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

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

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

Solar incentives are meant to encourage homeowners to make the switch to renewable energy by offering incentives meant to lower the financial burden of solar panel installation and use. Different kinds of incentives, such as cash back, discounts or credit towards your monthly utility bill, may be available to you. Certain incentives may be offered by the state of Massachusetts, by your utility company or by county or municipality, while other incentives are federal. Some broad categories of solar incentives include:

• Net Metering: Net metering becomes relevant after your solar panels are up and running. If you've signed a net metering agreement with your Danvers utility company, the company will subtract the value of the excess energy produced by your solar system from your utility bill each month. In some areas, this credit is dollar-for-dollar, while in other areas you might receive a refund equivalent to a percentage of the value.
• Rebates: A rebate is a partial refund credited to your account after you've paid for your solar system. These might be offered by your local utility company, your county or your state. The cash back that you get from the rebates is normally applied before tax credits are calculated.
• Tax Exemptions: Sales tax exemptions are effective at the point of sale for your solar panels. Property tax exemptions allow you to ignore the added value of your solar system when calculating how much property tax you need to pay on your home.
• Tax Credits: Tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the government. (This is different from a tax deduction.)
• Solar Renewable Energy Certificate (SREC): In general, solar systems that produce over a specific (normally small) amount of electricity can qualify for SRECs or other similar performance-based incentives. SRECs and similar incentives are typically provided at the state level. When you receive an SREC, you can sell it to your utility company or another buyer, and generally the money you make is normally considered part of your taxable income.

Federal Solar Incentives

Federal incentives are the kind of incentives that you are most likely to have heard of. The solar incentive that you may be most familiar with is the Federal Solar Investment Tax Credit (ITC), which gives you a credit on your taxes equal to a certain percentage of your solar system's cost.

The ITC applies to the total cost of solar panel installation, including the panels themselves as well as equipment, accessories and labor. You can claim this credit 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.

Curious how the ITC might apply to your specific situation? Get in touch with your local Danvers solar panel installer to get more information.

The Inflation Reduction Act, passed in August 2022, made some changes to the ITC (as well as renaming it to the Clean Energy Credit). The Clean Energy Credit is valid until 2035. Your solar installation project undertaken between 2022 and 2032 may qualify for a 30% tax credit. The amount will decrease slightly on a yearly basis until the current program ends. The expansion also makes credits for energy storage systems even easier to claim, starting in 2023.

Click here to learn more about the new Inflation Reduction Act. The easiest way to learn more about how the new Clean Energy Credit will apply to you is to reach out to your local Danvers solar panel company with your questions.

State & Local Solar Incentives

Some solar incentives may be provided at the state and local level. Like with federal incentives, these can include rebates, tax credits and more. These solar incentives — which might be given by the state of Massachusetts, or by your county or municipality — may be offered on an ongoing basis, or for only a limited time.

Next Steps for Installing Solar in Danvers

Solar energy use nationwide has increased enormously in the last 15 years, in part thanks to the proliferation of solar incentives. You might receive these incentives from the federal government, the Massachusetts government or your local utility company. If you're prepared to switch over to solar energy, reaching out to your local Danvers solar panel installation expert is a great first step.