2024 Solar Incentives Guide for Lexington, MA - Tax Credits & Rebates

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

You'll learn about:

  • Local & State Solar Incentives
  • Federal Tax Credits (Updated for 2024 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 Lexington solar installers to see how much you can save.

By EcoWatch Local Advisors

Data Analysis: James Savino

Ranking Methodology: Karsten Neumeister

Updated June 24, 2024

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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 Lexington?

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

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 are designed to make renewable energy usage more affordable via financial incentives for those who install solar panels on their homes. Incentives might include things like discounts, cash back or credit towards your monthly utility bill. Some incentives are handled federally, while others are offered by the state of Massachusetts or by your utility company, county or municipality. You might qualify for any of the following types of solar incentives:

  • Solar Renewable Energy Certificate (SREC): SRECs are credits that can be sold to your utility company (or other buyers) for cash that normally counts as part of your taxable income. Generally, you must meet a certain (small) threshold of energy production before your solar system qualifies for SRECs or similar performance-based incentives. These kinds of incentives are generally handled by your state government.
  • Tax Credits: Tax credits are dollar-for-dollar reductions that lower the amount of income tax you owe the government. (This is different from a tax deduction.)
  • Tax Exemptions: Tax exemptions can come in one of two forms. First, there is sales tax exemption, applied at the time you purchase your solar panels. The second is property tax exemption, which allows you to exclude the added value of your solar system when calculating property tax for your house.
  • Rebates: Solar rebates can be provided by your local utility company, or by your state or county. These rebates are essentially cash back that is applied after you pay for a solar system and before tax credits are calculated.
  • Net Metering: Net metering becomes relevant after your solar panels are up and running. If you have in place a net metering agreement with your Lexington utility company, it will subtract the value of the excess energy produced by your solar system from your utility bill each month. In some places, this credit is dollar-for-dollar, while in other places you might get refunded a percentage of the value.

Best Regional Coverage

Momentum Solar

★★★★★
4.5
  • Great warranty coverage
  • Representatives are experts on local policies
  • Concierge service ensures steady communication
  • Slightly limited service offerings

Best for Leasing

Sunrun

★★★★★
4.0
  • Expansive service area
  • Many financing options
  • Some reported issues with customer service
  • Some reported issues with door-to-door sales

Solar Veteran

Trinity Solar

★★★★★
4.0
  • Many financing options
  • Family-owned and -operated
  • Makes charitable contributions
  • Limited service area
  • Relatively short workmanship warranty

Federal Solar Incentives

When thinking about solar incentives, you likely think of federal incentives first. The Federal Solar Investment Tax Credit, or ITC, is probably the most commonly 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 solar panels installed on your primary or secondary residence in the United States. The solar system must have been installed after January 1, 2006, on a property owned by you for you to claim the credit. The ITC initially covered 30% of all installation costs (panels, labor, equipment and accessories), although this amount has fluctuated over time between 26-30%. The installation date of your solar system will determine what percentage you are eligible for. There is no cap on the amount you can claim.

Talking to your local Lexington solar panel installer is the best way to learn more about how the ITC may apply to you.

The ITC was both renewed and expanded by the passage of the Inflation Reduction Act in August 2022. It's also now called the Clean Energy Credit. The new Clean Energy Credit now runs until 2035. You can now receive a 30% credit for solar systems installed between January 1, 2022, and December 31, 2032. The total credit will then see a slight annual decrease until it expires. Starting in 2023, the expansion to the program will also make claiming credit for energy storage systems easier than ever before.

Click here to learn more about the new Inflation Reduction Act. Your local Lexington solar panel installation expert is the best person to answer your questions regarding the new Clean Energy Credit and how it applies to you.

State & Local Solar Incentives

Some solar incentives may be provided by state and local governments. Similar to federal incentives, these might include rebates, tax credits and more. Certain incentives are ongoing, while others are available for a limited time. These incentives may be given by your county or municipality, or by the Massachusetts government.

Next Steps for Installing Solar in Lexington

The expanding number of available solar incentives has enormously increased the adoption of solar energy nationwide over the past 15 years. You can get solar incentives from your local utility company, the federal government or the Massachusetts government. Your local Lexington solar panel installation expert can help you learn more about which incentives you should apply for, and get you started on the path to switching to renewable energy today.

EcoWatch's Lexington, MA Solar Incentives FAQs

I already have solar panels. Do I qualify for any incentives?

If your solar system was installed after January 1, 2022, you may qualify for the newly increased 30% tax credit under the Inflation Reduction Act. If you had your system installed between 2006 and 2021, you may qualify for a tax credit between 26% and 30%, depending on the year it was installed. Reaching out to the company that installed your system, or any local Lexington solar installer, can help you learn what incentives you qualify for.

What are the environmental benefits of switching to solar?

You can reduce your carbon footprint by 200 pounds of CO2 a year when you switch to solar panels. This adds up to around 4,000 pounds in 20 years. In addition, solar power is a renewable energy source, meaning that switching your home over reduces the drain on our planet's resources.

How long until the federal solar tax credit ends?

The federal solar tax credit, formerly called the ITC and now named the Clean Energy Credit, is set 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.

I want to change out my appliances for ones that are more energy-efficient. Are there any benefits I can apply for?

With the passage of the new Inflation Reduction Act, there are a number of new financial incentives that are available when you make eco-friendly improvements to your home. More details about these incentives, including information about incentives for purchasing new appliances, can be found here.

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

The order your incentives will be applied in might vary depending on which incentives you are eligible for but typically yes, you can claim multiple types of incentives for your solar project. Talk with your solar installer or a local tax professional to be sure you are claiming all possible incentives and applying them in the correct order.

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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