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Solar Incentives and Rebates in massachusetts

Peak Sun Hours (PSH): 4.3 - 4.5
Cost of Grid Power: $0.22/kWh
Number Of Installations: 104,528

Data from DSIRE. For more info visit: https://www.dsireusa.org/

Name Implementing Sector Program Type Administrator DSIRE ID
Residential Renewable Energy Income Tax Credit State Personal Tax Credit Massachusetts Department of Energy Resources (DOER) 144
Alternative Energy and Energy Conservation Patent Income Tax Deduction (Corporate) State Industry Recruitment/Support Massachusetts Department of Revenue 149
Alternative Energy and Energy Conservation Patent Income Tax Deduction (Personal) State Industry Recruitment/Support Massachusetts Department of Revenue 229
Solar Easements & Rights Laws State Solar/Wind Access Policy 301
Cape Cod & Martha's Vineyard - Green Power Purchasing Local Green Power Purchasing 307
Medford Solar Program Utility Grant Program 349
Fuel Mix and Emissions Disclosure State Generation Disclosure 480
Green Power Purchasing State Green Power Purchasing 930
Appliance Efficiency Standards State Appliance/Equipment Efficiency Standards 1567
Local Option - Energy Revolving Loan Fund State PACE Financing Programs administered locally 4283
Residential & Small-Scale Solar Hot Water Program State Rebate Program Massachusetts Clean Energy Center (MassCEC) 4557
Commercial Solar Hot Water Rebate Program State Rebate Program Massachusetts Clean Energy Center 4962
City of Lowell - BLEU Projects Program Local Rebate Program 5289
Taunton Municipal Lighting Plant - Residential and Non-Profit Weatherization Program Utility Rebate Program Taunton Municipal Light Plant 5319
Solar Renewable Energy Certificates (SREC-II) State Performance-Based Incentive Massachusetts Department of Energy Resources 5515
Residential & Small-Scale Air-Source Heat Pump Program State Rebate Program Massachusetts Clean Energy Center 5635
Residential & Small-Scale Ground-Source Heat Pump Program State Rebate Program Massachusetts Clean Energy Center 5636
Residential & Small-Scale Biomass Heating Program State Rebate Program Massachusetts Clean Energy Center 5644
Solar Renewable Energy Certificates (SREC-I) State Solar Renewable Energy Credit Program 5678
Solar Renewable Energy Certificates (SREC-II) State Solar Renewable Energy Credit Program 5679
Mass Save - Small Business Direct Install Program Utility Rebate Program 5828
Mass Solar Loan Program State Loan Program 5850
City of Boston - Green Building Standard Local Energy Standards for Public Buildings Environment, Energy, and Open Space Cabinet 5919
Columbia Gas of Massachusetts - Medium and Large Business Energy Efficiency Programs Utility Energy Analysis 13947
National Grid - Existing Facility Incentives Utility Energy Analysis National Grid 13957
National Grid - Energy Profiler Online Utility Energy Analysis National Grid 14078
Holyoke Gas & Electric - Commercial Energy Audits Utility Energy Analysis 16193
Massachusetts Executive Office of Energy and Environmental Affairs - Energy Efficiency Assistance for Business State Energy Analysis 16282
Massachusetts Office of Technical Assistance and Technology - OTA Software Programs State Energy Analysis 16286
Massachusetts Office of Technical Assistance and Technology - OTA Energy Publications State Energy Analysis 16287
National Grid - Power Quality Enhancements Program Utility Other National Grid 17458
Massachusetts Division of Energy Resources - Green Business Development State Energy Analysis 17470
Berkshire Gas - GasNetworks Commercial & Industrial High Efficiency Heating Rebate Program Other Energy Analysis 17478
National Grid - Demand Response Utility Energy Analysis National Grid 17480
National Grid - Enhanced Metering Utility Energy Analysis National Grid 17481
Massachusetts Division of Energy Resources - Education and Outreach Programs for Businesses State Energy Analysis 17573
Massachusetts Division of Energy Resources - Municipal Energy Efficiency State Energy Analysis 17574
Massachusetts Office of Technical Assistance and Technology - Energy Efficiency for Businesses & Institutions State Energy Analysis 17727
Massachusetts Division of Energy Resources - Assessments and Audits State Energy Analysis 20099
Columbia Gas of Massachusetts - Small Business Energy Efficiency Program Utility Energy Analysis 20123
Taunton Municipal Lighting Plant - Net Metering Other Other 20625
National Grid - Massachusetts Energy Efficiency Services Utility Energy Analysis 21157
National Grid - Rhode Island Energy Efficiency Services Utility Energy Analysis 21171
National Grid - Construction Program Utility Energy Analysis 21187
Unitil - Energy Saving Tips Utility Training and Information Unitil 21571
ISO New England - Demand Resources Other Energy Analysis ISO New England 21671
Northeast Energy Efficiency Council - Building Operator Certification (BOC) Other Training and Information Northeast Energy Efficiency Council 21674
Northeast Energy Efficiency Partnerships - EM&V Forum Non-Profit Training and Information Northeast Energy Efficiency Partnerships 22020
Commercial Biomass Heating Grant Program State Grant Program Massachusetts Clean Energy Center 22036
Local Option - Commercial PACE Financing State PACE Financing Massachusetts Development Finance Agency 22037
Residential and Small-Scale Ground-Source Heat Pump Rebate Program State Rebate Program Massachusetts Clean Energy Center 22052
Commercial-Scale Ground-Source Heat Pump Rebate Program State Rebate Program Massachusetts Clean Energy Center 22053
Commercial-Scale Ground-Source Heat Pump Grant Program State Grant Program Massachusetts Clean Energy Center 22054
Solar Massachusetts Renewable Target (SMART) Program State Performance-Based Incentive Department of Energy Resources / CLEAResult 22111
Energy Storage Target State Energy Storage Target 22113


What’s the Cost of Solar in Massachusetts?

Cost of Grid Power

Massachusetts has the 4th-highest electricity prices in the U.S., at $0.22/kWh. This is an increase of about 15% in the past 5 years.

This is partly because the state does not burn coal for power, and oil is less than 2% of the state’s power generation. In 2018, Massachusetts generated 67% of its electricity from natural gas, and almost all of the rest from nuclear power and renewables.

Ironically this means you can save the most by switching to solar in Massachusetts! In 2018 the new RPS law protected homeowners with solar from utility companies who wanted to charge those homeowners just for maintaining a grid connection. This essentially means that if you invest in solar for your home, your investment is safe.

Cost of a Solar Install

Cost of a typical 6kW PV install in Massachusetts, 2004-2018

A graph of falling prices for a typical 6kW PV install in Massachusetts from 2004 to 2018.
Figures include design costs. Data from MassCEC.

Some other ways to frame the cost: the median cost per watt of a solar install in the state is $3.85, and the median power output of a MA residential system is 8.1 kW. The Massachusetts Clean Energy Center counts nearly 12,000 residential solar installs in the state.

The average cost of a grid-tied, 6kW solar system starts around $21,000. (This is equivalent to saving roughly 100 trees a year!) Without any incentives, in the first year you’d save about $1,700, compared to if you had been paying the normal rates for the energy you used.

With a federal tax credit, a state tax credit capped at $1,000, and SMART incentives at roughly $0.15/kWh, in a best-case scenario you could offset about half the cost of your system in the first year, bringing the net cost down to roughly $10,100. From there, with only continued SMART incentives (for the first 10 years) and savings from lower power bills, you could expect for the system to pay for itself in as few as 6 years.




Just How Much Can I Save With Solar in Massachusetts?

This depends on may factors such as your system size, power output, and financing. Here are the three main ways you can finance your home solar power system, and the kinds of returns you may expect to see:

Out-of-Pocket

From our example above, the homeowner purchased a 6.2kW grid-tied system to offset their energy bill. Overhead cost was $21,080, with roughly half of that returned in the first year through incentives, rebates, and savings, then paying itself in full over 6 years.

Most solar power systems have a warranty lifetime of 25 years. In that time, between incentives and paying lower rates you could make a profit of around $47,000 - more than twice the up-front cost of the system! Even with occasional maintenance or part replacement, that is a massive savings. Solar panel power output falls on average 0.8% per year, so with a little TLC and load management you can extend the life of your system well beyond the warranty’s expiration date, continuing to save indefinitely.

Keep in mind that in this scenario the system is paid for, in full, out-of-pocket. If, like most of us, you don’t have $21,000 to spend on home improvement, a variety of financing options are available.

Solar Loan

Whether or not you can afford the up-front cost of the install, you may want to consider a Home Equity Line of Credit (HELOC). With equity in your home, or good credit, you may qualify for a 15-year solar HELOC with fixed rate of 4% or lower.

Starting with that same 6.2kW system costing $21,080, with energy savings of around $1,700, a federal tax credit of 26%, a state tax credit of $1,000, SMART incentives at roughly $0.15/kWh, and no cost up front, you will have a revenue surplus of about $7,000 at the end of the first year.

Over time your profit will be less as some of the energy savings is used to pay off the loan. Over 25 years you could expect to make nearly $37,000.

Power Purchase Agreement

With a Power-Purchase Agreement (PPA) the homeowner leases their roof to an outside party, usually a power company. Generally PPAs feature a fixed price per kWh, with either a fixed term or an annual escalator.

With a PPA, the cost of installation, repair, and maintenance to the homeowner is usually $0.00. For that 6.2kW system, with a PPA you could expect to save about $63/month on energy. Over 25 years, you could see over $19,000 in revenue before accounting for inflation. That’s technically an infinite return!

PPA’s can be complicated, as you are effectively ceding at least some control of your home to the third party, but they are an excellent way to get into solar because they have no overhead.




Other Considerations

Interconnection

The The Massachusetts Department of Public Utilities (DPU) regulates interconnection, the process by which homes are connected to the grid. For homes which will be supplying power to the grid instead of only drawing from it, there are a few extra steps to go through.

Before connecting a solar power system to the grid, residents must get written approval from the utility in two documents: the “Interconnection Service Agreement” and “Authorization to Connect.”

ELECTRICAL CODE

All solar photovoltaic (PV) installations must comply with the Massachusetts Electric Code. If an installation results in a structural change of a building, the system must also comply with the Massachusetts Building Code.

Make sure you are familiar with the Electric, and if necessary the Building Codes, before installing a PV system. If you hire licensed installers, they should be aware of the Codes as well. The installation contractor will secure all necessary approvals from the necessary parties. You can also make sure your payment schedule allows payment to be withheld unless the installed system passes local code inspections.

Here is a guide from the Massachusetts Clean Energy Center that gives a great bird’s-eye view of the resources available to you.




Resources

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