Do you own a property in Massachusetts and want to get solar panels installed on it, but are worried about huge expenses? If so, you should know that several financial incentives are currently available in the state, making 2023 the right year for you to go solar.
Like most other states today, Massachusetts encourages its residents to switch to solar, being one of the easily accessible renewable energy resources. Massachusetts makes this possible by offering solar incentives and rebates that include tax credits, loan programs, and exemptions.
Federal Solar Tax Credit
The Federal Solar Tax Credit is one of the biggest solar incentives available in 2023. This income tax credit (ITC) entitles property owners to a 30 percent reduction in the cost of a solar panel system. For instance, purchasing and installing a qualifying solar power system worth $20,000 will give you $6,000 back as a credit on your federal income taxes.
Residential Renewable Energy Income Tax Credit
In addition to the ITC, you can benefit from a tax credit at the state level too – the Residential Renewable Energy Income Tax Credit. This financial incentive offers a credit of 15 percent on the net costs of your solar panel system.
The amount is capped at a maximum of $1,000 which you will receive against your state income tax. Since this incentive is applied on top of the federal tax credit, it spells huge savings for a solar installation on your Massachusetts residence.
Solar Massachusetts Renewable Target Program
Residents of the state can also take advantage of the Solar Massachusetts Renewable Target (SMART) Program, which is a production-based financial incentive. According to the program, the major utility services Eversource, National Grid, and Unitil directly pay solar system owners a fixed rate for per kilowatt-hour (kWh) of solar power sent to the grid. This rate depends on your utility company and location, and you can participate in the program for ten years.
However, the base rate may reduce, as the “blocks” on the incentive program keep getting filled and the state’s aggressive Renewable Portfolio Standard (RPS) target of 35 percent by 2030 is achieved. That’s why it is best to apply for the program at the earliest and enjoy high incentives.
Net Metering in Massachusetts
Massachusetts is among the states in the country that offer net metering for solar customers. With this arrangement, you can earn solar renewable energy credits on your utility bill against any extra power produced by your solar panels.
The exact credit value will depend on factors, such as the size of your system and your location. But the benefits largely remain the same – you can claim the credit against the excess, unused energy generated on sunny days by your solar panels, and use it to pay your electricity bill during cloudy months when less power is produced.
Massachusetts also has excellent interconnection standards, which refer to the requirements concerned when connecting a solar energy system to the grid. The state has done away with fragmented guidelines and laid out standard interconnection guidelines for utility companies to comply with.
This makes it less complicated for solar customers to plug into the grid and send power to utilities via net metering. Local solar companies will be able to give you the details of the requirements that need to be met.
MA Property Tax Exemption
In addition to the federal and state financial tax credits, you can also enjoy exemptions on property tax when you get a solar installation on your Massachusetts property. The Renewable Energy Property Tax Exemption gives you a 100 percent exemption on property tax for a period of 20 years.
MA Renewable Energy Equipment Sales Tax Exemption
Typically, the value of a home or commercial property goes up with a solar energy system installation. This means that you will be charged added taxes on the building. But thanks to this exemption, you stand to save a considerable amount, in addition to increasing your home’s resale value. Moreover, you will save significantly on utility bills over the years as you use solar energy instead of regular electricity.
When you purchase a solar energy system in Massachusetts, you receive an exemption from additional sales tax, due to the state’s Renewable Energy Equipment Sales Tax Exemption. Applicable on residential installations, this incentive provides homeowners a 100 percent exemption on solar photovoltaics, solar water heating, and more.
If you want to cash in on the generous incentives available for solar installations in Massachusetts, 2020 is just the time for it. Talk to a solar installation company near you to learn more about the specific rebates and incentives available in your area and how you can apply for them to save money.