Massachusetts Solar Tax Credits, Incentives and Rebates (2024) – MarketWatch
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).
