How to Save Money on Solar Panels in Massachusetts

save money on solar panels in georgia

How to Save Money on Solar Panels in Massachusetts

In 2018, the state of Massachusetts approved the SMART program, significantly helping residents and communities afford solar energy. The program is just one of many incentives available in the Bay State. Despite high equipment costs and notoriously cloudy weather, homeowners are in a position to save thousands with solar panels in Massachusetts.

However, with so many incentives available, you might not know where to start. From federal incentives to government regulations, there are ways to cut the cost of an installation, as well as earn money back over the course of a system’s lifetime. Read on for an in-depth breakdown of all the benefits available in the Bay State for solar.

How to Save Money on Solar Panels in Massachusetts: Overview

If homeowners were to simply consider the cost of solar panels in Massachusetts, they might find the decision to switch a difficult one. However, with the state having some of the highest electricity rates in the country, the cost balances out. 

It’s in the state-level incentives where residents of the Bay State can discover incredible savings with solar energy. Massachusetts has aggressive renewable goals, which leads to some of the most comprehensive benefits in the United States. In the form of federal returns, state financial incentives, and government regulations, homeowners have so many opportunities to earn money back.

save money on solar panels in georgia
Massachusetts currently produces over 19% of its energy with solar.

Solar Panels in Massachusetts: Federal Incentive

Before we get into Massachusetts’ state-level incentives, it’s imperative for homeowners to take advantage of the federal solar tax credit. This program offers a 30% return on any purchases made toward a solar installation, including equipment, labor, and even sales taxes. The benefit lasts until 2032 when it starts to taper off until its termination in 2035.

Qualifying homeowners in the Bay State could see a refund of as much as $5,000 depending on the size of the system. In order to qualify, residents in Massachusetts must meet a few prerequisites. Most prominently, they must purchase their system outright, whether with their own money or with a loan. Other qualifications include living at the home where the array is installed and purchasing new equipment.

The Bay State’s Credits and Rebates

Getting into the meat of the Bay State’s benefits, residents in Massachusetts are fortunate enough to have access to an additional state tax return. This credit works the same as the federal one, offering 15% of installation costs as a return on state income taxes. However, this credit is capped at $1,000.

Massachusetts used to have a state-level rebate program as well, but it was so popular that it ran out of funds. However, many utility companies also offer a great rebate, so there’s still money to earn back. For example, the Reading Municipal Light Department provides $1,200/kW installed for up to 20kW. This particular program has a 50% cost capacity (excluding sales taxes) of up to $24,000. For those installing a 6kW solar panel system, that’s an additional $7,200 back. 

The Bay State also has excellent net metering laws. With this program, utilities must pay for excess energy produced by residential solar arrays. Coming in the form of a credit, homeowners can connect their system to the utility grid for reduced monthly electricity bills. In Massachusetts, these credits roll over indefinitely.

There are even performance programs for low-income or community-level solar projects. The Solar Massachusetts Renewable Target (SMART) incentive requires the major utility companies in the state to pay an amount of $0.08/kWh produced for 10 years. With homeowners in the Bay State using on average 7,224kWh a year, an appropriately sized solar panel array would pay out about $578 annually.

Solar panels in Massachsetts
Massachusetts net metering laws require utilities to pay for excess energy produced by residential solar arrays.

Solar Panels in Massachusetts: Government Regulations

These financial incentives are backed by a powerful set of renewable portfolio standards (RPS). These mandates help us determine the level of support a state has for renewable energy. In Massachusetts, the legislature is pushing for 40% of all energy to come from renewable sources by 2030, and an additional 1% each year going forward. This suggests that the Bay State is pushing hard to upgrade its electricity infrastructure.

There’s even more good news for solar panels in Massachusetts in particular; the state has a solar carve out of 1,600 MW by 2020. A solar carve out means that of the renewable sources, a certain amount must come from solar energy. Currently, the Bay State produces over 19% of its energy with solar.

Because of Massachusetts’ incredible RPS, homeowners can enjoy reprieves from certain taxes. In particular, residents of the Bay State won’t see an increased property tax after installing a solar array, while still benefiting from a higher home value. Additionally, they won’t have to pay sales taxes on equipment, saving over 6% of total purchases.

Should Bay Staters Lease Solar?

Some states allow installers to lease arrays to those that can’t afford to purchase them outright. While there are still savings for those opting to go with this option, it’s not as much as it would be if they were owned. In Massachusetts, however, solar panels pay off so well that the return from a leased array would still feel good.

Another option that the Bay State offers for those on a budget is increased benefits through their SMART program. While anyone can take advantage of this program, those with a low income receive an increased rate. Where utilities typically pay out $0.08/kWh produced, the rate increases by as much as 5 cents for those needing assistance. This increases the annual payout to around $939.

Solar Panels in Massachusetts: Incentive Summary

Federal Tax Incentive30% credit
Massachusetts Tax Credits / Rebates15% credit up to $1,000 / municipal rebates
Net MeteringYes, with credits rolling over indefinitely
Renewable Portfolio Standard40% by 2030, 1% increase each year after; solar carve out of 1,600MW by 2020
Property Tax Exemption100%
Sales Tax Exemption100%
Performance Payment ProgramSMART program, $0.08/kWh and increased rate for low-income households

How to Save Money on Solar Panels in Massachusetts: Further Reading

With major benefits in every category, homeowners have good reason to consider solar panels in Massachusetts. These incentives help drop the high equipment cost that might inhibit some from installing an array. For more on how the Bay State promotes emerging technology, read the articles below.

Owning an EV in Massachusetts: Charging Cost, Incentives, and More – Just as the Bay State strongly pushes solar energy, residents can find major reasons to purchase an electric vehicle.

Top 10 Internet Providers in Massachusetts – These internet companies want to make sure you can stay connected anywhere you are in Massachusetts.

How to Save Money on Solar Panels in Florida – How does the Bay State’s incredible RPS compare to one of the sunniest states in the country?

Frequently Asked Questions

Do you actually save money going solar in Massachusetts?

In Massachusetts, homeowners can save as much as $25,000 by switching to solar energy. Additionally, the state offers incredible incentives in the form of tax credits, rebates, and performance programs to help drop the cost of an installation as well as earn money for energy produced.

How long does it take for solar panels to pay for themselves in Massachusetts?

With an annual electric bill of around $1,696.20, homeowners in Massachusetts could offset the cost of a 6kW solar panels system in about 10.2 years. While this number is slightly high, it’s relative to the size of the array, which could be slightly lower in the Bay State than in other places across the country.

How much do solar panels cost in Massachusetts?

Homeowners in Massachusetts can expect to pay about $2.87 per watt for solar energy. This equals about $17,220 for a 6kW system before incentives.

Can I use the federal tax incentive in Massachusetts?

Homeowners in Massachusetts that qualify for the federal solar tax return can receive 30% back on solar purchases in the form of a credit on federal income taxes. Those purchasing a 6kW system could cut the cost of an installation by over $5,000

What is the SMART program in Massachusetts?

The Solar Massachusetts Renewable Target (SMART) program is a performance program mandated by the state to help low-income and community solar projects cover the cost of their arrays. The incentive requires major utility companies in Massachusetts to pay a rate of $0.08/kWh produced, which equals nearly $600 annually for 10 years. This rate increases for those with low income.

To top