Commercial Solar Financing & Incentives

Solar Incentives for Businesses in Massachusetts

Investment Tax Credit (ITC) 

The ITC (aka the commercial solar tax credit) is one of the best financial incentives for commercial solar panel installation. It allows your business to claim a 30% federal tax credit based on the total cost of your solar project, significantly lowering your upfront investment.

UPDATE: The ITC Is Ending Soon 

Under a new federal law passed on July 4, 2025, the ITC is now scheduled to expire early. To qualify, your project must either :

• Begin construction by July 4, 2026, and be placed in service within four years.
• Be placed in service by December 31, 2027. 

If you’re thinking about installing solar panels for your business, now is the time to act. Waiting too long could mean missing out on this huge tax incentive and paying 30% more for solar.

Direct Pay ITC for Tax-Exempt Organizations

Tax-exempt entities such as municipalities, public schools, non-profits, and rural electric cooperatives can benefit from the ITC through Direct Pay (also called Elective Pay). This provision allows eligible tax-exempt organizations to receive the full value of the tax credit as a cash payment from the IRS. 

UPDATE: Just like the ITC, Direct Pay is subject to the same early expiration rules. To qualify, projects must follow the same timelines outlined above.

MACRS Depreciation

The Modified Accelerated Cost-Recovery System (MACRS) is a tax depreciation system available to businesses that install commercial solar panels. Under MACRS, tax law offers 100% first-year ‘bonus’ depreciation for qualified commercial solar energy systems. Taxpayers may opt out of the first-year depreciation and choose a 5-year MACRS schedule instead if they wish. MACRS depreciation makes it easier for your business to quickly recover the costs of your solar installation investment.

Net Metering 

Most commercial solar projects in Massachusetts are eligible for net metering, which allows you to send excess electricity to the main grid and earn utility credits. These credits can offset the cost of power you use when your system isn’t generating power, like at night. 

Commercial net metering policies vary based on system size and project type. My Generation Energy can help you determine your eligibility and expected credit rate.

Renewable Energy Credits (RECs) 

Renewable Energy Certificates (RECs) create an additional revenue stream for your business. For every 1 megawatt-hour (MWh) your solar system produces, you earn one REC, which can be sold on an open market for cash. In Massachusetts, utilities are required to source a certain percentage of their electricity from renewable sources, like solar, wind, and hydro power, and they purchase RECs to meet this requirement.

Solar Massachusetts Renewable Target Program (SMART)

SMART is a state incentive program that pays your business a set rate per kWh for the solar energy you generate. Currently, it only has value for standalone systems. However, Massachusetts recently launched the newest version of its SMART program, SMART 3.0, which will be a huge boost to commercial solar and provide more value to non-standalone systems.