MA and RI residents save even more with solar energy
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Solar Incentives and Financing
Massachusetts and Rhode Island are two of the best states for homeowners and businesses to take advantage of residential and commercial solar energy incentives, including rebates, tax credits, and financing. In fact, there are so many options available it can seem daunting to navigate. That’s where the team at My Generation Energy can help—we’ll make sure you save as much as possible on your solar energy installation and operation in Cape Cod, Greater Boston, South Shore, South Coast, and Rhode Island.
Solar Tax Credits & Incentives
Solar Investment Tax Credit / Federal Solar Tax Credit
Probably the most well-known national solar incentive, this federal initiative gives homeowners and businesses a federal tax credit equaling 26% of their total solar installation costs, with no cap, and allows them to roll forward any remaining balance if their tax credit exceeds the total amount of federal taxes due.
The ITC was extended but still due to decline after 2022. In 2021 and 2022, the tax credit will remain at 26% but it will drop to 22% in 2023, and in 2024 will be eliminated completely for homeowners and lowered to a permanent 10% for commercial solar installations.
Solar Massachusetts Renewable Target (SMART) Program
Massachusetts’s SMART solar program is one of the most valuable in the country. Utility customers for National Grid, Eversource, and Unitil are eligible for monthly payments for the energy their systems generate for up to 10-20 years. Solar energy systems and solar batteries qualify. The rate of payment is determined by a declining block system, and with the state recently doubling the size of the program to 3.2 gigawatts, there is still plenty of reason for Massachusetts homeowners and businesses to get on board.
Cities and towns served by participating municipal light districts or plants may also take advantage of a modified version of the SMART program. Contact us for details or learn more if you live in one of these territories.
Solar net metering is a solar incentive that allows homeowners and businesses to earn credit on their electric bills for any excess energy their system produces. The excess energy is sent back to the power grid, and in return you can use your credits to offset electricity costs for energy from the grid used during hours when your solar panels aren’t producing (like cloudy days or at night).
Both Massachusetts and Rhode Island have net metering programs—My Generation Energy can help you determine if you qualify.
Massachusetts Solar Battery Storage Incentives
If you’re a National Grid or Eversource customer in Massachusetts, you may qualify for payments under MassSave’s Connected Solutions program when you use solar battery storage during particular “peak usage” levels—times over the course of the year when the demand for electricity is highest. Customers receive incentives based on the performance depending on your solar battery system’s size, configuration, and other factors.
Local Property Tax and Sales Tax Exemptions
In Massachusetts, your solar panel system is exempt from local property tax for 20 years. In Rhode Island, your system is exempt permanently.
Both states also have favorable sales tax exemptions for eligible renewable energy materials. For example, you will not pay sales tax on your new solar array or battery in either Massachusetts or Rhode Island.
Rhode Island Renewable Energy Fund (REF)
Both homeowners and businesses are eligible to participate in Rhode Island’s REF program. Homeowners can receive as much as $6,000 in grants, while commercial projects go much higher.
Rhode Island Renewable Energy Growth Program
National Grid pays a performance-based incentive for solar generation by kilowatt hour depending on project size and other factors for a 15-20 year term for customers in Rhode Island.
Federal MACRS Depreciation for Commercial Solar
The Modified Accelerated Cost-Recovery System (MACRS) is a tax depreciation system. Under MACRS, tax law offers 100-percent, first-year ‘bonus’ depreciation for qualified commercial solar energy systems. Taxpayers may elect out of the first year depreciation and opt for a 5-year MACRS schedule if they wish. This makes it easier for your business to quickly recover the costs of your solar installation investment.
Beneficial Net Metering Regulations
(receive full credit for electricity value)
MA: Income Tax Credit of 15%
Property Tax Exemption
(on system value for a term of 20 years)
Sales Tax Exemption
(on all equipment)
MA: Solar Battery Incentives
Massachusetts residents and businesses get cash for solar battery usage.
RI: Renewable Energy Fund
Rhode Island residents and businesses receive grants for renewable energy generation.
RI: Renewable Energy Growth
Performance-based incentives for solar generation.
Cape Cod 5 Solar Loan
Fixed, low-interest solar loan option for owning home solar.
UMassFive MySolar Loan
Higher loan amounts and additional funding for related solar works.
Federal Tax Credit of 26%
Applied to total cost of system with no cap.
MACRS Depreciation (Commercial)
100% first-year bonus to speed up ROI
A major portion of your system cost is offset by these incentives in the first year!
Solar Financing & Loans
Many of the above rebates, tax credits, and incentives require that homeowners and businesses own their solar energy system, and at My Generation Energy, we’re firm believers that you’ll get the most benefit from solar energy by avoiding solar lease agreements. You own your solar panel system if you either pay in cash or take out a solar loan.
Residential Solar Loan Programs
Cape Cod 5 Solar Loan Program
Another solar financing program is Cape Cod 5’s Solar Loan program that offers flexible terms and competitive rates. Homeowners can qualify for a maximum loan of $75,000 at a low fixed interest rate with a repayment term of up to 15 years with no prepayment penalties. The Cape Cod 5 solar loan would be secured by a mortgage on the borrower’s primary or secondary residence and the solar installation would need to be installed on the property securing the loan. There is a one-time, no-fee re-amortization at any time throughout the loan, giving the borrower the opportunity to roll their tax credit into the loan after year one.
UMassFive MySolar Loan
As an alternative to the Mass Solar Loan, UMassFive has created a MySolar loan option for homeowners. With no origination fees, the MySolar loan offers higher maximum loan amounts up to $75,000, longer terms, additional funding for related works like tree removals or roof repairs, and flexible terms and conditions.
Disclaimer: My Generation Energy is not a tax advisor and the information is only to provide an outline of the potential tax benefits. Please consult with an accredited tax or financial advisor regarding your unique tax situation.