The solar incenvice in Massachusetts 2025

Updated Apr 05, 2025

  • You'll pay an average of $12,567 to install a 5 kilowatt solar panel system in Massachusetts, before incentives.

  • The federal investment tax credit (ITC) lowers that price by 30% of all your solar equipment and installation costs.

What solar incentives are available in Massachusetts?

As a homeowner in Massachusetts, you have access to several different tax incentives that make solar panels more affordable. Solar incentives are available at both the federal and state levels to help you save thousands on your investment in solar energy.

Solar Calculator is here to help you take the next step in your transition to renewable energy. Below, we’ll discuss some of the different ways you can make solar more affordable.

Federal solar incentives

As part of the Inflation Reduction Act of 2022, congress passed several clean energy provisions to reduce energy costs. Among those provisions was an extension and upgrade of the Federal Investment Tax Credit (ITC).

Federal Investment Tax Credit

The Federal ITC allows you to claim 30% of your total equipment and installation costs on your federal taxes. There is no minimum or maximum amount you can claim and it includes equipment, installation, permitting, and even battery storage.

The ITC will remain at 30% until December 31, 2032. After that it will be reduced to 26% until December 31, 2033, then to 22% the following year. The ITC is currently set to disappear in 2035 unless it is renewed.

Who is eligible for the Federal ITC?

Most homeowners will qualify for the Federal ITC, but not all. You must meet the following criteria to claim your 30% tax credit:

  • Your solar system must have been installed between January 1, 2017 and December 31, 2034.
  • You must own the property on which the system was installed. That means no leased properties such as apartments or townhomes.
  • The property must be located within the U.S
  • You must own the entire solar system. Equipment acquired through a lease or Power Purchase Agree (PPA) is not eligible.
  • The equipment must be purchased new. Used equipment is not eligible.
  • The Federal ITC will also cover the following expenses:

  • Solar panels and cells
  • Wiring, inverters, and mounting equipment
  • Cost of labor
  • Energy storage devices
  • Sales tax
  • Homeowners save around $10,000 on average with the Federal ITC. But that number can be higher or lower depending on your total expenses.

    How to claim the Federal ITC

    Claiming your Federal ITC couldn’t be easier. All you have to do is fill out IRS form 5695 and submit it with your tax return. You can consult with a tax professional for more assistance.

    Local solar incentives

    Who’s eligible : Investor-Owned Utility, Retail Supplier

    How to apply : Massachusetts' 1997 electric-utility restructuring legislation created the framework for a renewable portfolio standard (RPS). In April 2002, the Massachusetts Department of Energy Resources (DOER) adopted RPS regulations. The RPS was significantly expanded by legislation enacted in July 2008 (Green Communities Act, S.B. 2768), which established two separate renewable standards -- a standard for “Class I” renewables, and a standard for “Class II” renewables -- as well as an Alternative Energy Portfolio Standard. Class I Requirements (New Resources) Under the Class I Renewable Portfolio Standard, all retail electricity suppliers must provide a minimum percentage of kilowatt-hour (kWh) sales to end-use customers in Massachusetts from eligible renewable energy resources installed after December 31, 1997, according to the following schedule: 1.0% of sales by 12/31/2003 1.5% of sales by 12/31/2004 2.0% of sales by 12/31/2005 2.5% of sales by 12/31/2006 3.0% of sales by 12/31/2007 3.5% of sales by 12/31/2008 4.0% of sales by 12/31/2009 5.0% of sales by 12/31/2010 6.0% of sales by 12/31/2011 7.0% of sales by 12/31/2012 8.0% of sales by 12/31/2013 9.0% of sales by 12/31/2014 10.0% of sales by 12/31/2015 11.0% of sales by 12/31/2016 12.0% of sales by 12/31/2017 13.0% of sales by 12/31/2018 14.0% of sales by 12/31/2019 16.0% of sales by 12/31/2020 18.0% of sales by 12/31/2021 20.0% of sales by 12/31/2022 22.0% of sales by 12/31/2023 24.0% of sales by 12/31/2024 27.0% of sales by 12/31/2025 30.0% of sales by 12/31/2026 33.0% of sales by 12/31/2027 36.0% of sales by 12/31/2028 39.0% of sales by 12/31/2029 40.0% of sales by 12/31/2030, and an additional 1% of sales each year thereafter, with no stated expiration date Eligible Class I resources include solar photovoltaics (PV); solar thermal electric energy; wind energy; ocean thermal, wave, or tidal energy; fuel cells utilizing renewable fuels; landfill gas; energy generated by certain new hydroelectric facilities, or certain incremental new energy from increased capacity or efficiency improvements at existing hydroelectric facilities; low-emission advanced biomass power conversion technologies using fuels such as wood, by-products or waste from agricultural crops, food or vegetative material, energy crops, algae, biogas, or liquid biofuels; marine or hydrokinetic energy; and geothermal energy. Solar Carve-Out and Solar Carve-Out II Starting in 2010, retail suppliers were directed to provide a portion of the required renewable energy under the Class I Standard from qualified in-state, interconnected solar facilities. The original Solar Carve-Out requirement was 400 MW. Applications for facilities seeking qualification under the Solar Carve-Out stopped being accepted in April 2014 when the Solar Carve-Out II Program came into effect. The Solar Carve-Out II required 1,600 MW of solar by 2020. Qualifying solar facilities (officially known as “Solar Carve-Out II Renewable Generation Units” in the regulations) are set at 6 MW (direct current DC) or less and must have become operational after December 31, 2012. Solar Carve-Out facilities cannot also qualify as Solar Carve-Out II facilities. The Solar Carve-Out and Solar Carve-Out II Minimum Standards for the corresponding compliance year can be found here. The Solar Minimum Standard is calculated by dividing the annual solar compliance obligation in megawatt-hours (MWh) by the total RPS load obligation from the previous two years. The solar compliance obligation in turn is based on the difference in the Solar Renewable Energy Certificates (SRECs) generated during the past two years (see the DOER regulations for calculations and additional guidance). The SREC II program was succeeded by the Solar Massachusetts Renewable Target (SMART) program, which is not an SREC program or tied to the state's RPS; and has a participation capacity of 3,200 MW. The SMART program officially launched on November 26, 2018, marking the last day that solar generation units in Massachusetts were able to qualify for the SREC II Program. Class II Requirements (Existing Resources) The Class II RPS requires all retail electricity suppliers to provide annually a percentage of kWh sales to end-use customers in Massachusetts from Class II renewables, starting in 2009. Eligible Class II renewables include systems operating before January 1, 1998, that generate electricity using solar PV; solar thermal electric energy; wind energy; ocean thermal, wave or tidal energy; fuel cells utilizing renewable fuels; landfill gas; energy generated by certain existing hydroelectric facilities up to 7.5 megawatts (MW) in capacity; low-emission advanced biomass power conversion technologies using fuels such as wood, by-products or waste from agricultural crops, food or vegetative waste, energy crops, biogas, or liquid biofuels; marine or hydrokinetic energy; or geothermal energy. The Minimum Standards for 2024, 2025, and 2026 are 3.6%, 3.4137%, and 3.57%, respectively. The calculation is based on a formula established in regulation, and future Class II updates can be found here. Class II Waste Energy Requirements In addition, there is a separate Class II Waste Energy Minimum Standard that requires all retail electricity suppliers to provide an annual percentage of kWh sales to end-use customers in Massachusetts from waste energy (defined as the electrical energy created from the combustion of municipal solid waste) starting in 2009. The standard for compliance years 2021 through 2025 is equal to 3.7% of electrical energy sales and will equal 3.5% starting in 2026. Eligible waste energy generation units must have and maintain a state-approved recycling program, must comply with the Massachusetts Department of Environmental Protection’s air pollution and solid waste management regulations, and must allocate at least 50% of any revenue received from the sale of renewable energy certificates (RECs) generated to its recycling programs. Beginning in 2025 and every five years thereafter, the DOER shall conduct a review of the RPS Class II Waste Energy Minimum Standard. The DOER may modify the Minimum Standard for the following five years. Offshore Wind Target The Legislature authorized the procurement of up to 5.6 GW of offshore wind energy by 2027. Compliance Retail electricity suppliers demonstrate compliance by submitting, in an annual compliance filing to the DOER, documentation that Class I RECs, Solar Carve-Out Renewable Energy Certificates (SRECs), Solar Carve-Out II Renewable Energy Certificates (SREC IIs), Class II RECs, and Class II Waste Energy Certificates have been secured. These certificates represent the environmental attributes of one megawatt-hour (MWh) of generation from an eligible facility under each class category. RECs generated in one year may be banked and used for compliance in either or both of the two subsequent years. In order to facilitate robust SREC I and SREC II markets that not only respond to market conditions but also provide price support, the DOER created the Solar Credit Clearinghouse, which exists under each program. Eligible facilities that generate solar renewable energy certificates (SRECs) can continue to do so until 2023, after which the facilities will generate Class I RECs. Eligible facilities that generate SREC IIs will do so for a 40-quarter period from the time they were qualified, after which they generate Class I RECs. System owners that wish to expand their original SREC system should consider applying to the RPS Class I program or the SMART program (eligibility varies). The respective renewable energy certificates (RECs) are issued by the New England Power Pool Generation Information System (NEPOOL-GIS) and are technically called GIS Certificates. Alternative Compliance Payments Retail suppliers may pay the alternative compliance payment (ACP) if they are unable to procure enough renewable energy attributes, however, the ACP rates are designed to be higher than the market price of RECs, SRECs, and SREC IIs. The DOER determined the initial ACP rate for each resource category. The ACP rates for Class I, Class II, and Class II Waste Energy increase (or decrease) annually based on the Consumer Price Index of the previous year. The Solar Carve-Out and Solar Carve-Out II ACP rates decrease annually per 10-year schedules. The base year ACP rates and current ACP rates can be found on the DOER's website. Massachusetts RPS compliance reports are available on the DOER website.

    Can you claim multiple tax incentives in Massachusetts?

    Yes. You are allowed to claim multiple solar incentives for the same installation. However, you can only claim each incentive once. For more guidance on how to claim your solar tax incentives, talk to your installer or consult with a licensed tax professional before submitting your tax forms.

    Does Massachusetts offer tax exemptions?

    Renewables Portfolio Standard

    Category : Regulatory Policy

    Website : http://www.mass.gov/energy/rps

    Applicable Sectors : Investor-Owned Utility, Retail Supplier

    Incentive Amount :

    Implementing Sector : State

    Building Energy Code

    Category : Regulatory Policy

    Website : https://www.bostonplans.org/planning-zoning/planning-initiatives/article-37-green-building-guidelines

    Applicable Sectors : Commercial, Industrial, Local Government, Nonprofit, Residential, Schools, Agricultural, Multifamily Residential

    Incentive Amount :

    Implementing Sector : Local

    Performance-Based Incentive

    Category : Financial Incentive

    Website : http://masmartsolar.com/

    Applicable Sectors : Commercial, Industrial, Local Government, Nonprofit, Residential, Schools, State Government, Federal Government, Agricultural, Multifamily Residential, Low Income Residential, Institutional

    Incentive Amount : (Base compensation rate + compensation rate adders - greenfield subtractor) * total kWh generated - value of energy generated

    Implementing Sector : State

    Energy Standards for Public Buildings

    Category : Regulatory Policy

    Website : https://www.mass.gov/info-details/lbe-priorities-and-efforts-high-performance-efficient-buildings#massachusetts-leed-plus-2.0-standard-for-new-construction-

    Applicable Sectors : Local Government, Schools, State Government, Institutional

    Incentive Amount :

    Implementing Sector : State

    Grant Program

    Category : Financial Incentive

    Website : https://www.masscec.com/program/accelerating-clean-transportation-act-school-bus-fleet-deployment

    Applicable Sectors : Schools

    Incentive Amount :

    Implementing Sector : State

    Offshore Wind Energy Target

    Category : Regulatory Policy

    Website : https://www.mass.gov/info-details/offshore-wind

    Applicable Sectors : Investor-Owned Utility

    Incentive Amount :

    Implementing Sector : State

    Rebate Program

    Category : Financial Incentive

    Website : https://wmgld.com/energy-programs/solar-rebate-program/

    Applicable Sectors : Commercial, Residential

    Incentive Amount : $0.80/Watt

    Implementing Sector : Utility

    Loan Program

    Category : Financial Incentive

    Website : https://hged.com/commercial/ee-business/cecp/default.aspx

    Applicable Sectors : Commercial, Industrial, Federal Government, Multifamily Residential

    Incentive Amount :

    Implementing Sector : Utility

    Sales Tax Incentive

    Category : Financial Incentive

    Website : http://www.mass.gov/dor/individuals/taxpayer-help-and-resources/tax-guides/salesuse-tax-guide.html

    Applicable Sectors : Residential

    Incentive Amount : 100% exemption

    Implementing Sector : State

    Property Tax Incentive

    Category : Financial Incentive

    Website : http://www.mass.gov/dor/local-officials/

    Applicable Sectors : Commercial, Industrial, Residential, Agricultural

    Incentive Amount : 100% exemption for 20 years

    Implementing Sector : State

    Net Metering

    Category : Regulatory Policy

    Website : https://www.mass.gov/net-metering

    Applicable Sectors : Commercial, Industrial, Local Government, Nonprofit, Residential, Schools, State Government, Federal Government, Agricultural, Institutional

    Incentive Amount :

    Implementing Sector : State

    Personal Tax Credit

    Category : Financial Incentive

    Website : https://www.mass.gov/regulations/830-CMR-6261-residential-energy-credit#-4-claiming-the-credit-

    Applicable Sectors : Residential

    Incentive Amount : 0.15

    Implementing Sector : State

    Corporate Tax Exemption

    Category : Financial Incentive

    Website : http://www.mass.gov/dor/businesses/current-tax-info/guide-to-corporate-excise-tax/deductions.html#solar

    Applicable Sectors : Commercial, Industrial

    Incentive Amount : 100% of the tangible property portion of the excise tax

    Implementing Sector : State

    Corporate Tax Deduction

    Category : Financial Incentive

    Website : https://www.mass.gov/business-taxes

    Applicable Sectors : Commercial, Industrial

    Incentive Amount : 1

    Implementing Sector : State

    Public Benefits Fund

    Category : Regulatory Policy

    Website : https://ma-eeac.org/

    Applicable Sectors : Commercial, Industrial, Investor-Owned Utility, Nonprofit, Municipal Utilities, Residential, Cooperative Utilities, Schools, Agricultural, Institutional

    Incentive Amount :

    Implementing Sector : State

    PACE Financing

    Category : Financial Incentive

    Website :

    Applicable Sectors : Commercial, Industrial, Residential

    Incentive Amount :

    Implementing Sector : State

    Interconnection

    Category : Regulatory Policy

    Website : https://www.mass.gov/info-details/utility-interconnection-in-massachusetts

    Applicable Sectors : Commercial, Industrial, Local Government, Nonprofit, Residential, Schools, State Government, Federal Government, Agricultural, Multifamily Residential

    Incentive Amount :

    Implementing Sector : State

    Community Solar Rules

    Category : Regulatory Policy

    Website : https://www.mass.gov/info-details/solar-massachusetts-renewable-target-smart-program

    Applicable Sectors : Commercial, Local Government, Nonprofit, Residential, Schools, Multifamily Residential, Low Income Residential, Institutional

    Incentive Amount :

    Implementing Sector : State

    Generation Disclosure

    Category : Regulatory Policy

    Website : https://www.mass.gov/info-details/information-disclosure-label

    Applicable Sectors : Investor-Owned Utility, Municipal Utilities, Cooperative Utilities

    Incentive Amount :

    Implementing Sector : State

    Other Policy

    Category : Regulatory Policy

    Website : https://www.mass.gov/alternative-energy-portfolio-standard

    Applicable Sectors : Investor-Owned Utility, Retail Supplier

    Incentive Amount :

    Implementing Sector : State

    Energy Storage Target

    Category : Regulatory Policy

    Website : https://www.mass.gov/energy-storage-initiative

    Applicable Sectors : Investor-Owned Utility

    Incentive Amount :

    Implementing Sector : State

    Solar/Wind Access Policy

    Category : Regulatory Policy

    Website :

    Applicable Sectors : Commercial, Industrial, Local Government, Nonprofit, Residential, Schools, State Government, Federal Government

    Incentive Amount :

    Implementing Sector : State

    Solar/Wind Permitting Standards

    Category : Regulatory Policy

    Website : https://www.mass.gov/guides/becoming-a-designated-green-community#-green-communities-division-overview-

    Applicable Sectors : Commercial, Industrial, Local Government, Nonprofit, Residential, Schools, State Government, Federal Government, Agricultural, Institutional

    Incentive Amount :

    Implementing Sector : State

    Energy Efficiency Resource Standard

    Category : Regulatory Policy

    Website : http://ma-eeac.org/

    Applicable Sectors : Investor-Owned Utility, Municipal Utilities, Cooperative Utilities

    Incentive Amount :

    Implementing Sector : State

    Green Power Purchasing

    Category : Regulatory Policy

    Website : https://www.mass.gov/doc/interim-clean-energy-and-climate-plan-for-2030-december-30-2020/download

    Applicable Sectors : State Government

    Incentive Amount :

    Implementing Sector : State

    Appliance/Equipment Efficiency Standards

    Category : Regulatory Policy

    Website : https://appliance-standards.org/document/massachusetts-reduce-utility-bills-and-carbon-emissions-efficiency-standards

    Applicable Sectors :

    Incentive Amount :

    Implementing Sector : State

    What is the best way to pay for solar?

    Cash payments

    Paying cash upfront is easily the simplest and most cost-effective route — if you can afford it. It lets you maximize your total savings by avoiding interest rates and other fees. You also don’t have to worry about making monthly payments. But the downside is you have to spend a lot of cash at once which isn’t an option for everyone.

    Pros
  • No interest payments makes this less expensive in the long term
  • It provides a higher return on your investment
  • You hit your break even point faster
  • You are eligible for tax incentives
  • Cons
  • It requires a large initial investment
  • There is an opportunity cost if you decide to wait and save
  • You may become cash poor
  • Financing

    Financing solar panels is probably the most common payment method. You get to own the system — as opposed to leasing — but you don’t have to spend all your cash at once. And although you do have to pay interest, you can secure a fairly low interest rate as long you have good credit.

    Pros
  • It doesn’t require a large lump sum
  • You can space your payments out over time
  • You are eligible for tax incentives
  • Cons
  • It costs more over time
  • Interest rates may be high
  • You need good credit
  • The payback period is longer
  • It takes longer to break even
  • Solar leases and PPA agreements

    If purchasing solar equipment isn’t an option for you, a lease or a PPA may be worth exploring. This is where you are essentially “renting” the equipment for a fixed rate each month. And although you don’t have ownership of your system, there are other benefits such as maintenance and servicing agreements.

    Pros
  • There is no upfront cost
  • You are not responsible for maintenance
  • Contract terms are flexible
  • Cons
  • You do not own your solar system
  • You will not be eligible for tax credits or exemptions
  • It is a long term commitment
  • You save less than if you own the system
  • Rates may increase
  • Going solar doesn’t have to break the bank

    Going solar is becoming more affordable than ever. And thanks to a variety of solar incentives in Massachusetts, you can save thousands more on your investment.

    Want to get an idea for what it will cost you to go solar? You can use our solar cost calculator to generate a customized estimate instantly. We take into consideration a wide range of criteria including location, electric bill, roof size, and other factors. Try it out today and start planning for your future.