Rebates, Tax Credits, and Other Incentives for Installing Solar Energy Systems
Last updated December 2021
Here are the tax credits and other incentives we could identify in December 2021 for the Boston area. Keep in mind that at that time Congress was considering legislation that would improve the federal tax credit for residential solar projects. Check with your utility company and dsireusa.org for up-to-date info.
Note that if you lease, rather than buy, incentives usually go to the leasing company that installs and owns the panels on your roof, not you.
Federal tax credit: Uncle Sam will reimburse you 26 percent of what you paid for panels, equipment, storage devices, installation, and permits. The current credit is in place through 2022; in 2023, the credit is scheduled to decline to 22 percent, and then in 2024 it disappears for residential solar projects, if the program isn’t renewed.
State tax credit: You can get back 15 percent of what you paid for a system, up to $1,000. To calculate system price tags, the state uses total costs minus the 26 percent federal tax credit.
Net metering: If your system produces electricity that you don’t use, it’s pushed onto the grid, your meter spins in reverse and your utility pays you for it at a price slightly less than the full retail rate you pay. These credits don’t expire and roll forward to the next month. But if you’re on a time-of-use rate plan, you get charged higher rates when you buy during peak times but solar-energy producers often get paid lower non-peak rates when they sell.
Solar Massachusetts Renewable Target (SMART) Program: Investor-owned electric utilities in Massachusetts (Eversource Energy and National Grid in the Boston area) pay new solar electric system owners incentives based on the amount of energy they generate each month over 10 years. Eversource said its residential customers in the Boston area who enroll in SMART can expect an incentive rate of about $0.07 per kWh of solar production. Higher incentive rates are available for customers on residential assistance rates or with battery storage.
Rebates: Massachusetts and electric utilities owned by Bay State municipalities offered their own rebates through a program begun in 2019. But funding has run out—they stopped accepting new applications in June 2021. However, as of December 2021 a handful of Boston-area municipal utilities—Concord Municipal Light Plant, Hingham Municipal Lighting Plant, Ipswich Municipal Light, Taunton Municipal Lighting Plant, Wakefield Municipal Gas & Light—were still offering incentives capped at $3,000 to $6,000, depending on the utility, and the Reading Municipal Light Department promised an updated rebate plan was in the works.
Property tax exemption: Any increase in your home’s value as a result of installing solar panels is exempt from property taxes.
State sales tax exemption: You won’t pay sales tax on your system.