Answer
Aug 11, 2020 - 01:13 PM
Incentives for solar panels are different if you buy your solar panels outright vs. enter a Power Purchase Agreement (PPA). If you buy a system outright, available incentives include:
Federal Tax Incentive
The system cost can be taken as a credit against your federal income taxes for the year you install your system. If your tax credit exceeds your tax liability in the year that you install the system, you can carry forward unused credits for a limited period of time. Any additional work such as tree removal, roof replacement, or electrical system upgrades that are done as part of the solar installation will usually qualify for the tax credit (please consult a tax professional about your personal situation). With the passage of the Inflation Reduction Act, the credit will hold at 30% of project costs through 2032, then step down to 26% in 2033 and 22% in 2034.
State Tax Credit & other state incentives
• 15% of the system cost can be taken as a Massachusetts state tax credit, up to a maximum of $1,000.
• Purchases of residential solar systems are exempt from Massachusetts state sales tax.
• Under Massachusetts law, the installation of a solar PV system is exempt from property tax increases for the first 20 years of use. Your property taxes can go up for other reasons, but they cannot be raised due to the addition of a solar PV system for the first 20 years of ownership.
• If you qualify based on your income, the state will pay for 10% to 30% of the system cost through the Mass Solar Loan program (see the FAQ on loan programs for low to moderate income homeowners below).
The Solar Renewable Massachusetts Renewable Target (SMART) Incentive
The State of Massachusetts pays residential electric customers a fixed rate per kilowatt hour (kWh) of solar energy produced for the first 10 years of ownership. For systems under 25 kilowatts (kW), the rate ranges from 29 to 31 cents per kWh, depending upon your location and utility. For comparison, the regular retail electricity rate in Massachusetts is closer to 20 cents. In addition, the state provides higher incentive rates for low-income customers or those who install battery storage to pair with their solar panel system, making solar power more accessible to more customers in the state. SMART payments will decrease over time and will decrease as the cost of electricity rises.
Net Metering Credits
When your solar system is connected to the grid, you'll get a new meter installed that runs in both directions: measuring how much electricity you take from the grid, as well as how much you send into the grid. At the end of the month, you'll pay only for the net amount of electricity used (which could be zero!).
