Income-Based Loan Support Encourages Solar For All
The Mass Solar Loan program and especially a feature called Income-Based Loan Support (IBLS) makes solar more affordable to Massachusetts residents by paying off a percentage of the loan. To qualify, you must meet income guidelines based on your household size. The loan program is the successor to the Commonwealth Solar II rebate program which provided a cash incentive to solar projects. Cash rebates provide more benefit to affluent residents while the loan program and income-based loan support would promote solar within lower and middle-income homeowners.
Income-Based Loan Support is an innovative feature of the Massachusetts Solar Loan program and may be the most significant as it relates to return on investment of a solar project. A system owner may qualify for 20% or 30% loan support based on their household’s Adjusted Gross Income (AGI) as documented by their tax return and household size. For example, if person’s household AGI was $75,000 for a family of four, he would be eligible for 30% loan support, or 30% of the cost would be paid.
To see if you qualify for the Income-Based Loan Support in Massachusetts, please see the chart below:
|Income-based Thresholds by Household Size|
|Household Size||Category 1
Below 80% of State Median Income
(Eligible for 30% reduction of loan principal)
Below 120% of State Median Income
(Eligible for 20% reduction of loan principal)
In addition to Income-Based Loan Support (IBLS), Massachusetts solar owners may also apply for a 30% Federal Renewable Energy Tax Credit and a $1,000 capped Massachusetts Solar and Wind Tax Credit. If a family qualifies for IBLS and the tax credits, they could end up paying only 50% or less of the project cost. In addition to electric bill savings, Massachusetts homeowners can also receive and sell Solar Renewable Energy Credits for the next ten years. All incentives factored in, Brightstar Solar has been able to provide as low as a four-year payback for a solar investment while a system can last 25 years or more! Utilizing the Massachusetts-subsidized loan program, this resident will see savings right away with no money down and a low, fixed interest rate.
The Mass Solar Loan program provides loans to all residents regardless of income, with loans amounts ranging from $3,000 to $60,000 and terms ranging from 5 to 10 years to homeowners and renters throughout the state. To be eligible, a Massachusetts homeowner or renter must have a residential electric rate code, the system must meet minimum technical standards, and it must be built by an approved installer, such as Brightstar Solar.
Massachusetts did an extensive study of existing solar financing methods to come up with a program that would be more accessible to borrowers with lower incomes and/or credit scores through interest rate buy down and funding of a loan loss reserve. As of October 17th, 2016, the Mass Solar Loan program will buy down the annual interest rate paid by solar system owners by 1.5%. The interest rate buy down is open to all residents and is not based on income. The loan loss reserve incentive can be requested by Commonwealth residents with less than perfect credit.
The combination of the Mass Solar Loan and Incentive-Based Loan Support with Federal and State Tax credits and Solar Renewable Energy Credits have made Massachusetts the ideal setting to appreciate the economic benefits of a home solar installation. Rising electricity costs are also a large factor, with state energy costs rising 25% in the last 5 years. To see if you qualify for Income-Based Loan Support and the Mass Solar Loan, please reach out to Brightstar Solar for a free evaluation of your site.