Massachusetts solar rebates and incentives: 2024 guide

The average Massachusetts solar shopper will save $5,042 on solar panels with rebates and incentives.

Updated May 7, 2024

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    Written by: Emily Walker

    Solar panel systems in Massachusetts are expensive, but incentives from the state and federal governments can help you reduce the upfront cost. Between the federal tax credit and state-specific incentives, you can save thousands on solar panels, making them well worth the investment. Here's how you can lower the cost of solar if you live in Massachusetts.

    See how much solar costs in Massachusetts

    As a Massachusetts homeowner, you have access to some great incentives that can substantially improve your return on investing in solar panels. The three below are some of the most impactful ways to bring down your solar costs.

    Incentive
    Average savings in Massachusetts
    Description

    Residential Clean Energy Tax Credit, formerly the federal investment tax credit (ITC)

    $5,042

    Lowers your solar panel system's cost by 30%

    MA Residential Energy Credit

    $1,000

    Lowers your solar panel system's cost by 15%, or up to $1,000

    Solar Massachusetts Renewable Target (SMART)

    $0 with solar only but could be about $500 annually if you have a battery

    Used to pay you a fixed rate per kilowatt hour (kWh) of solar energy, but caps were met. It could be reinstated in the future, but for now it only really earns you money if you have a battery.

    Residential Clean Energy Credit

    The Residential Clean Energy Credit, formerly known as the federal investment tax credit (ITC), can reduce your solar panel system's cost by 30%. Your entire system qualifies for this incentive, including equipment, labor, permitting, and sales tax.

    The average cost for a 5 kW solar panel system in Massachusetts is around $16,807. Once you factor in the 30% credit, the cost comes down to $11,765.

    When you file your federal income taxes, you can claim this incentive as a credit towards your federal tax bill. Just keep in mind that to qualify for the ITC, you need to purchase your system either with cash or a solar loan–if you lease your system, you won't be eligible.

    You also need a high enough tax bill, though you can roll over any remaining credit year-to-year until the end of 2034 when the ITC expires. The only time you might be eligible for a direct payment for the ITC is if you're a tax-exempt entity, like a nonprofit organization.

    MA Residential Energy Credit

    When it comes to clear cut state solar incentives, it doesn’t get a lot simpler than the MA Residential Energy Credit. If you live in MA, you'll get a credit worth 15% of your solar panel system cost, up to $1,000, towards your MA state income tax bill. The only catch is that your system has to be installed on your primary residence.

    Solar Massachusetts Renewable Target (SMART)

    Massachusetts introduced its SMART program in 2018 as a way to compensate solar owners for the electricity their systems generate after its solar renewable energy certificates (SREC) program reached capacity. Under the SMART program, Massachusetts paid Eversource, National Grid, and Unitil customers a fixed rate per kilowatt hour (kWh) of solar energy produced for 10 years. 

    Due to the program's popularity, the available incentive capacity filled up fast. In 2023, Massachusetts announced that because of this low capacity and record-high electricity rates, most Massachusetts customers will receive either an extremely low monthly incentive payment or no payment at all

    However, according to reporting from the Boston Globe, Massachusetts Energy Resources Commissioner Elizabeth Mahoney has said that "a new incentive program is in the works" to replace the SMART program. Hopefully, we'll have news on that program in 2024.  

    In the meantime, you may instead be eligible to participate in Massachusetts' Renewable Portfolio Standard (RPS) program to earn a small compensation. Or, if you add energy storage to your solar panel system, you'll still receive some compensation under the SMART program.

    In addition to the great rebates and incentives above, Massachusetts also offers tax exemptions for solar panel systems. The solar sales tax exemption ensures that you won't have to pay a sales tax on your system, while the solar property tax exemption means you don't need to pay a higher property tax for adding solar panels to your house.

    Tax exemption
    Description

    Massachusetts solar sales tax exemption

    You don't need to pay any sales tax on new solar panel systems in Massachusetts, saving at least 6.25% of your system costs.

    Massachusetts solar property tax exemption

    If you use solar energy as a source of power, for 20 years you won't need to pay a tax on the value your solar panels add to your property.

    If you connect your solar panel system to the grid, you can benefit from net metering, one of the best solar panel incentives available in Massachusetts. With net metering, you earn credits when you send excess electricity from your solar panels to the grid. When the sun isn't shining and you need to pull electricity from the grid, your utility will apply the credits to your bill. Net metering makes it so you will owe very little, or even nothing, on your electric bills with solar panels. 

    A few municipal utilities in Massachusetts don't offer net metering, but all three regulated electric companies must support it for solar panel systems with inverters rated under 10 kW. Your actual solar panel system size could be a bit larger than 10 kW, but your inverter size must be below it. If you have a three-phase power supply (this will mostly be mid-sized businesses or large housing developments), net metering is supported for systems with inverter ratings up to 25 kW. If you exceed these numbers, you'll only receive 60% of the net metering credits instead of 100%. 

    In August 2022, Massachusetts signed a new solar policy into law that increased the residential net metering inverter rating limit from 10 kW to 25 kW but it still hasn't gone into effect. The Department of Public Utilities made some revisions to the state's net metering regulations in 2024 and says it "will open a rulemaking to implement additional revisions" soon. Hopefully, that includes increasing the residential cap.

    Learn more about Massachusetts net metering programs:

    Eversource National Grid Unitil

    In addition to solar incentives, Massachusetts also offers some great battery incentive programs to bring down the price of energy storage. As we said before, unlike with a solar only system, you can earn some compensation through the SMART program if you also have a battery.

    Mass Save also runs a demand response program called ConnectedSolutions. In this program, you allow your utility company access to your battery's stored energy from June through September, between 3-8 pm. In exchange, you'll receive $275 for every kW your utility company pulls from your battery during times when the grid is strained. If you participate, you'll qualify for 0% interest financing for your battery and you'll be locked into the program for five years. 

    All batteries above 3 kWh in size are also eligible for the 30% federal tax credit.

    Learn more about Massachusetts's battery incentive programs See the complete list of solar companies in Massachusetts

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