Financial Incentives for Solar PV and Batteries

There are a number of federal and state financial incentives for making green energy investments. Incentives for PV and batteries include the following:

Financial Incentives for Solar Photovoltaics (PV)

The Solar Massachusetts Renewable Target (SMART) Program

The Solar Massachusetts Renewable Target (SMART) Program is a production-based incentive paid directly to solar electric system owners based on the amount of electricity produced.

Once a system is approved to participate in the program, a typical residential system will be eligible to receive incentive payments for 10 years. Incentives are issued by utilities monthly via check or electronic payment.

Customers are eligible for a base incentive rate and other adders such energy storage adders.

SMART Program additional details and special requirements

We strongly encourage you to work with your installer to learn how this incentive will benefit your project and financial projections.

Visit the www.masmartsolar.com for more information and resources.

Mass Solar Loan Program & Other Sustainability Loans

Mass Solar Loan Program

MassCEC’s Mass Solar loan program connects customer interested in purchasing a residential solar PV system with local lenders offering fixed-rate loans. There are incentives available for income-eligible customers, including up to $10,500 applied directly to the loan principal.

Solar Loan Program additional details and special requirements

Incentives are available for income-qualified (<80% of state median income) customers only. Non-income qualified customers are not eligible for incentives but can still seek market rate loans from participating lenders. See the chart on Page 6 for income eligible more information.

For residential projects only. Visit www.masssolarloan.com for detailed program information and eligibility.

Existing buildings must have completed a home energy assessment within the past 5 years.

For detailed information on the incentives available, please see www.masssolarloan.com/loan-support-incentives.

Solar Loans Through UMassFive Sustainability Loans

UMassFiveCollege Federal Credit union offers sustainability loans to Mendon and Upton residents for the purchase and installation of solar electric systems. For those who do not qualify for the Mass Solar Loan, UMassFive College Federal Union has developed the MySolar Loan as an alternate solution for your Solar Financing needs.

  • Low-interest loans that will not tie up the equity in your home

  • Up to $60,000 and 120 month terms with Mass Solar

  • Up to $75,000 and 180 month terms with UMassFive's MySolar Loan

  • Mass Solar subsidy for eligible, income-qualified residents

  • No closing costs

Federal Investment Tax Credit

The Internal Revenue Service (IRS) offers a 26% tax credit based on total installation costs with no maximum amount.

Federal Investment Tax Credit additional details and special requirements

Residents should complete Form 5695 and follow the IRS instructions.

Tax-exempt non-profit and public organizations are not eligible to receive the tax credit.

If the entire credit is not used in one tax year, it can roll over to next.

Note that this federal tax credit steps down to 22% in 2021 and expires December 2021. Speak to a tax professional for advice on how best to apply this to your project.

State Renewable Energy Tax Credit

The Massachusetts Department of Energy Resources administers a 15% state tax credit for installation costs. This credit has a maximum amount of $1,000.

State Renewable Energy Tax Credit additional details and special requirements

Only residents are eligible for this tax credit. This credit may be rolled over to the next year if not used in one tax year.

Property and Sales Tax Exemption

Solar PV is 100% exempt from the Massachusetts sales tax (6.25%) under MGL 64H.6(dd).

Solar PV is 100% exempt from the Massachusetts property tax for 20 years under M.G.L. ch. 59 § 5 (45, 45A)

Property & Sales Tax Exemption additional details and special requirements

For the sales tax exemption, fill out Form ST-12 (Exempt Use Certificate, Section 3) and provide it to your installer. The form can be found here: https://www.mass.gov/files/documents/2017/12/12/dor-sales-use-form-st-12.pdf

To learn more about the property tax exemption, please see the Massachusetts Department of Revenue’s Information Sheet: http://www.mass.gov/dor/docs/dls/city-town/2012/ctmarch1-2012.pdf

Net Metering

Net Metering allows solar electric system owners to sell any excess power they produce back to their utility and receive a credit on their electric bill valued at almost the full retail rate for the power produced. A net meter spins backwards as a solar electric system produces energy, just as it spins forwards when the customer consumes electricity. The customer is then billed for the net electricity consumed or receives a credit for net electricity produced. Credits received can be applied towards future electricity bills.

Net Metering additional details and special requirements

System sizes under 10kW are exempt from the net metering cap and receive near full retail value for their electricity.

System sizes over 10kW may be subject to the net metering cap and receive value at 60% of the retail rate.

For full details visit: https://www.mass.gov/guides/net-metering-guide

Financial Incentives for Battery Storage

Battery Enabled Demand Response: Connected Solutions Program

ConnectedSolutions uses batteries to reduce peak energy use, reducing air pollution and lowering electricity cost. The owner receives credit from the utility in return for the utility drawing on the battery system during times of peak electricity demand.

Connect Solutions Program additional details and special requirements

Summer Peak: $225/kW-performed-summer (Also eligible for SMART Battery Adder.)

Winter Peak: $50/kW-performed-winter (Also eligible for SMART Battery Adder.)

Incentives are paid based on the performance of your battery during peak events. The more your battery can discharge, the higher the incentive.

Details on peak events

  • There will be about 50 peak events per summer, and about 5 per winter

  • You don’t need to take any action during peak events. Your battery system will discharge automatically.

  • Peak events last about 3 hours each.

Customers must participate with an approved battery implementer.

For more information, talk to your solar installer or contact one of the approved battery implementers.

0% Interest HEAT Loan for Connected Solutions Program

0% interest HEAT Loan

Lifetime HEAT Loan Cap of $25,000

Up to a 7-year term for qualifying homeowners

0% Interest HEAT Loan for Connected Solutions Program: additional details and special requirements

  • Loans are for the cost of the batteries only (not PV)

  • Loans are for participants in the Connected Solutions Program

MassSave provides an Authorization Form for customers to take to over 80 participating lenders in the HEAT Loan program. It is at the discretion of the lender to provide the customer the loan and provide the terms. If the customer qualifies for a loan, MassSave will buy down the interest rate to 0%.

The Solar Massachusetts Renewable Target (SMART) Program

The Solar Massachusetts Renewable Target (SMART) Program is a production-based incentive paid directly to solar electric system owners based on the amount of electricity produced.

Although this is primarily a solar incentive, there is an additional incentive for solar system with battery storage.

Once a system is approved to participate in the program and incentive rate is calculated, a typical residential system will be eligible to receive incentive payments for 10 years. Incentives are issued by utilities monthly via check or electronic payment.

Customers are eligible for a base incentive rate and other adders such energy storage adders.

Also eligible for the Connected Solutions Incentive. Please see above.

SMART Program additional details and special requirements

We strongly encourage you to work with your installer to learn how this incentive will benefit your project and financial projections.

Visit the www.masmartsolar.com for more information and resources.