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

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

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

Solar incentives are intended to make renewable energy usage more affordable via financial incentives for individuals who install solar panels on their homes. Solar incentives could include cash back, upfront discounts or monthly credits towards your utility bill. Some incentives are given by the federal government, some by the Massachusetts government and some by your specific utility company, county or municipality. Some broad categories of solar incentives include:

• Solar Renewable Energy Certificate (SREC): SRECs and similar performance-based incentives might be available to you if your solar system produces over a specified (usually small) amount of electricity. These types of incentives are usually handled by the state government. You can sell any SRECs you have to your utility company or other buyers, and the money you make is usually considered part of your taxable income.
• 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.)
• Net Metering: Net metering factors in after your solar panels are up and running. If you have a net metering agreement with your Northborough utility company, the company 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 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 panels. Rebates might be offered by your local utility company, your state or your county. The rebates are usually applied before calculating tax credits.
• Tax Exemptions: Tax exemptions may come in one of two forms. First, there is sales tax exemption, which is applied when you purchase solar panels. The second is property tax exemption, which allows you to ignore the added value of your solar system when calculating property tax for your house.

Federal Solar Incentives

When someone says "solar incentives," you probably think of federal incentives first. The Federal Solar Investment Tax Credit, or ITC, is probably the most commonly known federal solar incentive. The ITC provides a tax credit for a set percentage of the cost of your solar system.

The ITC applies towards solar systems installed after January 1, 2006 and under this program you can deduct from your taxes a percentage of the total cost of solar panels, equipment, labor and accessories. You can claim this credit for solar panels installed on a primary or secondary residence that you own in the United States. Originally, you could claim 30% of the total cost, although the amount you can claim may range between 26-30%. There is no maximum amount you can claim.

To better understand how the ITC might apply to you, call your local Northborough solar panel installer and request 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 new Clean Energy Credit is valid until 2035. Homeowners can now receive 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 it expires. The program expansion also makes it easier to get credit for energy storage systems, beginning in 2023.

Click here to learn more about the new Inflation Reduction Act. The easiest way to understand how the new Clean Energy Credit applies to you is to talk with your local Northborough solar panel company.

State & Local Solar Incentives

Tax credits, rebates and more might be provided at multiple levels. On top of federal solar incentives, there are often state and local ones as well. Certain incentives are ongoing, while others are available for a limited time. Incentives may be given by the Massachusetts government, or by your county or municipality.

Next Steps for Installing Solar in Northborough

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