Quabbin Reservoir, Enfield Massachusetts
Welcome to the Massachusetts solar incentive and rebate information page!
We recommend starting here and reading up about what’s going on in the state as a whole, then exploring further into our local resources in Boston. If you’re lucky enough to live in Boston proper, you’ll be glad you dug deeper, as there are excellent local solar programs to take advantage of.
If you have any questions, our network of solar experts are on call to assist you! Simply sign up for personalized help. You can get discounted pricing as low as $5,000/kW! This is paired with the very strong Massachusetts solar incentives below.
2012 Massachusetts Solar Power Update
Thoughts of Massachusetts commonly evoke images of pilgrims, the Red Sox, some premium universities, Matt Damon and maybe some “Wicked chowda.” More recently though, thoughts of solar power in the Commonwealth are blossoming.
Thanks to the Green Communities Act of 2007, Massachusetts residents and businesses have been encouraged to invest in energy-saving technologies and reduce energy consumption through a number of generous solar power rebates. The bill has widespread support from government officials, the business community, and environmental groups.
While there may have been some past missteps, Massachusetts is truly allocating its resources well to achieve a greater degree of energy independence.
The sheer quality of solar incentive programs, tax credits, exemptions and loans earn the state a Solar Legislator Score of “Excellent”! You rock, Massachusetts!
OH YEAH? WHY DOES MASSACHUSETTS ROCK FOR SOLAR?
There are more than 2,000 solar power installations in Massachusetts comprising 22 Megawatts of electricity produced in the state. That’s a lot of power! The main reason why solar has taken off here has been the Commonwealth Solar Rebate Program.
These rebates for PV (PV is short for photovoltaics, the geeky way to talk about solar electricity panels) provided a quick and easy way to cut into the upfront cost of going solar. Many homeowners simply didn’t have tens of thousands of dollars laying around so they could install an awesome solar system.
The solar power rebate program started in 2007 with a $68 million budget with a goal of reaching 27 MW of installed solar by 2010. And boy, did that program ever work out. In just 2 years, the $68 million budget was completely exhausted, as many residents filed for free money from the state to go solar. The solar panel rebate still is out there, but the 5th block of money available has closed as of 3/25/11. Expect a 6th block to be released in April, 2011.
Legislators did not want to stop just short of their 27 MW goal, and instead aimed even higher with their state renewable portfolio standard.
A STATE RENEWABLE PORTFOLIO WHAT?!
A renewable energy portfolio standard. It’s a mandate from Boston which says utilities within the state have to source at least a certain amount of their power from renewable sources – like from the solar panels on your rooftop. What’s more, they set a specific target of 400 MW of solar electricity to be generated by 2020!
So, now there’s 22 MW installed right? 9 more years to go until that due date, a limited budget at the moment, how in the world are they gonna get to that level of solar energy adoption in 9 years?
MASSACHUSETTS SRECS – SOLAR RENEWABLE ENERGY CREDITS
The answer is a creative solar incentive funding mechanism called a “solar renewable energy credit” or SREC.
If you have a typical 5kw sized solar system on your Massachusetts roof, you’ll generate roughly 5 SRECs per year for the renewable electricity you produce. Now, if the utility companies do not hit their targets for solar electricity generation in a certain year, they now have to pay a fee of $600 per SREC for which they were short. That money goes straight to Boston.
Therefore, many utility companies would rather pay you, the homeowner with solar panels on your roof less than this fee for your SRECs.
For SREC market stability, the Massachusetts Department of Energy Resources (DOER) has also set a floor price for which utilities may purchase SRECs from you, the homeowner. That’s set at $285 (this includes a 5% handling fee).
Utility companies have yearly goals they have to meet for solar electric production, so they’re quite motivated to buy up SRECs from anywhere they can get them less than that $600 fee. In February 2011, SREC values on the open market were around $520. Check out the graph below:
SRECs are guaranteed payments from the utility companies to you for at least 10 years. So, if you’re cranking out say 5 of them each year and you are able to sell them for an average of $400 a pop over that timeframe, that’s about $2000 a year for 10 years – or $20,000! Nothing to sneeze at, and that’s why the state is confident it’s gonna hit its target of 400 MW by 2020.
To get more information about how this all works, we strongly recommend connecting with our network of experts at One Block off the Grid who can help get you a customized quote, get you a group discount, and also even arrange financing of your system for you. Just fill out the form at the bottom of this page and we’ll be in touch to get you all the information you’re curious about and we can get you hooked up with a free home evaluation as well.
Aside from rebates and SRECs, net metering helps makes solar affordable too.What’s net metering? Why, it’s the policy that lets you store your extra solar energy with the utility, and they then credit your bill at night when your using energy, but the sun isn’t shining any more. So, no batteries needed.
For Massachusetts residents under “Class 1” residential net metering rules for solar, any extra energy your solar panels produce is credited to your bill. However, different utilities have different programs. Some will credit you 1 for 1. That is, you store 1 kWh of solar power, and you get to use that 1 kWh later at night or later in the year, even. Others utilities are less generous and will only give you credit for less than what you put in, say .9 kWh for the 1kWh. When you get a quote from an installer at the bottom of this page, ask them to explain your local net metering program. This will factor into your payback time.
The other issue here is that the program is limited to 1% of the utility’s capacity. Right now, solar isn’t generating anywhere near that number, but as people start to take advantage of the solar power rebate money below, some residents will not be able to use net metering unless the capacity cap is raised.
MASSACHUSETTS SOLAR REBATES AND SOLAR TAX INCENTIVES
The Database of State Incentives for Renewables & Efficiency (DSIRE) contains a long list of incentive and solar power rebate programs that encourage energy efficiency and alternative energies in Massachusetts. We’re going to focus on the residential programs, but there’s plenty to offer for corporations. See DSIRE’s list of corporate tax deductions, rebate money, and other incentives for businesses.
Personal Tax Credit
You can get a 15% state tax credit off your solar system, but only up to a maximum of $1000. For most people, count on $1000 to use towards your state income tax bill.
Property and Sales Tax Exemption: Yes
This means when the property tax man or woman cometh to assess your new solar home, they can’t assess you another dime for 20 years. Even after 20 years, the assessed value of the solar panels will probably have depreciated to next to nothing; so essentially, your solar panels won’t increase your property taxes.
In addition, you don’t pay sales tax on your system, so the installed price is the installed price.
Massachusetts Solar Power Rebate Program
The Commonwealth Solar Rebate Program is a state wide solar rebate program for Massachusetts. That’s the good news. The bad news is that it’s a little complicated. How much of a solar rebate you’ll get will depend on:
- Your income
- Your home value
- Whether or not the solar panels are manufactured in Massachusetts.
- Also, it should be noted, that the maximum rebate is $20,000, no matter how poor you are.
- Also, your system size is not limited, but if you need more than a 5kW system, (which is average); the state won’t pay anything above the 5kW calculation.
As of now for going solar, you’ll receive:
- $750/kW regardless of your income or home value. (Base Incentive)
- An additional $850/kW if your household income is less than or equal to 120% of median income OR if your home value is “moderate” ($300,000 – $400,00 depending on your county).
- An additional $100/kW if your solar panels or inverter are produced in Massachusetts.
- You’ll also get the 30% Federal Solar Tax Credit, regardless of income or home size.
Now, you’re probably confused. What you really want to know is: “Bottom line, how much?” Let’s work through just the rough estimated price and payback of a 5kW system assuming you don’t qualify for the moderate home value or income requirements, and you don’t buy your panels or inverter from Massachusetts.
EXAMPLE OF A 5kW MASSACHUSETTS RESIDENTIAL SOLAR INSTALLATION, BOSTON AREA
This example is based on an installed solar system for a 5kW (5000 watt) system in the Boston, Massachusetts area with ideal home and solar conditions. That 5kW should cover about $75/mo of your electric bill.
We’re also assuming that the cost is $5.30/watt installed which we can get for you when you sign up to be part of a group purchase campaign (that’s about 15% below going market rate as of March 2011) but that may or may not include extra add-on’s for your home.
Check out the rundown in the image below, click it to enlarge:
- Net cost after year 1:
- Pre-Rebate cost: $5.30/watt *5,000 watts = $26,500 (Don’t Panic!)
- State Solar Power Rebate: $750/kw * 5kw = $3,750, so now we’re at $22,750 out of pocket.
Even if that sounds like a lot of cash, there’s financing and leasing available! (Keep in mind if you have a moderately valued home or income at or below 120% of median income you’ll be able to deduct an additional $4,250!)
- 30% Federal solar tax credit: Subtract $6,825, now we’re at $15,925 (a little better)
- SREC payments for the first year (remember you get them guaranteed for 10 years, not just this year!): Subtract $2000 for your first year of payments, now we’re at $13,925.
- Massachusetts State tax credit: Subtract $1,000, now we’re down to $12,925
- Last but certainly not least, don’t forget about your yearly electric savings! $75/mo * 12mo = $900, now we’re down to $12,025
With the electric savings and associated SREC payments, as 5kW system will pay for itself in less than 6 years! ($2,000 a year in SREC payments for 6 years is already $12,000 and doesn’t include your electricity savings!) Again, the best way to verify the numbers in your own situation is to get yourself a quote further down on this page. Our friendly experts will show you how it all works.
Also, you should know:
- Nasty CO2 Emissions Saving the planet: 9618lbs/year, or like not driving 11,500 miles a year or planting 18 square feet of trees. Thank you.
- Also, remember: If your main solar equipment is manufactured in Mass, you get a little bonus of $0.15/watt. For a 5kW system, subtract another $750.
Residents and businesses of Massachusetts and the rest of the New England states are burdened with the highest electrical rates in the country. This has obviously provided an important reason to look for effective energy alternatives. Fortunately, solar power has received a good bit of legislative attention (and incentives), and Massachusetts’ leadership is encouraged to keep it in focus as they move forward.