Massachusetts Solar Power Rebates, Tax Credits, and Incentives

Cheryl

Soooo Let me get this straight… I spend $23,000 up front to save $20,000 over the next 25 years??? Sooo, I’m still out $3,000 over time, but out $23,000 now. Where’s the sense in this??? Worse yet…. now my property value has gone up approximately $10,000 so my taxes are higher….. Not really seeing the benefit as a MASS resident. Now, CT has a much better program. I suggest our Governor, who claims to be about solar energy, have a chat with the CT Governor, who is really all about solar energy.

Kirk

Cheryl — There is a MA 20-year property tax exemption for the system. Plus the federal rebate has the $2000 limit lifted starting 1/1/09, so you’ll get a full 30% rebate of your cost for systems installed after 1/1/09. So, your cost drops about $5000 more.

Phil

The numbers above in the example don’t tell all the story. First, if the size of the system is 3500 watts, the base rebate available from the state is close to $7000. But there is more money available to most mass residents. If the household annual income is less than $72,000, there is another $7000 for you, Next, if you home value is less than the medial value for your county, there is another $3500 available and if you use some components in the system that are from Massachussetts companies, there is still another $875 for you.
This is a total of $18,375 from the state rebate system (commonwealth solar)
Next there is a change in the Federal tax credit starting in Jan 2009 instead of $2000, YOU GET 30% OF INSTALLED COST MEANING another $10,000 from the Feds.
This comes to a total of about $28,375 in total rebates meaning the cost to you, the homeowner is only $3125. But it still gets better. The towns are NOT ALLOWED to tax you on solar generating technologies that are installed on your residence, so your property taxes do not increase but the resale value of your home does increase. You do the math now. Spend $3125……get back 20,000 minimum over the next 25 years….hmmmmmmm

Dont forget these panels have an expected lifespan of over 50 years. How much will your electric bill be then?

Michelle

Kirk and Phil,
Phil, I find some of your numbers somewhat misleading, though I was happy to hear of the Jan 09 new federal credit that is coming up. I have to take issue with the assumption that many people with an annual income of 72K would be looking to put up solar panels, if only b/c they might have to fork over the initial 30K only to get some (or most) of it back LATER. 30K would be more than half of their take-home pay…And also, if you are taking medial home prices, at least HALF of the homes in MA wouldn’t fall under those guidelines, if I understand the concept.
I wonder if the biggest residential consumers are those who want to act responsibly toward the environment but would have enough disposable income to be able to comfortably afford the initial outlay, even if they do get some of it back in the form of tax credits and rebates.
Glad to know that the towns are not allowed to raise property taxes based on this, but wonder if they and all their local appraisers know this.

Diane

If you are using solar hot water equipment, you get gypped under the new incentives. Most of the incentives are skewed towards photovoltaics, some to wind. Try to get a turbine installed at YOUR house…permits, height restrictions, etc. are a nightmare. The SRCC said that Solar hot water is 6 times more efficient than PV. You’ll never get a 3500W PV system on a normal sized house. But I get all my hot water on my small roof. My SHW system ROCKS, -I have made 1.4 MW equiv since October, and actually have the furnace turned off. (Wood stove). The propane truck has come twice, and not had to leave any propane yet. Unfortunately, since I am not a business or corp, I can only qualify for the State $1000 and the Fed $2000; (nothing else local); I did it with my home equity line. It’s time to put your money where your mouth is and commit yourself to investing in your own energy independence. You can easily spend $20,000 on a new car…will that save you money? What’s the payback on that? (ans: there isn’t one..) This is the chance to purchase equipment that will work for YOU, on YOUR home, decreasing the amount of YOUR hard-earned money that goes somewhere else and into someone else’s pocket. It’s the chance to not burn fossil fuel, to not be at the mercy of this years speculators, and maybe to reduce my so-called carbon footprint. The only other thing I wish for is a full 30% credit on my $19,000. solar hot water investment. PV needs those incentives because the numbers just don’t run.. they are just not realistic yet, but don’t penalize us water geeks!

mark

As the saying goes, the women are smarter…as least as far as the benefits of solar thermal vs. PV are concerned. Cheryl, Michelle and Dianne rightly question the “PV savings myth” and point out that solar thermal is a better investment than PV through their practical financial reasoning. I’d let them manage my money any day!
As someone working in the solar industry, I find that even w/ the rebates, credits, etc, the payback is too long w/ PV. By contrast, with solar thermal, a typical Northeast family that uses an oil-fired indirect or tankless heater on their oil boiler (there are lots of these) will save at least one tank of oil (approx 225 gal) a summer to heat hot water ($495 at $2.20/gal) and 20% of the winter heating average of 600 gallons (120 gal) for total savings of $759 first year. The thermal system will also keep a lot of CO, sulfur dioxide and other nasty stuff out of the environment during our best solar seasons from April-November when you can turn your boiler OFF.
In Massachusetts, taking the roughly $10K cost of that system and deducting 3K in tax credits (state & fed) leaves $7K net investment. Dividing that by the low end savings per year of $759 in fuel saved (it’s more if fuel prices spike again) your breakeven is 9.2 years or less if fuel goes to $4/gal as it did last winter).
For the record Kirk and Phil, the PV credits, rebates, and other MA state incentives are supported by the lobbyists of investor-owned utilities who are trying to offset load w/ residential PV to make up for the 50% transmission loses in a worn out 50+ year old grid system they won’t re-invest in ’cause it will hurt their shareholder dividends. Much of the MA. rebate money comes from a taxpayer-funded pool, while the rest comes from surcharges on our electric bills. We’re all paying for a few PV systems and it’s wrong. When will people (and Gov. Patrick of MA.) wake up and figure out that using taxpayer money to subsidize offsets for public corporations is basically a Bush-era gimme to National Grid, Dominion and all the rest? They’re not our friends..screw them!

Kartik Chandrasekhar

The right way to do this is to do in in two steps. In the first tax year plan for Solar Thermal water heating. It is correct that this is the most efficient from a energy conversion efficiency as well as return on investment. The next year plan for the PV installation which does give you a good return over a period of time. Of course your pocketbook and roof area will dictate whether you want to go to phase 2 but that is the order you should follow. Spacing it over two years is only to maximize the tax benefit otherwise it can be done the same year.

kevin

I own a small company in MA. We were just awarded a contract to clean, repair and test components that are reused in the production of solar panels. In order to support this new contract we built a dedicated space with all new dedicated equipment. Could this dedicated expansion qualify for any tax credits under Alternative Energy Production? Manufacturesbe benefit My companysupport that we just expanded

Mauro

Hello,

I’m a developer from Los Angeles, CA specializing in sustainable design through solar energy. If anyone is in search of solar panels or solar water heaters feel free to contact me @ sustainability.rocks@gmail.com

Go Green

Daniel-Sun

Should anyone in the great northeast need a solar hand(insert applause here…), I would like to help. I am Daniel-Sun, A laid off electrician in Pa. , Fresh off my 1st ‘official’ solar training(dont use Unitek!), which flopped! Yeah the school advertised something they could not deliver, and I found them to be predatory and un-ethical(NAABCEP does not approve of such things as they quickly found out). So instead of being discouraged, I’m actively choosing to help others while also serving my own interests, by simply: Offering to help. Yes you! Please feel free to e-mail me ;bolo1uno@gmail.com or call on nights or weekends preferably (570) 212-1041
Peace. Daniel-Sun

Sean

Can someone provide a link to more information on the various rebates described in Phil’s comment? I couldn’t find them on this site. In fact, I couldn’t even find the source of the $5,670 rebate in the example above. The only link with the word “rebate” in it is to a program that only covers wind.

Am serious about installing a solar system so would definitely appreciate any help on this. Thanks.

Anon.

The state energy policy needs some rethinking. The ISO regional markets pay capacity payments for demand reduction and energy efficiency – e.g. to aggregators that sign-up big box retailers to dim lights on peak days (active) or municipal lighting projects (passive). These capacity payments in the wholesale markets to reduce energy usage are substantial money and are paid year round to “shave the peak” usage (yes, we all pay for them as part of the energy component of the retail power bill – in other words, it’s an indirect energy reduction tax that is not well targeted – some who receive payments may never even reduce consumption, e.g. if there is no call to dim lights or reduce AC use). A direct use of tax dollars makes much more sense for MA to establish a substantial fund – say $500 million (the cost of a medium size transmission line project to serve load growth) for direct allocation to homeowners for solar and back yard wind systems that would not only reduce consumption on a per-site basis but also serve as distributed generation to feed power onto the grid at times when the homes are using little power, like during the work day. This seems like money much better spent and a much more sound energy policy.

JR

A Head Scratcher!

The Massachusetts rebate stipulates that its rebate money is to be treated as taxable income, and they reserve the right to issue a 1099 to the owner.

Then, would reducing the cost basis of the system for the Federal ITC be double taxation? You would be failing to advantage the taxed income against the ITC.

Mike

My house was built in 1983. I thought I was ahead of the curve when my wife and I installed a solar panels to provide hot water to our home. We have a passive solar contemporary design in Acton. The system worked great for several years but for the past 5 years or so, we have been unable to find anyone in the area that can do maintenance on this system. Most local plumbers that advertise “solar” were lying. Does anyone know of anyone that can service a solar hot water system in the Acton area?

Tom Harrison

Hi — not sure if this is in the domain of the data you’re collecting, but Massachusetts residents who heat with gas from National Grid can get a 75% rebate on insulation and weather sealing, up to $2000. I did, and got a check for about $1,500.

I wrote about the details here on my blog: http://fivepercent.us/2009/05/22/75-credit-for-insulating-from-national-grid-until-july-31st/

(And despite the implication of the URL, the program has been extended)

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