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

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

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

The phrase "solar incentives" refers broadly to financial incentives implemented by the government and by solar companies to encourage increased use of renewable energy by making the installation and use of solar panels more affordable. Different kinds of incentives, such as cash back, discounts or credit towards your monthly utility bill, may be available to you. Some incentives may be handled by the Massachusetts government, by your utility company or by county or municipality, while others are federal. Some broad categories of solar incentives include:

• Tax Credits: Tax credits lower, dollar-for-dollar, the amount of income tax you owe the government. Tax credits differ from tax deductions.
• Rebates: Rebates, or cash back after a purchase, are typically applied before any solar tax credits are calculated. These rebates may be provided by your local utility company, by your county or by your state.
• Tax Exemptions: Tax exemptions can come in one of two forms. The first is sales tax exemption, 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 paying property tax on your house.
• Net Metering: Don't forget to talk with your Pembroke utility company about signing a net metering agreement. This will allow you to get a credit towards your utility bill every month for the value of excess energy generated by your solar panels. You may receive either a dollar-for-dollar credit or a percentage of the value.
• Solar Renewable Energy Certificate (SREC): Generally, solar systems that produce more than a predetermined (usually small) amount of electricity qualify for SRECs or similar performance-based incentives. SRECs and performance-based incentives in general are typically provided at the state level. SRECs can be sold to your utility company or another buyer, and this is usually considered part of your taxable income.

Federal Solar Incentives

Federal incentives are the kind of incentives that you are most likely to have some knowledge of. The Federal Solar Investment Tax Credit, or ITC, is likely the most well-known federal solar incentive. The ITC offers a tax credit for a set percentage of the cost of your solar system.

The ITC applies to solar panels installed after January 1, 2006 on a primary or secondary residence that you own in the United States. Originally, the tax credit was for 30% of the total cost — for panels, accessories, labor and equipment — although the percentage may range from 26-30%, depending on the installation date of your solar system. There is no cap on the amount you can claim.

To best understand how the ITC may apply to your situation, get in touch with your local Pembroke solar panel installer and ask for more information.

In August 2022, the Inflation Reduction Act laid out new provisions for the ITC, now called the Clean Energy Credit. The Clean Energy Credit re-raises the credit up to 30% for solar installations undertaken between January 1, 2022 and December 31, 2032. After this, the credit percentage will be reduced slightly each year until the program expires in 2035. The program expansion also makes claiming credit for energy storage systems easier than ever before, starting in 2023.

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

State & Local Solar Incentives

There are often state solar incentives available in addition to federal ones. Rebates, tax credits and more can be offered at a more local level. Incentives might be given by your county or municipality, or by the state of Massachusetts. Certain incentives may be available for only a limited time, while others are ongoing.

Next Steps for Installing Solar in Pembroke

You can qualify for solar incentives from the federal government and the Massachusetts government, as well as from your local utility company. Growing availability of solar initiatives over the last 15 years has helped greatly increase nationwide adoption of solar energy. We recommend talking to your local Pembroke solar installer for more information about these incentives and to make sure that you're getting the largest number possible for your solar panels.