Solar Power Rebates, Tax Credits and Solar Panel Incentives in Massachusetts; 2012 Update
Massachusetts has made a few modifications recently to its solar power incentives.
Massachusetts RPS or Renewable Portfolio Standard
Massachusetts Renewable Portfolio Standard Act ("RPS"); has set targets for renewable energy on a sliding scale too reach 15% by 2020. The percentage increases gradually until 2020. This is the reason why rebates and incentives are being offered by utilities companies, and why the government has funded the rebates available, to ensure that these targets are met.
Federal Tax Credit
The single most significant financial incentive for your solar power system in Massachusetts is the same Federal Tax Credit that applies right across the USA. This gives you a credit on your Federal Tax bill equivalent to 30% of the cost of your solar system For more information on this visit out page "The 30% federal tax credit for residential solar power systems" Because this is a tax credit you get the benefit of this when you do your next federal tax return, rather than getting a cheque on the day of installation. Still, it has a real value if you are in a position where you are paying annual federal income tax equivalent to 30% or more of the value of your solar panel system.
Massachusetts State Rebates
There are various state rebates available through the Utilities and customers should check in with their local Utilities and or local government departments. The Massachusetts Municipal Wholesale Electric Company (MMWEC) provides the Home Energy Loss Prevention Services (HELPS) Program to seventeen municipal utilities in Massachusetts. This involves an energy audit, and recommendations are then given as to available solutions and any rebates or funding available. The following municipalities offer HELPS rebates: Ashburnham, Boylston, Chicopee, Holyoke, Hull, Ipswich, Marblehead, Paxton, Princeton, Russell, Shrewsbury, South Hadley, Sterling, Templeton, Wakefield, and Westfield. Please check the MuniHELPS list of rebate programs to verify programs and to download each utility's rebate application. The best way to get the most up to date information on the rebate levels is to use the facility here to get free quotes from installers who service your area and know the state of play with your local utility. Commonwealth Solar II, offered by the Massachusetts Clean Energy Center (MassCEC), provides rebates for the installation of grid-tied photovoltaic (PV) systems. Commonwealth Solar II rebates are available to electricity customers served by the following Massachusetts utilities: Fitchburg Gas and Electric Light (Unitil), National Grid, NSTAR Electric and Western Massachusetts Electric. In addition, customers of certain municipal lighting plant (MLP) utilities are now eligible including Ashburnham, Holden, Holyoke, Russell, and Templeton.
All rebate applications must be approved BEFORE the project installation begins.
Rebate amounts are based on the total PV system size per building. The proposed Commonwealth Solar II rebate levels for residential and commercial PV systems are:
- Base incentive: $0.40/watt
- Adder for Massachusetts company components: $0.05/watt
- Adder for moderate home value: $0.40/watt (applicable to residential projects only), or
- Adder for moderate income: $0.40/watt (applicable to residential projects only)
- Natural Disaster Relief Adder, only for projects completed in the Springfield area impacted by June 1, 2011 tornado: $1.00/watt
The rebate is available to the system owner. Solar renewable-energy credits (SRECs) associated with system generation belong to the system owner and may be sold via the Department of Energy Resources (DOER) SREC program. System installers are responsible for the application process and securing necessary permits. It is recommended, but not required, that installers or their subcontractors obtain or seek to obtain North American Board of Certified Energy Practitioners (NABCEP) PV installer certification. This summary does not capture all of the requirements of the Commonwealth Solar II program. The MassCEC provides program manuals as well as appendices with full program requirements and you must read those materials carefully.
Ongoing Incentives for Solar Power in Massachusetts: Payment for your electricity you feed into the grid.
The Massachusetts Department of Energy Resources (DOER) regulates the RPS and developed corresponding rules. The best thing about the Massachusetts RPS is that it contains a specific solar power carve out, and this is very good news for those looking to go solar. It has also led to Solar Renewable Energy Certificates or SRECS, the price of SREC's is determined by the market. SREC's are traded on the Solar Credit Clearinghouse Auction and have an effective floor price of $300/MWh. The Solar Carve-Out program is intended to support around 400 MW of solar power in Massachusetts. Once the state reaches that goal, and the opt-in term for all solar facilities has expired, SRECs will no longer be generated. Solar facilities will at that time generate renewable energy credits (RECs) and will be able to sell those for compliance under the Class I standard.
Net Metering means that your electricity provider will monitor how much power you consume from the grid and how much power you generate and send back to the grid. This is achieved by the installation of a bio-directional meter that separately records what you buy from the grid and what you push back into the grid. The amount of kilowatt hours you feed back into the grid is subtracted from the amount of kilowatt hours you have purchased from the grid in each billing period. So if you used 1000 kwh in a period and sent 300 kilowatt hours into the gird during the day when you weren't using much power at home, then your utility will only bill you for 700 kilowatt hours. Not all utilities give a 1:1 credit of kwh's. Some only give a fractional credit i.e 90%. In this case, on the example above, only 270 kwh would be credited to the customer bill even though they fed 300 kwh into the grid. You can look on the SCE, PGE and SDGE websites for their net metering policies. Alternatively you can use our quote form "here" to get quotes from solar panel installers that know the policies of your utility. At the end of 12 months any net surplus you've accumulated can either can held as a credit towards bills indefinitely, or the utility will write you a cheque at the 12-month average price for electricity between 7am and 5pm. Just make sure you tell the utility which option you want! If you forget to make an affirmative choice your credit reverts back to the utility without compensation. The real value of net metering is that the value you get for the power that you feed back into the grid will increase in time as the retail price of power increases.
Massachusetts State Tax Exemptions and State Tax Credits
In Massachusetts you have a property tax exemption for your solar PV system for 20-year period if a system owner enters into an agreement with the city or town to make a payment (in lieu of taxes) of at least 5% of its gross income in the preceding calendar year. This incentive applies only to the value added to a property by an eligible system, according to the Massachusetts Department of Energy Resources (DOER). It does not constitute an exemption for the full amount of the property tax bill. Any components of the energy system that serve dual purposes (for example: structural and energy) are not eligible for the exemption. Massachusetts law exempts from the state's sales tax "equipment directly relating to any solar, wind powered; or heat pump system, which is being utilized as a primary or auxiliary power system for the purpose of heating or otherwise supplying the energy needs of an individual's principal residence in the commonwealth."
Massachusetts Solar Incentives and investment case: Summary May 2012
Massachusetts has a very good overall package of incentives to help meet its solar targets. This has created a good rate of solar power take up in the state and the strong take up should continue. It has a particular Solar Power carve out written into the RPS so this will ensure residents who are wishing to take up solar power will have incentives available for many more years. It's our opinion that a solar power system for your home in Massachusetts is a financial no brainer. Remember, Warren Buffet's compound annual return on investment over 50 years is only around 20% and with a solar power system you are likely to exceed this within only 5-6 years. From then on the percentage return you get each year just goes up and up as power prices go up and up over the next 30 years Go on if you have read this far why not go ahead and get some quotes from local solar power experts