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

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

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

The term "solar incentives" covers a range of financial incentives put in place to make installing and using solar panels more affordable. This is done to encourage people to switch to renewable energy. You might be eligible for several kinds of incentives, including cash back, discounts or monthly utility bill credits, depending on your situation. Some incentives come from your specific utility company, county or municipality, some from the state of Massachusetts and others from the federal government. Types of solar incentives might include:

• Solar Renewable Energy Certificate (SREC): In general, solar systems that produce more than a predetermined (generally small) amount of electricity can qualify for SRECs or other similar performance-based incentives. SRECs and similar incentives are typically provided by your state government. 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.
• Rebates: A rebate is a partial refund given after you've purchased your solar system. Rebates could be offered by your local utility company, your state or your county. The cash back that you get from the rebates is normally applied before tax credits are calculated.
• Tax Credits: Tax credits are dollar-for-dollar reductions that lower the amount of income tax you owe the government. (A tax credit is different from a tax deduction.)
• Tax Exemptions: These may come in the form of property tax exemptions, which can let you ignore the value of your solar system when paying taxes on your house. They may also include exemptions on sales tax at the time of purchase.
• Net Metering: Net metering factors in after your solar panels are up and running. If you've signed a net metering agreement with your Reading utility company, the company will subtract the value of the excess energy your solar system produces from your utility bill each month. In some places, this is a dollar-for-dollar credit, while in other places you may receive a refund equivalent to a percentage of the value.

Federal Solar Incentives

When thinking about solar incentives, you probably think of federal incentives first. An incentive many people are likely familiar with is the Federal Solar Investment Tax Credit (ITC). The ITC is a tax credit for a specific percentage of your solar system's cost.

The ITC applies to the total cost of installing a solar system, including the panels themselves as well as equipment, labor and accessories. This credit can be claimed 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. The tax credit ranges from 26-30% of total costs depending on when your project was completed. There is no maximum amount you can claim.

Your local Reading solar panel installation expert can offer more information about the ITC and how it might apply to your situation.

In August 2022, the Inflation Reduction Act expanded and extended the ITC, now referred to as the Clean Energy Credit. Now, solar installation projects that are completed between 2022 and 2032 can qualify for a 30% tax credit. The amount of the credit will then see a slight annual decrease until the current Clean Energy Credit expires in 2035. Beginning 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. To best understand how the new Clean Energy Credit might apply to you, speak with your local Reading solar installation company.

State & Local Solar Incentives

Some solar incentives are often also provided by state and local governments. Similar to federal incentives, these may include rebates, tax credits and more. The incentives — which may be given by the state of Massachusetts, or by your county or municipality — might be offered on an ongoing basis, or for only a limited time.

Next Steps for Installing Solar in Reading

The expanding number of solar incentives available has enormously increased the nationwide adoption of solar energy over the last 15 years. You might qualify for solar incentives from the Massachusetts government, the federal government or your local utility company. Your local Reading solar panel installation company can give you more information about which incentives you can apply for, and get you on track to switch to renewable energy today.