Go Solar in Massachusetts!
Massachusetts has the nation’s 19th best Renewable Portfolio Standard. An RPS law is the way state legislatures mandate that a certain percentage of energy production comes from renewable sources by a date they determine. Utilities meet that standard by generating their own energy from renewable sources or buying it from customers. And if they fail to meet the standard, they are penalized by having to pay high fees until they comply. Utilities offer rebates and other incentives to their solar customers because that is a cheaper option than paying the fees for not meeting the standard. The Massachusetts RPS Law requires its power companies to generate 25% of its energy from renewable sources by 2030.
Let’s face it. Your utility company is not that excited about you producing your own power. You would be using less of their electricity because it means less money for them. Whatever works is the message here – the main reason the utilities are offering you incentives to put solar on your roof is because Massachusetts and other states are forcing them to – if they don’t meet the standards, they have to pay large fees back to the state.
Massachusetts Solar Incentives
Net Energy Metering (NEM)
Net Energy Metering or Net Metering allows consumers who generate some or all of their own electricity to access it anytime, not just when that power is being generated. Solar is not an “on demand” resource – you want electricity 24/7, not just when the sun is shining. That’s where net metering policies come in. They regulate how your solar installation connects with your local utility company to access electricity. through their delivery grid. The policies vary by state but most provide solar customers a way to store and access energy based on the kilowatts they generate. Costs vary depending on how much power the consumer generates and uses.
MA also has a great SREC (solar renewable energy credit) program. The local utility will “purchase” your SREC basically taking credit for the renewable energy generation and helping them to achieve their targets as mandated by the State’s Renewable Energy program. Currently the value for each SREC in MA is $285/SREC. Based on how big your solar system is and how much energy it produces that will determine how many SRECs your system generates. At the end of the day it is more money in your pocket for generating solar energy.
State Tax Credit
MA offers a state tax credit for all purchased systems (cash & loan). This incentive is good for 15% of the system up to $1000.
Federal Investment Tax Credit
All 50 states are eligible for a 30% Federal Investment Tax Credit (ITC) to reduce the cost of the system. This is calculated as 30% of the value of your system after the upfront rebate. If you choose to purchase or finance your system this tax credit goes to you directly through your federal tax return, and if you choose to lease your system will be assigned to your leasing partner which ultimately lowers your cost. Your solar specialist will calculate this for you and can consult with your accountant to fill out Form 5695 to claim your credit.
Massachusetts Electricity Prices
Massachusetts is tied for the nation’s 3rd highest electricity prices
Cost per kwh (cents)
Why are electricity prices important?
The power your solar panels produce reduces your electric bill. The higher the price of power, the more you save by generating your own.
And if electricity prices are low in your state, it might be because your utility company gets most of its energy from cheap coal. That makes solar less economical, but doesn’t take into account the long-term environmental costs of cheap fossil fuels.
Massachusetts Solar Power Tax Credits
Massachusetts has the nation’s 8th best solar tax credits
Savings with Solar (up to $1,000)
How do state solar tax credits work?
State tax credits aren’t technically free money, but they are “credits” and not “deductions”. If you are taxed enough to take advantage of them, they are a 1-to-1 dollar amount off your taxes that erases a huge portion of the cost of installing solar panels.
(Keep in mind, we are not tax professionals and give no tax advice so please consult a professional before acting on anything we say.)
Solar Power Performance Payments
Massachusetts has the nation’s 3rd best performance payments
Maximum SREC Dollar Amount
What is a performance payment?
Performance payments reward homeowners for the electricity their panels produce on an ongoing basis.
They are credited either as a per-kWh bonuses or Solar Renewable Energy Certificates (SRECs). Either can fatten your wallet.
The per-kWh bonuses directly reduce your electric bill, whereas SRECs must be sold after they are earned.