2023 Solar Incentives Guide for Cambridge, MA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Cambridge.
You'll learn about:
- Local & State Solar Incentives
- Federal Tax Credits (Updated for 2023 and beyond)
- Ways to optimize your solar investment
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What Solar Tax Credits, Incentives, and Rebates are Available in Cambridge?
Renewable Energy Property Tax Exemption
Wind, hydroelectric, geothermal, solar thermal, solar PV, and other solar energy systems: the assessed value of the system
Residential Renewable Energy Income Tax Credit
Renewable Energy Equipment Sales Tax Exemption
Alternative Energy and Energy Conservation Patent Income Tax Deduction (Personal)
Cape Light Compact- Residential Energy Efficiency Rebate Program
Refrigerator and Freezer Recycling: $125
Electric Clothes Dryers: $50
Clothes Washer: $350
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
Advanced Power Strips: Varies
Limited Time Enhanced Incentive: 75%
Year-Round Tenant Incentive: 100%
Enhanced Residential Program: 100%
Home Energy Assessment: Free
Solar Massachusetts Renewable Target (SMART) Program
Mass Solar Loan Program
Residential and Small-Scale Ground-Source Heat Pump Rebate Program
Retrofit Existing GSHP Rebate: varies with installation costs
Commonwealth Woodstove Change-Out Program
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
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
Solar Renewable Energy Certificates (SREC-II)
Federal Residential Renewable Energy Tax Credit
The phrase "solar incentives" refers to a range of financial incentives implemented to make installing and using solar panels more affordable. This is done to encourage people to switch to renewable energy. Various kinds of incentives, such as discounts, cash back or monthly utility bill credits, may be available to you. Some incentives may be handled by the state of Massachusetts, by your utility company or by county or municipality, while other incentives are federal. Types of solar incentives might include:
- Rebates: Some solar companies will help you claim a rebate, or partial refund of your purchase, for your solar panels. States or counties will also sometimes offer limited-time rebates. The value of a rebate will usually be deducted from your total price before any tax credits are calculated.
- Net Metering: Net metering factors in after your solar panels are up and running. If you've signed a net metering agreement with your Cambridge utility company, the company will subtract the value of the excess energy your solar system produces from your monthly utility bill. In some locations, this is a dollar-for-dollar credit, while in others you might make back a percentage of the value.
- Tax Exemptions: Your solar panel system could qualify for exemptions on both sales and property tax. Sales tax exemptions are applied 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 house.
- Solar Renewable Energy Certificate (SREC): SRECs and similar performance-based incentives are usually handled at the state level. Once your solar panel system meets the threshold (usually a small amount of energy production), you are eligible to receive SRECs that you can then sell to your utility company or other buyers. The money you receive from the sale is usually considered part of your taxable income.
- Tax Credits: Unlike tax deductions, tax credits reduce, dollar-for-dollar, the amount of income tax that you owe the government.
Federal Solar Incentives
When someone says "solar incentives," you probably think of federal incentives first. The Federal Solar Investment Tax Credit, or ITC, is the most commonly known federal solar incentive. The ITC provides a tax credit for a set percentage of your solar system's cost.
The ITC covers solar systems installed after January 1, 2006 and lets you deduct from your taxes a percentage of the total cost of solar panels, labor, accessories and equipment. This credit can apply towards a solar panel system installed on a primary or secondary residence that you own in the United States. Originally, you could claim 30% of the total cost, although certain projects may qualify for only 26%, depending on the details. There is no maximum amount you can claim.
To best understand how the ITC might apply to your situation, call your local Cambridge solar panel installer and ask for more information.
The ITC has been renewed and expanded following the passage of the Inflation Reduction Act in August 2022. It's also now called the Clean Energy Credit. For solar system installations that begin after January 1, 2022 and are completed by the end of 2032, homeowners may be eligible for a credit equal to 30% of the total cost. This percentage will decrease annually after 2032 until the Clean Energy Credit expires in 2035. Starting in 2023, the program expansion will also make it easier to get credit for energy storage systems.
Click here to learn more about the new Inflation Reduction Act. To best understand how the new Clean Energy Credit will apply to you, get in touch with your local Cambridge solar installation company.
State & Local Solar Incentives
Some solar incentives are often also provided by state and local governments. As with federal incentives, these may include rebates, tax credits and more. Some incentives are ongoing, while others are available for a limited time. Incentives may be offered by your county or municipality, or by the Massachusetts government.
Next Steps for Installing Solar in Cambridge
Nationwide solar energy use has gone up significantly in the past 15 years, in part thanks to the proliferation of solar incentives. You can obtain these incentives from the Massachusetts government, the federal government or your local utility company. Reaching out to your local Cambridge solar panel installation company is the best first step towards getting the most money possible when you switch to solar energy.
EcoWatch's Cambridge, MA Solar Incentives FAQs
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.