Residential Solar Investment Tax Credit
This is a personal federal tax credit for residential installations on a dwelling used as a residence by the taxpayer. The taxpayer may claim a credit of 30% on qualified solar electric expenditures through December 31, 2019. If the federal tax credit exceeds the tax liability, the excess amount may be carried forward to the next taxable year. The excess credit can be carried forward until the next tax year.
This is a federal loan program where homeowners can use energy-efficient mortgages to finance renewable energy measures, including photovoltaics, in a new or existing home. The federal government insures these loans through the Federal Housing Authority or Veteran Affairs Programs. This allows borrowers who wouldn’t normally qualify for a mortgage to pursue energy improvements.
Residential Income Tax Credit
This is a personal tax credit for the state of Massachusetts that provides a 15% tax credit against the state income tax for the entire cost of your photovoltaic system. The maximum tax credit is $1,000. The tax credit may be carried over for a maximum of three years. In order to qualify for the tax credit, the system must be new, in compliance with stipulated performance and safety standards, and must be operating for at least five years.
Commonwealth Solar II Rebates
The Commonwealth Solar II Rebate is for grid-tied photovoltaic systems for customers of participating municipal lighting plants and the following Massachusetts utility companies: Fitchburg Gas and Electric Light (Unitil), National Grid, NSTAR Electric, and Western Massachusetts Electric. The base incentive rebate is $0.40 per watt. There is a $0.05 per watt adder if the system includes components from a Massachusetts company and a $1.00 per watt National Disaster Relief Adder. There is an additional $0.40 per watt incentive for homeowners that qualify for moderate home value or moderate income. The maximum rebate is $1.85 per watt. Only PV projects less than or equal to 15 kilowatts (kW) in capacity are eligible for this incentive, although the rebate amount will be based on the first 5 kW only. Brightstar Solar will take care of the entire rebate process on behalf of our customers.
Property Tax Exemption
Massachusetts provides 100% property tax exemption for a duration of 20 years on photovoltaic energy systems used to generate electricity for a residence.
Sales Tax Exemption
Massachusetts offers 100% sales tax exemption for any equipment related to a solar electricity generation to a residence. Consumers purchasing the solar equipment and services must complete form ST-12 at the time of purchase and provide that to your solar contractor.
Solar Renewable Energy Certificate (SREC)
An SREC is a tradeable certificate that represents all the positive environmental attributes of electricity generated from a solar electric system. Each time a solar system generates 1,000 kilowatt hours (1 megawatt hour) of electricity, an SREC is issued which can then be sold or traded separately. In order to qualify for SRECs, projects must be in Massachusetts and must be grid-tied systems under 2 megawatts (DC).
The price of SRECs is established mainly by market availability, although the Department of Energy Resources (DOER) has created some market stability by creating a state Solar Credit Clearinghouse Auction (where prices are fixed at $300/MWh minus a 5% administrative fee), as well as the Solar Alternative Compliance Payment (SACP) for the state RPS (set at $550/MWh for 2012 and 2013). The Solar Credit Clearinghouse will only be used if and when SREC generators cannot sell their SRECs on the open market; the fixed price of $285/MWh will act as the price floor or the lowest price you will receive for an SREC. The SACP will be the ceiling on the value of SRECs since it will be the per-MWh payment that electricity suppliers must make if they fall short of the SRECs they need to meet their RPS obligation. Solar generators will participate in this program via an “opt-in” agreement, which guarantees participation for a set number of years. In 2012, the “opt-in” arrangement is for 40 quarters. There is not a definitive ruling if SREC income is taxable. We recommend you speak to your tax accountant or lawyer for more information on tax implications.
Utility-sponsored Loan and Solar Rebate Programs
There are a few other utility loan and rebate programs that are available for the state of Massachusetts, provided by municipal and utility companies, for photovoltaic systems. Please check the DSIRE website for more information on these programs.
Net metering is open to customers of investor-owned utilities in Massachusetts. Municipal utilities are not mandated to offer net metering, but can do so voluntarily. Net metering allows customers to get credit for the full retail value of the electricity their solar electric system generates. Under this agreement, the customer’s electric meter tracks the surplus electricity generated by the solar electric system and the electricity that the customer consumes. The customer is only billed for the net amount of electricity they use.