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

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

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

Solar incentives mitigate the cost of installing a solar panel system on your home. This category of financial incentives is intended to encourage more Americans to switch their home over to renewable energy. Various types of incentives, such as discounts, cash back or monthly utility bill credits, may be available to you. Some incentives may be provided via the state of Massachusetts, by your utility company or by county or municipality, while other incentives are federal. Some solar incentives you might qualify for are:

• Tax Exemptions: Your solar panels could qualify for both sales tax and property tax exemptions. Sales tax exemptions are effective at the time of purchase. Property tax exemptions allow you to ignore the value added by your solar panels when calculating property taxes on your house.
• Rebates: Solar companies may help you claim a rebate, or partial refund after purchase, for your solar system. States or counties will also offer limited-time rebates at various times. If you receive a rebate, that amount will usually be deducted from the total price before any tax credits are calculated.
• Tax Credits: Unlike tax deductions, tax credits reduce, dollar-for-dollar, the amount of income tax that you owe the government.
• Net Metering: Net metering is an incentive you can get once your solar system is up and running. If you've signed a net metering agreement with your Chelsea utility company, it will subtract the value of the excess energy produced by your solar system from your monthly utility bill. In some areas, this credit is dollar-for-dollar, while in other areas you may get refunded a percentage of the value.
• Solar Renewable Energy Certificate (SREC): SRECs can be sold to your utility company (or other buyers) for cash that is generally considered part of your taxable income. Generally, there is a small threshold of energy production to meet before your solar system is eligible for SRECs or similar performance-based incentives. These kinds of incentives are typically handled by your state government.

Federal Solar Incentives

Federal incentives are the type of incentives that you are most likely to have some knowledge of. The Federal Solar Investment Tax Credit, or ITC, is probably the most commonly known federal solar incentive. The ITC provides you with a tax credit for a set percentage of your solar system's cost.

The ITC can be applied to the total cost of solar system installation, including the panels themselves as well as labor, equipment and accessories. You can claim this credit for panels installed after January 1, 2006 on a primary or secondary residence that you own, as long as it is located in the United States. 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.

Wondering how the ITC applies to your specific situation? Get in touch with your local Chelsea solar panel installation expert to get more information.

The Inflation Reduction Act, passed in August 2022, added more provisions to the ITC (as well as renaming it to the Clean Energy Credit). The Clean Energy Credit re-raises the credit up to 30% for solar systems installed between 2022 and 2032. At this point, the percentage will be reduced slightly each year until the end of the program in 2035. Starting in 2023, it will also be easier to qualify for credits for energy storage systems under this new program.

More information about the new Inflation Reduction Act can be found here. The best way to fully understand how the new Clean Energy Credit applies to you is to get in touch with your local Chelsea solar panel installers.

State & Local Solar Incentives

Federal solar incentives are not your only option; tax credits, rebates and more are often offered at the state and local level. These incentives may be handled by your county or municipality, or by the Massachusetts government. Certain incentives are ongoing, while others are available for a limited time.

Next Steps for Installing Solar in Chelsea

There are many kinds of solar incentives: those given by the federal government, those given by the Massachusetts government and those given by local utility companies, to name a few. The use of solar energy has increased enormously in the last 15 years, partially thanks to these incentives. Your local Chelsea solar panel installer can give you more information about which incentives you may qualify for, and get you feeling good about making the change to renewable energy today.