MA Incentives for Residential Solar Electric (Photovoltaic) Systems
Massachusetts is one of the strongest states for solar electricity. Not only do we pay a premium for conventional power (we were in the top 10 states for electric rates in 2011), but we have some of the deepest incentives and consumer protection regulations for solar system owners. In addition to reducing or eliminating your utility bill, there are three types of incentives to motivate homeowners to install photovoltaics: rebates, tax credits, and solar production incentives.
The Solarize Newburyport Rebate program, run by the Massachusetts Clean Energy Center, issues rebates based on system size. Some homeowners can receive rebate additions based on income or home value. The base rebate is $.40 per watt, or $2000 for a typical 5 kilowatt system. Everybody in Newburyport is eligible.
Massachusetts residents who install solar are eligible for both a federal 30% tax credit and a Massachusetts state $1000 tax credit. These are tax credits – not write-offs – meaning that for a $33,000 system, the ownerwould owe $10,000 less in federal and $1000 less in state taxes. Thefederal tax credit is un-capped, and taxpayers can have any remaining credit balance roll-over year after year through 2016.
Massachusetts has one of the nation’s strongest Solar Renewable Energy Credit, or SREC programs. After a system is installed and registered withthe Massachusetts Department of Energy Resources (DOER), system owners earn SRECs by producing solar electricity, with every megawatt hour of production earning one SREC. The electric utilities purchase SRECs on a market regulated by the DOER in order to meet state renewable energy standards. The value of an SREC is determined by market conditions,but for 2012 & 2013, the DOER has established a ceiling price of$550 and a floor price of $300 per SREC, and that floor price market mechanism is offered for 10 years.
During the day, when your solar electric system generates more power than you use, you actually send electricity back to the utility, spinning your meter backwards. At night, when you use more electricity than you produce, your meter spins forward again. At the end of the month, your electric bill becomes the net difference between your production and your consumption. Utilities must value electricity produced by system owners at essentially the same rate that they charge for power.
Indirect Return on Investment: Home Value
A nation-wide study published by the Appraisal Institute estimates that property value increases by $20 for every utility-bill dollar saved due to energy improvement. Also, the U.S. Department of Energy recently found that even in soft housing markets, a home with solar will sell in half the time as one without.
Newburyport has 100%, twenty-year property tax exemption for renewable energy systems, meaning a homeowner’s property taxes cannot be raised because of a new solar system.
A Massachusetts renewable energy sales tax exemption means customers do not pay sales tax on a solar system.
This information draws on data published by federal, state and local agencies. SunBug Solar makes no guarantees for the value of any solar incentives based on this information.