The financial benefits of solar in Massachusetts are easily achieved through Federal and state tax credits, tax exemptions, SRECs, and the Mass Solar Loan. There have never been more reasons to go solar, due to incentives, new financing opportunities, and technology improvements in solar panel manufacturing which have increased the equipment’s efficiency and power output while lowering cost.
The Federal government recently removed a $2,000 cap on its 30% tax credit – this means that the full 30% of the net cost of a PV system, after state and local incentives, may be refunded to you when your taxes are filed. Massachusetts offers a state-subsidized solar loan program offering a fixed, low interest rate. Additionally, there is a tax credit typically worth $1,000 in Massachusetts and systems are exempt from sales and property tax.
The combination of State and Federal incentives with the introduction of the Mass Solar Loan allows residents to go solar and reap the benefits with no money down!
SRECs (Solar Renewable Energy Credits) are an additional financial incentive for owners of solar electric generating systems. Electric utility companies are required by law to purchase these credits from the owners of PV systems which are grid-interconnected. SRECs substantially improve cash flow and other financial metrics of a system, in many cases slashing the time to breakeven in half.
Compared to other investments, a solar system is a clear winner. Over its lifetime, it should outperform conservative investments such as a savings account or bond fund, and match the historical rate of return of the stock market. However, the financial returns of a PV system (in the form of reduced electric bills) are more of a sure thing, whereas there are no guarantees when investing in stocks (the S&P 500 is essentially unchanged in the last 10 years).
A PV system for your home or business offers a locked in electric rate for that portion of your demand which is offset by your array’s production. This is not only a hedge against inflation, but a hedge against future increases in electric rates from your utility, which have been trending at more than twice that of inflation! If electric rates continue to increase at their recent rate, they will double in about 15 years. As electric rates rise, your monthly savings in the form of cash not spent on your bill will actually grow.
Speaking of cash flow, once a solar array is built and connected to your home you start reducing your electric bill immediately. Because your electric bill is lowered, in essence the cost of operating your home has decreased… and will be decreased as long as the sun shines on that system. Therefore, compared to a neighbor without solar, the value of your home actually increases because it is cheaper to pay your bills each month. Studies suggest that your home value will increase $20,000 for every $1,000 of annual electric bill savings. In most cases, this immediate increase in value is greater than the net cost of your PV system.