Massachusetts Solar Incentives and Tax Credits (2024)

By Jessica Wimmer Updated February 6, 2024

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Massachusetts may not be considered a particularly sunny state, but it’s a surprisingly great place to transition to solar energy. According to the Solar Energy Industries Association (SEIA), the Bay State has invested $9.6 billion in renewable energy, and over 20% of its electricity comes from solar power.

Massachusetts offers homeowners multiple ways to save money when switching to solar energy. In researching the industry’s best solar companies, we’ve analyzed solar rebates and incentives nationwide. See which incentives Massachusetts residents qualify for below.

 


 

Overview of Massachusetts Solar Incentives

Here are the key solar incentives available in Massachusetts:

IncentiveWhere It Comes FromWhat You Get

Residential renewable energy income tax credit

State government

15% credit on your Massachusetts income tax ($1,000 maximum credit amount)

Solar Massachusetts Renewable Target (SMART)

State government

19–31 cents per kWh (varies by location and utility company)

Property tax exemption

State government

No system property tax

Sales tax exemption

State government

No system sales tax

Net-metering

Local utility companies

Money back for your excess electricity

Federal solar tax credit

Federal government

30% of the system cost claimed on taxes

 


 

Massachusetts Solar Incentives, Tax Credits, and Rebates

Taking advantage of Massachusettsincentive programs can save you thousands of dollars on solar system costs. Learn about each available program below.

Residential Renewable Energy Income Tax Credit

Massachusetts’ renewable income tax credit allows homeowners to claim 15% of their solar installation costs on their Massachusetts income taxes, with a $1,000 maximum credit.

Additional resources:

Solar Massachusetts Renewable Target (SMART)

Under the SMART program, Massachusetts pays Eversource, National Grid, and Unitil customers a fixed rate per kilowatt hour (kWh) of solar energy produced for 10 years. The rate ranges from 19 to 31 cents per kWh for systems under 25 kilowatts (kW), depending on your location and utility. Most residential systems are under 10 kW.

Additional resources:

Property Tax Exemption

Installing solar panels increases home value. This typically raises the property taxes you owe, but Massachusetts makes an exception for solar installations. However, this exemption is only in place for 20 years from the time of installation. After 20 years, you must pay property tax on the full property value.

Additional resources:

Sales Tax Exemption

Massachusetts waives its 6.25% state sales tax for solar equipment. The solar company you buy your system from automatically won’t apply this tax. For the average residential solar panel system, that’s around $1,000 you don’t have to spend.

Additional resources:

Net-Metering

Net-metering is a billing program that helps system owners earn money while saving on electric bills. You can sell any excess energy your system generates to your local utility company through a net-metering program in exchange for a payout or electric bill credits.

Utility companies Eversource and National Grid have Massachusetts’ top net-metering programs.

Additional resources:

 


 

Federal Tax Credit

One of the most lucrative ways to save on solar panels is the federal solar investment tax credit (ITC), also referred to as the residential clean energy credit. This nationwide program originated with the Energy Policy Act of 2005. It allows you to claim a percentage of your solar energy system costs on your federal taxes the year you install it. This percentage has changed throughout the years but will stay at 30% until 2033.

The average home solar system in Massachusetts costs around $17,800.* The federal tax credit allows you to claim $5,300 of this price on your taxes for a total cost of $12,500. Only homeowners who purchase their system in cash or take out a loan qualify. Leasing and power purchase agreement (PPA) customers are ineligible because they don’t legally own their systems.

The ITC is a onetime credit, but you can carry it over to the next tax year if you can’t use it all when you file. For example, if you owe $3,000 in taxes the year you install and get a $4,000 tax credit, you’ll owe $0 on that year’s federal tax bill and reduce the next year’s by the leftover $1,000.

You can claim the solar tax credit when you file your yearly federal tax return. Let your accountant know in advance. You must fill out IRS Form 5695 if you manage your own taxes.

*Cost data in this article is sourced from Energy Sage.

 


 

Massachusetts Solar Costs

Residential solar panel systems in Massachusetts cost between $15,130 and $20,470. The average gross system cost is $17,800 before applying any incentives. System size, panel type, installation company, labor, location, and more all impact how much you’ll pay.

 


 

Is Going Solar in Massachusetts Worth the Investment?

Yes, going solar in Massachusetts is worth the investment. The state has some of the highest electricity rates in the country, as is typical for New England areas. Combined with the fact that the state’s average solar system cost is in the low-to-mid price point compared to the national average, Massachusetts system owners can save a lot by going solar. EnergySage estimates that Massachusetts homeowners stand to gain an average of $55,758 in energy savings over 20 years.

 


 

Our Recommendation

There are many ways Massachusetts residents can save on their solar projects. Your installer can help you understand which incentives you qualify for and collect the necessary paperwork. If you’re ready to shop for solar companies, we recommend SunPower and Sunrun for their high-efficiency panels, reputation, and comprehensive warranties. We suggest getting a quote from at least three companies to compare pricing before deciding.

Homeowners Save $20,000 to $97,000 with Solar Panels on Average Over Typical System Life Span
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Massachusetts Solar Incentives FAQ

Does Massachusetts offer solar incentives?

Yes. Massachusetts offers multiple solar incentives and rebate programs. It also waives sales and property tax for solar equipment. Those who own their system also qualify for the federal solar tax credit.

How much does solar cost in Massachusetts?

Solar panel systems in Massachusetts cost between $15,130 and $20,470, with the average system cost being $17,800 before using any solar rebates or tax credits.

Are solar panels tax-exempt in Massachusetts?

Yes. Massachusetts waives sales tax on solar equipment and property tax on the increased home value solar panels add.

 


 

How We Chose the Top Solar Companies

We researched and analyzed dozens of solar panels and solar installation companies. We then formulated a rating system based on each solar installer or manufacturer’s services and products. We weighed several significant factors, including the quality and type of solar panels offered, the customer support network, warranty lengths and limitations, and additional benefits such as mobile apps for monitoring and customer service.

Speaking directly to representatives, we determined how each solar company personalizes its solar panel installation for each home. We also analyzed each company’s warranty options to ensure their product and performance guarantees match or exceed industry standards.

We evaluated each provider based on their rating and history with the Better Business Bureau (BBB) to determine reputation. In addition, we analyzed the 100 most recent Google Reviews for each provider across various locations and branches.

Read more: Our Methodology