Residential Solar Investment Tax Credit
This is a personal federal tax credit for solar panels installed on a home used as a residence by the taxpayer. The taxpayer may claim a credit of 30% on qualified solar electric expenditures through December 31, 2016. There is no cap on this tax credit through the end of 2016 and the bill allows individual taxpayers to use the credit to offset their Alternative Minimum Tax liability. 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 2016, but it is undetermined if the unused tax credit can be carried forward after then.
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.
Mass Solar Loan
The Mass Solar Loan program offers a low, fixed interest loan to qualified residential solar projects through approved installers. The advantage of this Massachusetts home solar incentive is a homeowner or renter may receive an interest rate buy-down, loosened credit restrictions, and income-based loan support. Brightstar Solar is a pre-qualified Mass Solar Loan installer.
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 solar (PV) 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.
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.
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.
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, as well as the Solar Alternative Compliance Payment (SACP) for the state RPS . 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 solar (PV) 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.