Massachusetts solar incentives, tax credits and rebates

Residential solar panel incentives in Massachusetts

The federal solar investment tax credit (ITC) is usually the biggest financial incentive for most homeowners buying solar panels. Massachusetts also has property and sales tax exemptions on qualifying solar equipment.

• Federal tax credit: The ITC reduces your federal tax liability by 30% of the cost of installing solar panels. For example, if you spend $10,000 installing a solar panel system, the ITC is worth $3,000. If, in the year your system becomes operational, you owe $15,000 in taxes, the ITC reduces what you owe to $12,000. The credit drops to 26% in 2033 and then 22% in 2034.
• State tax credit: Massachusetts allows a 15% credit up to $1,000 against the state income tax for the net expenditure of a renewable energy system (including installation costs) installed on a person’s primary residence. You can carry over for up to three succeeding years if the credit exceeds your tax bill that year. Homeowners with new solar panels, solar water and space heating systems are eligible.
• Property tax exemption: Massachusetts law exempts homeowners from paying property taxes on the value that a new solar panel system adds to the property. This exemption covers value added for 20 years. The renewable energy equipment must be located on your property and have a capacity of 25 kilowatts (kW) or less.
• Sales tax exemption: State law exempts from state sales tax any equipment directly related to a solar panel system used as a primary or auxiliary power system on the property. Print an exemption form on the Massachusetts Department of Revenue website and present it to your vendor at the time of purchase.

Solar rebates in Massachusetts

• The Town of Concord offers a one-time rebate of $625 per kilowatt of installed solar panel generation capacity, up to $3,125 per service address.
• Hudson Light & Power offers $1.20 per installed watt for 50% of installed project cost, up to $7,500.
• MLP Solar Rebate funds are currently available in the following areas: Ipswich ($0.30 per watt, up to $3,000), Wakefield ($1.20 per watt, up to 50% of installed cost), Taunton ($1.50 per watt, up to $4,500) and Shrewsbury ($0.10 per watt, for 25% of installed cost, up to $1,000).
• Reading Municipal Light Department (RMLD) has a rebate program that pays eligible solar system owners $600 per kilowatt (up to $12,000). This cash incentive on this rebate comes with a condition that, in return, the owner of the solar system gives 100% of the Renewable Energy Certificates (RECs) to RMLD for the lifetime of the system.

Solar loans and PACE programs

• Mass Save HEAT loans offer up to $25,000 (depending on the utility) at 0% interest over terms of up to seven years. This financing is available to all homeowners who obtain a home energy assessment through the loan program and install the recommended energy efficiency improvements, including solar water heating systems.
• Energy Revolving Loan Fund lets homeowners take advantage of special financing terms through a Property Assessed Clean Energy (PACE) program. Cities that opt in can help homeowners and small businesses get special financing terms to fund energy improvements through up to 20-year loans. Local programs offer differing terms for this home improvement loan.

Massachusetts Renewable Target (SMART) Program

The Solar Massachusetts Renewable Target Program is an incentive program established by the Massachusetts Department of Energy Resources (DOER) to support solar development in the state.

Utility companies pay this tariff-based incentive directly to the owners of solar panel systems. The incentive amount varies based on location. Systems must be interconnected by one of these three investor-owned utility companies: Eversource, National Grid and Unitil.

To apply, solar installers submit applications for the DOER to approve. The application fee for small-scale solar is $142. After approval, the utility company pays the block-determined incentive directly to the system owner upon approval.

Additional solar incentives in Massachusetts

Check DSIRE for the most comprehensive source of information about solar incentives and policies in Massachusetts.

What to know about net metering in Massachusetts

Net metering is the process of selling excess electricity made by your solar panels to the power grid. In Massachusetts, the net energy generated by your solar system is monetized, and net metering credits are calculated based on the excess kilowatt-hour (kWh) produced.

As of March 1, 2024, Massachusetts revised its net metering program regulations to make the system easier for residents. The changes include:

• Allowing credit transfers between utilities
• Exempting larger facilities from caps
• Restructuring the net metering recovery surcharge to save ratepayers an estimated $10 million

Any grid-connected systems can still tap into the local power grid when needed. The alternative is to store it in a battery. That way, you can still turn your lights on when panels aren’t generating electricity, like at night or on especially cloudy days. The biggest downside is that solar storage battery costs can be almost as high as the panels — $7,000 to $18,000.

» GREENEST STATES: Massachusetts ranked No. 7 in 2024

How much are solar panels in Massachusetts?

After considering the federal solar tax credit, solar panel costs in Massachusetts typically range from $11,480 to $22,960.

Your system size greatly affects how much you pay overall. The typical system size for solar systems in Massachusetts is 8.28 kW. You might need a larger or smaller system, depending on your average household energy usage.

Average solar cost by system size in Massachusetts

Solar resources in Massachusetts

• Massachusetts net metering guide
• Massachusetts Solar Information & Program
• Mass Save guide to solar energy in Massachusetts
• Massachusetts Clean Energy Center

Find solar companies in Massachusetts

A good solar company helps you navigate local incentives, permitting and net metering policies. Compare our picks for Massachusetts’s top solar companies to learn more.

Bottom line

The ConsumerAffairs Research Team conducted an in-depth analysis to determine the average costs of going solar and incentives in other states. Turns out, that's worth it for many homeowners, particularly in Massachusetts.

Solar costs vs. savings: Massachusetts and nearby states