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Massachusetts solar tax credits & incentives in 2025
Federal Solar Investment Tax Credit (ITC)-
The federal investment tax credit (ITC) offers a 30% tax break on the entire expense of setting up a solar setup. This comprises equipment, installation work, and permit charges. As an illustration, a $20,000 system might result in a $6,000 federal tax credit. This credit applies to systems that are bought with cash or financed with loans; leases are not qualified. Any remaining credit can be moved to later tax years. Nonetheless, it is crucial to be aware that this credit will diminish over time after 2025. Homeowners should, then, strive to finalize their installations by the year’s end to get the full advantage.
Massachusetts State Incentives-
- State Income Tax Credit: Massachusetts offers a 15% state income tax credit on the net cost of a solar system, up to $1,000. This credit applies to primary residences and can be carried forward for up to three years if it exceeds your tax liability.
- Sales Tax Exemption: Solar equipment is exempt from Massachusetts’ 6.25% sales tax, reducing the upfront cost of installation.
- Property Tax Exemption: The added value of a solar system is exempt from property taxes for 20 years, ensuring that your investment doesn’t lead to higher property tax assessments.
Net Metering-
In Massachusetts, the net metering initiative enables solar owners to sell surplus electricity to the power grid and get bill credits. This can result in substantial savings, particularly when solar energy generation is high. Customers of private utilities, such as Eversource and National Grid, are eligible for the program.
Solar Massachusetts Renewable Target (SMART) Program-
SMART provides a set price for the power your solar setup produces for a decade. The amount you get paid depends on the system’s scale and where it’s located. Rates decrease over time within the program, so the sooner you sign up, the better your rate will likely be. It’s best to submit your application quickly to get the most out of the program.
Battery Storage Incentives-
ConnectedSolutions Program: Homeowners can earn $275 per kilowatt of battery capacity for participating in demand response events, where stored energy is used during peak demand periods. This helps stabilize the grid and offers financial incentives.
Mass Save HEAT Loan: Offers 0% interest loans up to $25,000 for solar battery installations, provided the battery is enrolled in the ConnectedSolutions program.
Local Rebates-
Various municipalities offer additional rebates for solar installations:
- Concord: $625 per kilowatt, up to $3,125.
- Hudson Light & Power: $1.20 per watt, up to $7,500.
- Taunton: $1.50 per watt, up to $4,500.
These rebates can significantly reduce the cost of installation and vary by location, so it’s beneficial to check with your local utility provider.
Tips for Maximizing Incentives-
Tips for Maximizing Incentives-
Act Quickly: Given the impending phase-out of the federal ITC, completing your solar installation by the end of 2025 is crucial to secure the full 30% credit.
Consult Professionals: Work with a MassCEC-certified installer to navigate the application processes for SMART and other programs.
Explore Financing Options: Utilize available loans and rebates to make solar more affordable.
Conclusion-
In 2025, Massachusetts boasts an attractive array of solar tax credits and incentives, making solar energy more accessible and financially advantageous. Between the significant federal Investment Tax Credit, state income tax credits, property tax breaks, net metering advantages, and local rebates, you can greatly reduce your initial expenses and boost long-term financial gains. Because the federal ITC is slated to expire soon, taking action quickly is vital to get the most out of these benefits. By choosing solar now, residents will save money while supporting a cleaner, more eco-friendly Massachusetts—building a sustainable future.