What Can You Save?
Understanding solar incentives in Massachusetts can dramatically reduce your installation and operational costs. Bay State homeowners can access various state and federal programs designed to make solar energy more affordable. This guide provides a detailed breakdown of these incentives, helping you navigate the financial benefits of solar power.
Massachusetts Solar Incentives
Fortunately, Massachusetts encourages residential solar adoption through the Residential Energy Credit. Homeowners can claim $1,000 on their state income taxes for solar energy systems installed on their primary residence. This straightforward incentive is designed to reduce your initial investment cost directly. To capture this credit, you must fill out Schedule EC (Energy Credit) of your state tax return and attach receipts and proof of installation.
Sales & Property Tax Exemptions
Massachusetts offers additional financial relief through two tax exemption programs:
- Solar Sales Tax Exemption: This exemption removes the state’s 6.25% sales tax on the purchase of residential solar systems, effectively reducing the overall cost of the system.
- Solar Property Tax Exemption: For the first 20 years following your solar installation, any increase in property value due to the solar system will not affect your property taxes, ensuring long-term savings. To benefit from this exemption, homeowners must submit Form 96-5 to their local assessor’s office within three months of system installation.
Net Metering
Net metering is a beneficial policy for solar energy systems in Massachusetts. This system allows you to earn credits for excess electricity your system produces and sends back to the grid. These credits offset the cost of electricity you draw from the grid, potentially reducing your utility bills to zero.
Federal Incentives
The federal government offers significant incentives under the Inflation Reduction Act of 2022. Homeowners installing solar panels can claim a 30% tax credit on the installation costs. For example, a $30,000 solar installation would yield a $9,000 credit on your federal tax bill, significantly lowering the barrier to solar adoption. You must complete IRS Form 5695 (Residential Energy Credits) and submit it with your federal tax return to claim this credit. See our deep dive on this incentive here.
We’re Here to Help Homeowners in Massachusetts
Navigating solar incentives doesn’t have to be complex. As a dedicated solar company based in New Bedford, we provide you with all the necessary documentation to maximize these benefits. Look out for our upcoming article on incentives for related upgrades, such as heat pumps, battery storage, EV charging installations, and improved insulation. Want to learn more? Call us today at 508-203-6966.
