2023 Solar Incentives Guide for Boston, MA - Tax Credits & Rebates

In this guide, we'll cover the latest solar incentives and rebates available in Boston.

You'll learn about:

  • Local & State Solar Incentives
  • Federal Tax Credits (Updated for 2023 and beyond)
  • Ways to optimize your solar investment

Solar installers are experts in maximizing your solar tax credits and rebates.
Get a free quote from one of our trusted Boston solar installers to see how much you can save.

By EcoWatch Local Advisors

Data Analysis: James Savino

Ranking Methodology: Karsten Neumeister

Updated September 15, 2023

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We work with a panel of solar experts to create unbiased reviews that empower you to make the right choice for your home. No other site has covered renewables as long as us, which means we have more data and insider information than other sites. Our rankings are never affected by revenue or partnerships.

What Solar Tax Credits, Incentives, and Rebates are Available in Boston?

Renewable Energy Property Tax Exemption

Incentive Type:
Property Tax Incentive
Solar energy systems used for heating or cooling: out-of-pocket expenditures by the owner for the components and labor
Wind, hydroelectric, geothermal, solar thermal, solar PV, and other solar energy systems: the assessed value of the system

Residential Renewable Energy Income Tax Credit

Incentive Type:
Personal Tax Credit

Renewable Energy Equipment Sales Tax Exemption

Incentive Type:
Sales Tax Incentive
100% exemption

Alternative Energy and Energy Conservation Patent Income Tax Deduction (Personal)

Incentive Type:
Industry Recruitment/Support
100% deduction

Cape Light Compact- Residential Energy Efficiency Rebate Program

Incentive Type:
Rebate Program
Appliances
Refrigerator and Freezer Recycling: $125
Electric Clothes Dryers: $50
Clothes Washer: $350
Dehumidifiers: $30
Room Air Purifiers: $40
Room Air Conditioner: $40

Heating & Cooling
Oil Heating System: Up to $800
Propane Heating Equipment: Up to $2,300
Oil Water Heater: Up to $400
Propane Water Heater: Up to $800
Heat Pump Water Heater: Up to $600
Central AC/Heat Pump: Up to $250/ton
Mini-Split Heat Pump: Up to $250/ton
Programmable Thermostats: Up to $25
WiFi Thermostat: Up to $100
Solar Domestic Hot Water heater: $500 - $1,500

Home Electronics
Advanced Power Strips: Varies

Home Insulation
Limited Time Enhanced Incentive: 75%
Year-Round Tenant Incentive: 100%
Enhanced Residential Program: 100%

Lighting
LEDs: Varies

Home Energy Assessment: Free

Mass Save - HEAT Loan Program

Incentive Type:
Loan Program
$25,000 ($50,000 for some expanded HEAT offerings)

Solar Massachusetts Renewable Target (SMART) Program

Incentive Type:
Performance-Based Incentive
(Base compensation rate + compensation rate adders - greenfield subtractor) * total kWh generated - value of energy generated

Mass Solar Loan Program

Incentive Type:
Loan Program
Maximum required: $35,000; maximum possible: $60,000

Residential and Small-Scale Ground-Source Heat Pump Rebate Program

Incentive Type:
Rebate Program
New GSHP Rebate: $2,000 per ton with adders to eligible applicants
Retrofit Existing GSHP Rebate: varies with installation costs

Commonwealth Woodstove Change-Out Program

Incentive Type:
Rebate Program
Standard Residential:
Pellet Stove: $1,000 - $1,750
Catalytic Woodstove: $750 - $1,250
Non-Catalytic Woodstove: $500-$1,250

Fully Automated Wood Stove: $1,500 - $1,750
Low-Income Residential:
Pellet Stove: $2,500 - $3,250
Catalytic Woodstove: $2,250 - $2,750
Non-Catalytic Woodstove: $2,000-$2,750
Fully Automated Wood Stove: $2,750 - $3,250

Local Option - Energy Revolving Loan Fund

Incentive Type:
PACE Financing
Financing amount locally determined; 20-year financing term

Solar Renewable Energy Certificates (SREC-II)

Incentive Type:
Solar Renewable Energy Credit Program
Varies, depending on market supply and demand

Federal Residential Renewable Energy Tax Credit

Incentive Type:
Personal Tax Credit
30% federal tax credit for systems placed in service after 12/31/2021 and before 01/01/2033. Good for: solar water heat, solar photovoltaics, biomass, geothermal heat pumps, wind (small), fuel cells using renewable fuels.

Source: https://www.dsireusa.org/


Solar incentives help mitigate the cost of installing solar panels on your home. This category of financial incentives is designed to encourage more people to make the switch to renewable energy. These incentives may include upfront discounts, cash back or credit towards your monthly utility bill. Some incentives are provided by the federal government, some by the state of Massachusetts and some by your utility company, county or municipality. Some solar incentives you might qualify for are:

  • Rebates: Solar rebates might be provided by your local utility company, or by your county or state. These rebates are essentially partial refunds that are applied after your purchase of a solar system and before tax credits are calculated.
  • Net Metering: You can sign a net metering agreement with your Boston utility company, that may apply to all or a percentage of the excess electricity that is generated by your solar panels. They will then deduct this value from your monthly utility bill.
  • Solar Renewable Energy Certificate (SREC): SRECs and other performance-based incentives may be available to you if your solar system produces more than a specified (generally small) amount of electricity. These types of incentives are normally handled at the state level. You can sell the SRECs you receive to your utility company or other buyers, and the money you receive in return is usually considered part of your taxable income.
  • Tax Exemptions: Your solar panels could qualify for exemptions on both sales and property tax. Sales tax exemptions come into effect at the time of purchase. Property tax exemptions allow you to exclude the added value of the solar panels when you are calculating property taxes on your home.
  • Tax Credits: Unlike tax deductions, tax credits reduce, dollar-for-dollar, the amount of income tax that you owe the federal government.

Best National Provider

SunPower

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  • Most efficient panels on the market
  • National coverage
  • Cradle to Cradle sustainability certification
  • Great warranty coverage
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  • Customer service varies by local dealer

Best Regional Coverage

Momentum Solar

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4.5

  • Great warranty coverage
  • Representatives are experts on local policies
  • Concierge service ensures steady communication
  • Slightly limited service offerings

Best for Leasing

Sunrun

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4.0

  • Expansive service area
  • Many financing options
  • Some reported issues with customer service
  • Some reported issues with door-to-door sales

Federal Solar Incentives

When people think of solar incentives, federal incentives might be the first thing that comes to mind. The Federal Solar Investment Tax Credit, or ITC, is probably the most well-known federal solar incentive. The ITC offers a tax credit for a specific percentage of the cost of your solar system.

The ITC can be applied to the total cost of installing solar panels, including the panels themselves as well as labor, accessories and equipment. This credit can be claimed for panels installed after January 1, 2006 on a primary or secondary residence located in the United States that you own. Originally set at 30% of total costs, the credit has fluctuated over time, and you may qualify for different amounts depending on when your project was completed. There is no maximum claim amount.

Your local Boston solar panel installer can give you more information about the ITC and how it may apply to your situation.

In August 2022, the Inflation Reduction Act expanded and extended the ITC, now titled the Clean Energy Credit. The new Clean Energy Credit extends until 2035. Homeowners can now apply for a 30% credit for solar systems that began installation on or after January 1, 2022 and will be done by December 31, 2032. This credit will then be decreased by a few percentage points every year until its expiration. The expansion to the program also makes credits for energy storage systems even easier to claim, beginning in 2023.

More information about the new Inflation Reduction Act can be found here. Your local Boston solar panel installer can answer any questions you have and explain how the new Clean Energy Credit applies to you.

State & Local Solar Incentives

Some solar incentives are often also offered at the local or state level. Similar to federal incentives, these might include rebates, tax credits and more. Incentives might be offered by your county or municipality, or by the state of Massachusetts. Some incentives are available for only a limited time, while others are ongoing.

Next Steps for Installing Solar in Boston

Solar incentives might be offered by your local utility company, the federal government or the Massachusetts government. The large number of available solar incentives has helped nationwide use of solar energy increase greatly in the last 15 years. We suggest talking to your local Boston solar installation company for more information about these incentives and to be sure that you're getting the largest number possible for your solar system.

EcoWatch's Boston, MA Solar Incentives FAQs

Can I claim incentives for adding solar panels to a rental property, vacation home or commercial property?

Many solar incentives are intended to apply to a property located within the United States that you own; most secondary residences will fall into this category. Other solar incentives may be available for commercial properties, depending on the specifics. We recommend talking to your local solar installer and/or tax professional to best understand what incentives will apply to your specific situation.

How much will solar panels save me on my electric bill in Boston annually?

Generally, Boston homeowners who install solar panels save approximately $1,187.27 per year, or approximately $22,558.09 over 20 years after making the switch.

How long until the federal solar tax credit ends?

The federal solar tax credit, formerly known as the ITC and now called the Clean Energy Credit, is slated to end January 1, 2035. The current 30% credit will end in 2032, replaced by a 26% credit in 2033 and a 22% credit in 2034.

Can I apply for incentives both towards the up-front cost of solar panels, and later as reimbursement?

Yes, you can receive both tax credits and rebates towards the cost of your solar panels. Depending on precisely which incentives you are receiving, they may apply in a different order. Be sure to speak with your solar installer or a local tax professional to confirm that you are claiming the correct incentives and getting the most money possible.

Can I use both solar and another type of renewable energy to power my home?

Yes, you can use multiple types of renewable energy to power your home — for example, a combination of solar and geothermal. You can also combine renewable energy generation with a non-renewable backup source of energy. Be sure to discuss your plan with your local Boston solar panel installer, to make sure you know what you'll need and what kinds of incentives you may or may not qualify for.

Our goal is to reach as many people as we can with sensible solutions like solar energy. Our team of full-time local researchers collects solar price and installation data for every city in America then compiles it to create these digestible city guides. If you want to read our solar expert's opinion on the top solar companies featured here, follow this link.

Solar incentive research was conducted by Melissa Smith and Karsten Neumeister. Local data analysis was conducted by James Savino. See something we missed or could do better? Email the editor.

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