What are the state and federal incentives?

Incentives at installation:

State incentives

  • There is a modest state rebate ($.25-$.70 per watt) applied against the initial cost of the system.
  • State income tax credit of 15% of the installed cost, up to a maximum of $1,000.
  • Solar electric systems are exempt from state sales tax and town assessment increases

Federal incentives

  • 30% of the initial cost (less the state rebate) as a credit against federal income tax for the year the system is installed. Currently unused credits can be carried forward for several years.

Ongoing state incentives:

  • Net metering allows owners to bank excess electricity production with Western Massachusetts Electric Company. For months in which the number of kilowatts produced is more than that consumed, credit is received on the utility bill against future electricity purchases. In addition, excess kilowatts can be given to another user in the Western Massachusetts Electric Company system.
  • Massachusetts also enables solar electric owners to be paid for the renewable energy attributes of the electricity produced.  For the first ten years the solar electric system is in operation, every 1,000 kilowatt-hours (kWh) generated earns one solar renewable energy certificate (SREC) which can be sold to Massachusetts utilities and competitive electricity providers.

Prices are market-based, but range from about $200-285 each (after commission). Transactions are typically handled by an SREC broker (or “aggregator”).

Appears in: Energy and Sustainability FAQs

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