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There are a number of federal and state financial incentives for making green energy investments. Incentives for Solar Thermal Hot Water include the following:
There are a number of federal and state financial incentives for making green energy investments. Incentives for Solar Thermal Hot Water include the following:
Financial Incentives for Solar Thermal Hot Water
Financial Incentives for Solar Thermal Hot Water
0% Interest HEAT Loan
0% Interest HEAT Loan
0% interest HEAT Loan of up to $25,000 over a 7-year term for qualifying homeowners
0% interest HEAT loans additional details and special requirements
0% interest HEAT loans additional details and special requirements
In addition to qualifying for the loan:
If you live in a 1-4 unit building, you will need to have completed a Mass Save home energy assessment. Sign up for a Mass Save home energy assessment through www.masssave.com as soon as possible to make sure you’ll be able to qualify.
If you live in a 5 or more unit condo or apartment complex, you will need to meet the following requirements:
(1) Your unit must be individually metered for electricity and/or gas
An authorized representative of the building (e.g. building owner, condo board member, property manager) will need to enroll your building for a Mass Save Multifamily energy assessment.
Alternative Energy Certificates
Alternative Energy Certificates
The Commonwealth’s Alternative Portfolio Standard awards Alternative Energy Certificates (AECs) to owners of clean heating & cooling technologies. These AECs can be worth around $15-20 each, determined by the price paid by electric utilities at a public auction held every quarter.
The number of certificates you’ll receive will be based on three criteria: (1) the performance rating (OG-100 or OG-300) of your solar hot water collectors; (2) the number of collectors installed; and (3) the amount of sun those collectors receive.
After registering your system, you will be awarded AECs equal to 10 years’ worth of the heat your solar hot water system is expected to provide. Depending on the number of certificates you receive, this might be worth anywhere from $700 to $3,200 or more!
Alternative Energy Certificates additional details and special requirements
Alternative Energy Certificates additional details and special requirements
We strongly encourage you to contract with an AEC aggregator, who can sell your AECs on your behalf for a small fee. A list of potential AEC aggregators can be provided by your installer.
If you wish to contract with an aggregator, you will need to provide all information required by your aggregator. That’s it! Once the auction occurs, the aggregator will send you a check based on the auction price.
If you do not wish to contract with an aggregator, you will need to register your system at http://rt.masscec.com. Note that utilities purchasing AECs tend to buy large quantities, and they may not purchase AECs for just your system.
Federal Investment Tax Credit
Federal Investment Tax Credit
This tax credit is worth 26% of the installed cost of your solar hot water system after rebates (with no maximum). If you don’t have sufficient tax liability, you may be able to claim the credit in future years. Consult a tax professional for more information.
Federal Investment Tax Credit additional details and special requirements
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 has been extended at 26% through the end of 2022, steps down to 22% in 2023 and expires at the end of December 2023. Speak to a tax professional for advice on how best to apply this to your project.
State Renewable Energy Tax Credit
State Renewable Energy Tax Credit
The Massachusetts Department of Energy Resources administers a 15% state tax credit for installation costs for solar hot water. This credit has a maximum amount of $1,000.
State Renewable Energy Tax Credit additional details and special requirements
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
Property and Sales Tax Exemption
Solar hot water is 100% exempt from the Massachusetts sales tax (6.25%) under MGL 64H.6(dd).
Solar hot water 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
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
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