payment for each kilowatt-hour of electricity generated over a 10-year period. The SMART incentive is available for Massachusetts homeowners served by the three largest utilities in the state: Eversource, National Grid and Unitil.
The exact payment per kilowatt-hour is determined based on your location and the size of your solar energy system. Homeowners with rooftop solar arrays can expect to get 20-30 cents/kWh, and even higher rates are available for low-income households. Increased incentives are also available for solar power systems with battery storage.
The SMART Program is managed by the Massachusetts Department of Energy Resources (DOER).
Massachusetts Net Metering Explained
Massachusetts has a state net metering policy, which means you get credit for excess solar electricity sent to the grid. Privately-owned renewable energy systems up to 2,000 kW are eligible for net metering programs in the Bay State.
How To Enroll in Net Metering
The exact requirements for net metering vary depending on the electricity utility company serving your home. In Massachusetts, each power company establishes an annual capacity limit for net metering. However, home solar installations below 10 kW are eligible even if the annual limit has already been reached.
Each utility company has its own technical requirements for net metering, and you can read more on their official websites:
Federal Solar Tax Credit
The Solar Investment Tax Credit, or ITC, is a nationwide incentive residents can combine with the local tax credits available in Massachusetts. The solar federal tax credit is a straightforward concept:
You can claim 30% of your solar investment as a federal tax credit. For example, if you pay $16,500 for a 5 kilowatt (kW) home solar system, you would get a tax credit of $4,950. Thanks to the Inflation Reduction Act of 2022, the 30% federal tax credit is also available for all home battery systems with at least 3 kilowatt-hours (kWh) of capacity.
- For example, if you purchase a 10 kWh battery that has an installed price of $12,000, you would get an energy storage tax credit of $3,600.
- Adding the $4,950 tax credit obtained for the solar panel system, you would get a total incentive of $8,550.
The federal tax credit was previously 26%, and the incentive was set to expire after 2023. However, the Inflation Reduction Act increased the tax credit to 30% in August 2022, extending it through the end of 2034.
Massachusetts Solar Battery Incentives
Massachusetts not only offers financial incentives for solar panels but also has two major incentives for home battery systems.
SMART Program: Energy Storage Adder
- Incentive value: Between 1.58–4.87 cents per kWh
- Frequency: Continuous for 10 years
The SMART program offers an incentive for every kWh of energy generated by your solar panels. If you add a battery to your system, you can get an even higher incentive. To qualify for the SMART Program Energy Storage Adder, your battery system must meet two minimum requirements:
- Have at least 25% of the rated power output of your solar array
- Be able to provide stored electricity at rated power for at least two hours
To qualify for the highest possible incentive, your battery must meet the following requirements:
- Have the same rated power output as your solar array
- Be able to provide store electricity at rated power for six hours
The Energy Storage Adder is awarded in “incentive tranches” of declining value. As of October 2023, the incentive ranged from 1.58 cents per kWh for a solar battery system meeting the minimum requirements, up to a maximum incentive of 4.87 cents per kWh.
The SMART program provides an online incentive calculator to determine the exact rate for your solar battery system.
Eversource ConnectedSolutions Demand Response Program
- Incentive value: Up to $275 per kW
- Frequency: Once per year
Eversource offers the ConnectedSolutions Demand Response Program for solar battery owners. If you enroll in the program, Eversource pays you an incentive for letting the company use your energy storage capacity during times of high demand. The program has the following conditions:
- Offer an incentive rate of $275 per kilowatt of battery capacity participating in the program.
- The system owner can expect 30 to 60 demand response events per year, between June 1 and Sept. 30.
- Each demand response event lasts up to 3 hours, between 3 p.m. and 8:00 p.m.
According to the program website, the typical home battery can provide 5 kW of demand response. If you participate in the program with a battery of this capacity, you can make an extra $1,375 per year.
To be eligible, you must use inverters and batteries from one of the solar providers approved by Eversource, such as Sonnen, Generac, Tesla, SolarEdge, Enphase, Sol-Ark, Sunrun, Franklin WH or Fortress.
Estimated Solar Savings in Massachusetts
Massachusetts and other New England states are not particularly sunny, but local electricity prices are among the highest in the country. As of January 2023, the U.S. Energy Information Administration reported a national average price of 15.47 cents/kWh, but Massachusetts reached 31.71 cents/kWh.
- In a site with decent sunshine in Massachusetts, a 5-kW home solar system can be expected to generate around 7,000 kWh per year.
- At an electricity price of 31.71 cents, this is equivalent to $2,219 in annual savings.
You can expect to pay $16,500 for a 5-kW solar installation, according to the latest data from the Solar Energy Industries Association. However, you get back a $4,950 federal tax credit and a $1,000 state tax credit, reducing the net cost to only $10,550.
If your home solar system has an out-of-pocket cost of $10,550 and annual savings of $2,219, the payback period is less than five years.
Are Solar Panels Worth It in Massachusetts?
If you live in Massachusetts, installing a solar PV system is an attractive project from a financial standpoint. You get thousands of dollars in tax credits and exemptions right away, and the SMART program gives you a solar generation incentive over 10 years. Also consider that energy costs in Massachusetts are twice the U.S. average, which means each kilowatt-hour produced by solar panels also saves twice as much.
Each incentive program has its own technical requirements, and they can become very complex in some cases. However, the best solar companies have ample experience with incentive applications, and they can make sure your project qualifies. Based on the high cost of electricity in the state as well as the ample opportunities to save money, going solar is worth it for most homeowners in Massachusetts.
Frequently Asked Questions About Massachusetts Solar Incentives
Yes, for many residents of the Bay State, going solar is worth it. Massachusetts offers several incentives for solar power, and local electric tariffs are some of the highest in the U.S.
Tax credits and the SMART incentive can only be claimed by the owner of a property. However, the Mass Save program offers energy efficiency assistance for renters.
According to the latest Solar Market Insight Report, homeowners can expect to pay $3.30 per watt of capacity. This means a 5-kW home solar system has a typical cost of $16,500, while a 6-kW system has a typical cost of $19,800. However, the upfront cost of a solar panel installation becomes much lower after subtracting the 30% federal tax credit and other incentives.
Yes, you can claim 15% of your solar system costs as an income tax credit, up to a limit of $1,000. Keep in mind you also get the 30% federal solar tax credit.
