I want to give you an insider‘s overview of all the incentives waiting for Massachusetts residents who go solar. By tapping into federal tax credits, state rebates, and utility savings programs, you could cover 30-40% of a solar array‘s costs while locking in decades of electricity bill reductions.
Sound too good to be true in a notoriously overcast state? Read on!
Solar Panels Offer Massive Savings Potential for Bay Staters
Massachusetts has the 7th most expensive residential electricity in the continental U.S. – 21 cents per kWh! The average home uses 8,669 kWh per year, racking up nearly $1,821 in annual utility bills.
Meanwhile, solar costs have dropped 70% over the last 10 years, making it far more affordable to invest in rooftop systems.
And thanks to Massachusetts‘ state policies that actively encourage renewable energy adoption, you can access incentives that minimize upfront costs and maximize long-term savings:
Massachusetts Solar Incentives
| Incentive | Overview |
|---|---|
| Federal Tax Rebate | Up to 30% system cost refund through 2032 |
| State Tax Credit | 15% off system costs, up to $1000 |
| Utility Company Rebates | 50-100% cash back from local energy providers |
| Net Metering | Bill credits roll over forever for excess solar energy fed to grid |
| SMART Performance | Solar utilities pay $0.08 per generated kWh over 10 years + bonus rates for low-income residents |
With smart planning, you could cut the upfront cost of a solar array nearly in half while saving tens of thousands long term.
Intrigued by the savings potential? Let‘s dig deeper into each incentive and crunch the cost benefit numbers.
Slash Equipment Expenses with Federal + State Tax Credits
We‘ll start with the solar tax refund programs offered at both the federal and Massachusetts state level. Both provide an excellent percentage-based credit that helps offset the steep equipment and installation pricing.
30% Federal Solar Investment Tax Credit
The federal government issues a personal income tax credit worth 30% of your solar project costs incurred through the end of 2032. Eligible expenses include:
- Solar panels and racks
- Inverters + electrical equipment
- Installation labor
- Permitting/inspection fees
- Sales tax
So if you pay $15,000 for a new 5 kW solar array, you would receive a $4,500 tax credit (30% x $15,000).
The only catch is that you must own your solar array rather than leasing from a solar provider to claim the credit. But for purchasers, it yields huge upfront savings at tax time.
The 30% rate lasts until the end of 2032, then it begins stepped annual reductions through the end of 2034 when it phases out completely.
15% State Tax Credit Up to $1,000
Massachusetts also offers its own statewide solar tax credit program: a 15% credit for installation costs, up to $1,000 maximum.
So on that same $15,000 array, you‘d save another $1,000 off the final price when filing state taxes.
Between both credits, nearly 40% of your solar equipment purchase can be refunded!
That drastically reduces the payback timeframe and APS calculations compared to simply comparing system cost vs. utility bill savings.
Utility Company Rebate Programs – 50%+ System Cost Coverage
Okay, so the direct tax credits are great. But Massachusetts utility providers also run some extremely generous solar rebate programs on top of that!
For example:
- Reading Municipal Light Department – $1,200 per kW installed, capped at 50% system cost
- Unitil – One time rebate of $0.40/Watt
- Eversource – $0.40/Watt production incentive for 5 years
You‘ll have to check with your local utility company to confirm their current solar offerings. But programs typically cover 30-60% of total solar equipment and installation expenses.
For a $15,000 solar array, you might get $5,000+ back directly from utilities through rebates.
That drops your out-of-pocket purchase price down to nearly nothing after stacking state/federal tax credits!
Net Metering Offsets Electricity Bills
Okay, so we‘ve covered how to wipe out a big chunk of the initial solar purchase cost through credits and rebates. Awesome!
But Massachusetts also enables you to offset ongoing usage costs by leveraging net metering bill credits.
Net metering requires your utility company to give you credits for any excess solar electricity that your panels send back to the grid. That typically happens during sunny midday periods when your solar system produces more power than your home is immediately using.
The utility energy meters spin backwards as the excess energy gets pushed back into the broader grid. Hence the term "net metering."
Massachusetts differs from many states in that net metering credits roll over month-to-month indefinitely. So if you overproduce a surplus in June, you can apply those credits to reduce your bill even in the darker winter months.
The credits directly offset your kWh electricity usage from the grid at the retail volumetric rate.
For a household that offsets 75-90% of its annual electric needs with a properly-sized solar array, the bill savings really add up!
SMART Incentives – Get Paid for Your Solar Power ($500+ Per Year)
So clearly, between equipment tax credits and usage bill offsets from net metering, Massachusetts makes it advantageous to adopt solar.
But wait, there‘s more!
The state also implemented the SMART incentive program in 2018 requiring utility companies to directly compensate rooftop solar producers through Solar Renewable Energy Certificate (SREC) payments.
Here‘s how it works…
For every 1,000 kWh of solar energy your rooftop system produces, you‘ll earn a single SREC. Utilities then have to purchase these SRECs from you at a rate of 8 cents per kWh, set for a 10-year period.
An average-sized 6 kW array in Massachusetts might produce ~6,500 kWh per year. At a payout rate of $0.08 per kWh, that‘s over $520 in extra annual income from selling SRECs!
And for low-income residents, SMART pays an enhanced incentive rate up to 13 cents per KWh!
So solar electricity generation leads to direct cash compensation through SREC sales – a nice perk unique to Massachusetts‘s advanced energy economy.
Running the Numbers – Solar Delivers Over $28,000 Total Lifetime Savings
We‘ve covered the main savings levers:
- Federal & state tax credits
- Utility rebates
- Ongoing bill offsets from net metering
- Extra income selling Solar Renewable Energy Certificates
Altogether, they can reduce costs by 50% or more both immediately and over the full 25+ year panel lifetime.
Let‘s see the total savings impact based on real-world system assumptions:
Cost and Savings Overview:
- 6 kW solar array
- Equipment/installation cost = $17,220
- Federal tax credit = $5,166 (30% refund)
- State tax credit = $1,000 (15% refund)
- Utility rebate = $5,000 (assume from Reading Municipal Light)
- Net metering bill offsets = ~$840 per year
- SMART extra income = ~$520 per year
- Time to full payback = Year 6
Running the 25-year solar panel savings projections with these Massachusetts-specific incentives yields over $28,000 in total lifetime financial benefits!
That‘s some serious bank to pad your retirement.
Should You Buy vs Lease? Run Your Own Numbers!
Deciding between buying solar panels vs leasing them is situational. Leases come with $0 down, predictable monthly rates, and system maintenance/monitoring included.
However, purchasing gets you higher long term savings, full access to tax incentives, and often a home value boost.
As a Massachusetts homeowner specifically, the rebates, credits, and performance payments still make buying generally the better option financially. You just have to weigh whether upfront affordability trumps maximizing lifetime savings.
I suggest modeling out projected 25-year costs and savings each way using an algorithm like on EnergySage‘s website. That will reveal your personal financial breakeven based on Massachusetts‘s solar benefits.
Ready to Run Your Massachusetts Solar Savings Calculations?
I hope this overview has shown you why Massachusetts homeowners pursuing solar stand to receive exceptional tax incentives, utility rebates, and ongoing electricity offsets that greatly accelerate system payback.
The state’s impressive incentive ecosystem cuts lifetime solar panel costs far below relying solely on monthly bill reductions.
If the savings potential looks compelling, connect with our solar sales team or start researching the most reputable local installers to quote your property.
Feel free to reach out if any other Massachusetts-specific solar questions come up!
