Your 2020 guide to getting solar panels for your home in Massachusetts
This page is a complete guide to the complicated and sometimes confusing process of installing solar panels on your Massachusetts home. Since there's a lot to consider, we've separated the page into sections to help you find what you are looking for. If you find this page useful, please share it with someone who might also find it interesting!
** What's new for 2020 **
Massachusetts remains a top place to go solar. Its SMART solar incentive is still strong despite having stepped down significantly in 2019. Homeowners can still expect payback in 6 years, and a rate of return which significantly outpaces other investments relative to the low level of risk associated with the sun rising every morning. The sheer quality of solar incentive programs, tax credits, exemptions, and loans earns the state a Solar Legislator Score of 'A+'. Bear in mind, we have even more localized solar information in the Boston metro area; check out our local solar resources.
Questions? Our network of solar experts are on call to assist you. Simply sign up for personalized assistance on our special solar deals page. You can get discounted on-grid pricing as low as $4,000/kW! This is paired with the super Massachusetts solar incentives you see below.
What you'll find on this page:
The Solar Strategy section is focused on the 3 ways of paying for solar in Massachusetts, so you can decide which is best for you. We've created a tool that asks you a few questions and recommends whether you should pursue a solar lease, loan, or outright purchase. Then, we provide detailed analysis of how each works.
The Policy Information section contains all our latest research on the rules set by lawmakers and the Public Utilities Commission, which determine how easy it is to go solar in Massachusetts. These policies and rules govern everything from renewable energy mandates to interconnection, and have a huge effect on the viability of solar.
Finally, the Solar Incentives section includes information about money-back rebates and grants, tax credits, and tax exemptions for going solar in Massachusetts.
Click any of the boxes below to go to that section of the page, or scroll down to read the page in order.
|Your Massachusetts Solar Strategy|
|Massachusetts Solar Policy Information|
|Massachusetts Solar Incentives|
|Your Massachusetts Solar Strategy|
|Comparing Solar Investment Options|
|Paying Cash for Solar in Massachusetts|
|Solar Loans in Massachusetts|
|Solar PPAs in Massachusetts|
|Solar Purchase Payback Time in Massachusetts|
|Massachusetts Solar Policy Information|
|Renewable Portfolio Standard (RPS)|
|RPS Solar Carve-Out|
Your Solar Strategy in Massachusetts
Figuring out the best way to go solar in Massachusetts can be a little daunting. From loans and leases to power-purchase agreements, there are a lot of options out there. To help you pick the one that might be best, we've created the handy decision tool below.
We'll ask you a few simple questions about you and your home. Once you're done, we'll recommend a good option. Further down this page, we provide cost estimates and example return-on-investment calculations for all the various options:
How to pay for solar panels in Massachusetts
The chart above shows the 25-year returns for an investment in solar whether you choose to purchase a system with cash or pay over time with a loan or lease. As you can see, Massachusetts has the potential for extremely high returns. The purchase option leads to the highest dollar-amount returns over time, but look a little closer. Taking a loan (the orange bars) and paying for the system over time means you'll never actually put down any of your own money.
That's what makes the solar loan option better. If you take a HELOC, you'll pay the system cost down monthly, but you still get a huge tax credit after the first year, and benefits from the Massachusetts SMART solar program for the first 10 years, too. Your payments over 15 years will actually be less than the savings and income your system will generate, and it'll mean that you're never putting any of your own money into the purchase. All you need is great credit—or the equity for a HELOC.
The option with the smallest savings is for a solar lease or PPA, which means you put $0 down on a rooftop solar system and pay monthly while you accumulate electricity bill savings over time. Leases and PPAs are an excellent option if you don't have any equity or cash to put down, and they still save you thousands.
Read more below about each of three very good options for solar in Massachusetts!
Option 1: Paying cash for solar
An outright purchase used to be the only way to get solar, and it's still the option that provides the "biggest" financial returns. The reason we put "biggest" in quotes here is because it's technically true. You'll see a net return of almost $45,000 in 25 years if you pay up front. But it requires a significant up-front investment.
If you have equity in your home or good credit, you can get a solar loan or HELOC with an interest rate of 4% or less. It's like being able to start a business that is sure to succeed, just by having a roof. Read about loans above.
If you've got cash and you prefer to pay up front, you'll have to plunk down $21,000. But by the end of year 1, incentives and energy savings will erase a bunch of it. Over 25 years, your system will have produced about $45,000 in income. The reason this works is that electricity in Massachusetts is EXPENSIVE. Solar offsets enough of it to save you about $1,700 in year 1, and it just goes up from there. As the electric company raises rates, you save more and more, and more...
The best thing about solar in Massachusetts might be the state's SMART Solar Program, which can make solar homeowners thousands of dollars over their systems' lifetimes. You get paid a little extra for every kilowatt-hour your system produces, whether it's used to power your home or sent back to the utility company. A tyical 6.2-kW system in Massachusetts will earn its owner about $800 for each fo the first 10 years it's making power.
Here’s how the numbers pencil out when you pay up front for a 6.2-kW rooftop solar system:
- Installing a typical 6.2-kW solar system should start at about $21,080. That's cheaper than solar has ever been, but it still might seem like a big investment. Don’t worry, because after tax breaks and energy savings, your first-year costs will be considerably less than that.
- The Feds calculate their incentive based on actual out of pocket costs, so take 26% of $21,080, for a tax credit of $5,481. And Massachusetts will throw another $1,000 tax credit on top! Your total investment is now down to just $14,599.
- After the tax credit we subtract your first year’s energy savings, which we estimate to be $1,724. That reduces your cost after the first year to only $12,875.
- That isn't the end of the savings train! The Massachusetts SMART Solar Program will earn you $806 this year, bringing the final year 1 cost to just $12,069. That's 43% off the starting price!
- Your system will pay for itself in just 6 years, and over its 25-year life, you'll see a total net profit of $44,744. The internal rate of return for this investment is a stupendous 20.6%!
- And don't forget... your home's value just increased by more than $15,000, too (your expected cost after the tax credit)!
- In addition to all that cash (and home value), you’ve created some green for the earth as well by not using electricity from fossil fuels. It's like planting 127 trees a year, every year your solar power system is humming.
Keep in mind, the numbers above are based on an average home in Massachusetts. If you're ready for a custom quote for a solar panel system, our network of experts are on call to assist you. Simply sign up for personalized assistance on our special solar deals page.
Option 2: Using a loan to pay for solar
You don't need $21,000 sitting around to pay for solar. As long as you have equity in your home, you can still own solar panels and reap all the benefits. Heck, even if you do have the cash, getting a loan to pay for solar is by far the best option when it comes to percentage return on investment.
That’s because, in Massachusetts, using a loan to pay for solar is like investing in a business that's sure to succeed, and also earns you state AND federal tax breaks. Your tax savings will be huge in the first year—more than enough to offset the small difference between the loan payments and electric bill savings. All this means you'll never have to spend a cent on solar, and you'll still come out way ahead over 25 years.
A solar purchase like this will make sense for you if the following is true about you and your current situation:
- You can qualify for a solar loan or home-equity line of credit (HELOC) for $21,000, with a fixed rate of 4% or lower and a 15-year repayment period. Don't be put off if you're offered a higher rate. It just means a tiny bit less of the thousands of dollars you'll make with solar.
- You love making money without much risk.
Here’s how the numbers pencil out for a Massachusetts solar purchase with a loan:
- Installing a typical 6.2-kW solar system should start at about $21,000. That's how big your loan will need to be to cover it.
- The electricity you'll save in the first year of operation would have cost $1,724, but your annual loan payments will be $1,935, meaning you would spend $211 on solar this year, but...
- You'll also see a huge tax break. The Feds give you 26% of the cost of your system back as a tax credit, which in this case is $5,481, and Massachusetts adds on another $1,000. You'll be paying over time but getting all the benefits up front!
- The final bit of savings comes from the Massachusetts SMART solar program. They pay you a little extra for every kilowatt-hour of juice your panels make in the year. We estimate the first year incentive payment from the SMART program is $800 for the average 6.2-kW system. All these incentives mean you'll come out $7,076 ahead after year 1.
- The electricity savings and SMART program incetive will always be more than the cost of your loan. You won't ever spend a penny on solar, and you'll come out $36,797 ahead after 25 years. Home solar in Massachusetts is an incredible opportunity.
- On top of the green that will stay in your pocket, your system will mean green for the environment, too. 127 trees-worth, every year!
Keep in mind, the numbers above are based on an average home in Massachusetts. If you're ready for a custom quote for a solar loan, our network of experts are on call to assist you. Simply sign up for personalized assistance on our special solar deals page.
Option 3: Buying the electricity, not the panels with a Power Purchase Agreement (PPA)
Massachusetts residents have long enjoyed the ability to get solar from a third-party company and pay monthly, and a Power-Purchase Agreement (PPA) is still a great way to go, especially if you haven't got piles of cash or equity in your home. The state legislature and public utilities commission are really into solar, so there isn't much reason to worry that utility companies will start trying to impose monthly fees on solar homeowners like they have in other states.
For now, a 6.2-kW solar system can save you about $63 per month with a PPA, which might not sound like a lot, but add that up over 25 years and consider how much electric companies raise rates on that electricity you won't be paying for, and you have a end up with a small mountain of cash with very little risk or work. You can put $0 down and start saving right away, while the installation company takes care of all the maintenance and repairs.
By the time the end of your PPA rolls around, you'll have an extra $23,256 in your pocket. Must be nice to have such big pockets!
Keep in mind, the numbers above are based on an average home in Massachusetts. If you're ready for a custom quote for a solar PPA, our network of experts are on call to assist you. Simply sign up for personalized assistance on our special solar deals page.
Massachusetts Solar Policy Information
Ever wonder why solar seems to be everywhere in some states, but not in others? We did too.
State legislatures and public utilities commissions can enact rules to make solar power accessible for everyone. Favorable rules explain why some of the cloudiest states—New York, New Jersey, and Connecticut, are doing so well with solar, and yet some of those with the most natural solar resources—like Alabama, Mississippi, and Georgia—are doing so poorly.
Below is important information about the public policy, rules, and economic reasons that affect your ability to go solar here in Massachusetts:
Massachusetts's Renewable Portfolio Standard
50% by 2045
The current Massachusetts RPS is two-tiered, establishing standards for Class I (new resources) and Class II (existing resources) electricity production. The Class I standards are aimed at producing new (post-1997) renewable energy sources, including residential solar installations, and requires that 50% of all the power generated in the state needs to come from these renewable sources by 2045. Additionally, Massachusetts legislators have also mandated a 1% increase in Class I production each year thereafter -- with no expiration date!
Effectively that means the state mandates 100% renewable energy by 2095. That's a bit laughable, considering the ever-increasing pace of solar adoption around the country, and, oh yeah, how Cape Cod will probably be under water by that time if we don't reduce emissions MUCH sooner, but hey, a bunch of other states don't even have Renewable Portfolio Standards, so good on ya, Bay State legislators!
One other thing the new RPS law did for Massachusetts residents is overturn a planned additional "demand charge" that Eversource wanted to levy on home solar owners. Essentially, the utility company wanted to charge home solar owners more just to use the same grid everyone else does, but the legislature said "not on our watch," and overturned the charge.
From a state we rate so highly for other aspects of its solar friendliness, we were a little disappointed to see such a low bar set for its renewable energy goals at such a late date in the future relative to what other progressive state legislatures were able to accomplish (see California, Colorado, and Maine for example). The +1% annual additional requirement is a nice touch to ensure compliance is occurring regularly, though we feel there’s a higher level to aspire to here.
Massachusetts's Solar carve-out and SRECs
Massachusetts has devised an ingenious progressive solar incentive system which favors low-income, small scale, and community solar energy projects. It’s called the SMART program. At the program’s core is a formula which includes a base compensation rate which decreases as your system gets larger.
For every kwh of solar energy you produce with your solar panel system as long as it’s 25kw or less (that’s about an 80 panel installation, way more than enough electricity for a very large household’s needs), you get paid 230% multiple of the base compensation rate. Special compensation rate adders are available for community shared solar projects, low-income properties, and/or both!
More details on the Massachusetts SMART Solar Program
The SMART Program requires the 3 main Electric Distribution Companies (EDCs)—Eversource, National Grid, and Unitil—to make incentive payments directly to homeowners who install solar systems within their territory. The incentive is calculated based on a "block" system, where each block represents about 200 MW of solar energy generation capacity. Each time a block is filled (i.e. 200 MW of solar are installed), the incentive amount decreases slightly. So people who install systems in the earlier blocks get higher incentive payments than those who wait to install later.
At the current level (early 2020), people who install solar on their homes are eligible for a net incentive payment of about $.102/kWh for 10 years. Considering the average Massachusetts home solar system generates around 7,900 kWh per year, that's over $800 in incentive payments per year.
If you're ready to move forward with getting solar for your Massachusetts home, get multiple solar quotes today and compare offers to find out which is right for you.
Massachusetts Electricity Prices
We've got good news and bad news... The bad new is Bay Staters pay a ton more than the national average for electricity, and those rates are rising. The good news is, the more electric prices go up, the more you save with solar!
Massachusetts’s average electricity price is 19 cents/kWh, which is about 15 PERCENT higher than it was just 5 years ago in 2014. Those rising costs give you 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 continuing to focus on crafting strong solar policy.
Higher electricity prices means greater opportunity to save money by producing your own clean, earth-friendly solar power. Not to mention the fact that the rising environmental costs and dwindling supply of fossil fuels is going to lead to even faster increases in energy prices, likely sooner rather than later. While energy prices keep going up and up (and up), you’ll be saving more (and more) money for making the switch to solar now. Just remember to thank us later.
Massachusetts Net Metering
Thankfully, unlike other states, Massachusetts has recently reafirmed its commitment to net metering for residential systems, so you can rest easier knowing the state has your back. For Massachusetts residents under Class I residential net metering rules for solar, any extra energy your panels produce is credited to your bill and carried over indefinitely.
When you get a quote from an installer, ask them to explain your local net metering program. This will factor into your payback time.
Massachusetts Interconnection Rules
Recently, Massachusetts alleviated the headache of fragmented interconnection guidelines and required utility companies to comply with a standard agreement. The details of interconnection vary by utility -- for more information on your utility’s standards and to apply, check out the Massachusetts interconnection page.
Massachusetts Solar Incentives
Next to high electricity prices and net metering, solar incentives have traditionally been the most important factor for whether home solar power makes financial sense in a state. In the past, some states with otherwise lousy policy had tremendous incentives that drove down the up-front cost of going solar so much that homeowners could save oodles of money even without net metering or a good RPS.
These days, the big incentive most people can get is the Federal Solar Tax Credit that earns you 26% of your total system costs back after just 1 year. State incentives play less of a role than in the past, but some really good ones are still out there, ready to help homeowners go solar and save money before you know it.
Let's see how Massachusetts measures up:
The availability of state solar incentives for residential solar systems was sourced from the Database of State Incentives for Renewables and Efficiency, utility company websites, and the state public utility commission.
Massachusetts Solar Power Rebates
Varies by locale
Massachusetts used to have a nice, simple statewide rebate program called "The Commonwealth Solar II Rebate Program". Sadly, the program has now closed, because it was so effective that funding ran out. Luckily, some local municipal utilities have stepped in to take the place. Unfortunately, these small companies serve only a fraction of the state's population.
Still, check out this list and see if you're one of the lucky few who still get a rebate in MA:
|Chicopee Electric Light||$.50/watt, up to $2,500||Must meet additional requirements|
|Concord Municipal Light Plant||$.625/watt, up to $3,125||Must meet warranty requirements|
|Hudson Light & Power||$1 or $1.25/watt, up to $6,000||Rebate amount subject to panel orientation. Orientation between 220° and 300° (west, basically) qualify for $1.25/W. Must meet UL standards and warranty requirements|
|Ipswich Municipal Light Department||$.80/watt, up to $4,250||Additional incentive for USA-built components, subject to other requirements.|
|Reading Municipal Light Department||$1.00/watt, up to $2,000||Additional incentive available for locally-manufactured equipment|
|Taunton Municipal Lighting Plant||$1.50/watt, up to $4,500||Subject to residency requirements and other factors.|
If you’re confused, fear not. There are still plenty of ways to save with solar in Massachusetts. If you want to skip all the complex information about the potential savings of solar and get an accurate idea of what you can expect for your home, fill out our contact form for personalized assistance from local experts.
Massachusetts Solar Tax Credits
15% up to $1,000
Massachusetts has had a state tax credit for renewable energy longer than most of the Solar Power Rocks staff have been alive. The state offers a 15% tax credit off the net costs of your solar system, but only up to a maximum of $1,000 (net costs, meaning cost minus the federal 30% tax credit).
Basically, for most systems, count on $1,000 off next year's state income tax bill, on top of the big savings from the Feds.
Property Tax Exemption
100% for 20 years
This means when the Massachusetts property tax man or woman cometh to assess your new solar home, they can’t assess you another dime for 20 years -- despite the fact that you’ll be adding roughly 20 times your annual electricity bill savings to your property value. In the case of our 5kW example, that adds up to about $19,890 (20 times your annual electricity savings of $995).
Sales Tax Exemption
In addition to the property tax exemption, you don’t pay sales tax on your system either, so the installed price is the installed price.
Low-income Solar Programs
Solar Loan and SMA
Grade: ALearn more about low-income solar programs available in the U.S.
The consensus on Massachusetts solar power rebates and incentives
Massachusetts legislators have done an outstanding job of providing their state with solar incentives. Bay Staters have access to state rebates, tax credits, property and sales tax exemptions, and ongoing performance payments — due in large part to a strong RPS and solar carve out. In addition, they have set an amazing example of meeting their established solar goals and upping them. For that, we give Massachusetts an “A+.” Keep up the good work!
Again, if you are confused about how these numbers work and would like some personalized assistance or a quote of your own, simply connect with our network of solar experts. They’ll help sort out all the pricing, get you access to special deals, and they’re super friendly to boot!