2023 Solar Incentives Guide for Somerville, MA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Somerville.
You'll learn about:
- Local & State Solar Incentives
- Federal Tax Credits (Updated for 2023 and beyond)
- Ways to optimize your solar investment
Solar installers are experts in maximizing your solar tax credits and rebates.
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By EcoWatch Local Advisors
Data Analysis: James Savino
Ranking Methodology: Karsten Neumeister
Updated March 14, 2023
Why you can trust EcoWatch
What Solar Tax Credits, Incentives, and Rebates are Available in Somerville?
Renewable Energy Property Tax Exemption
Wind, hydroelectric, geothermal, solar thermal, solar PV, and other solar energy systems: the assessed value of the system
Residential Renewable Energy Income Tax Credit
Renewable Energy Equipment Sales Tax Exemption
Alternative Energy and Energy Conservation Patent Income Tax Deduction (Personal)
Cape Light Compact- Residential Energy Efficiency Rebate Program
Refrigerator and Freezer Recycling: $125
Electric Clothes Dryers: $50
Clothes Washer: $350
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
Advanced Power Strips: Varies
Limited Time Enhanced Incentive: 75%
Year-Round Tenant Incentive: 100%
Enhanced Residential Program: 100%
Home Energy Assessment: Free
Mass Save - HEAT Loan Program
Solar Massachusetts Renewable Target (SMART) Program
Mass Solar Loan Program
Residential and Small-Scale Ground-Source Heat Pump Rebate Program
Retrofit Existing GSHP Rebate: varies with installation costs
Commonwealth Woodstove Change-Out Program
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
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
Solar Renewable Energy Certificates (SREC-II)
Federal Residential Renewable Energy Tax Credit
Solar incentives are meant to encourage homeowners to switch their home over to renewable energy by providing incentives that lower the financial burden of solar panel installation and use. Incentives might include things like discounts, cash back or credit towards your monthly utility bill. Some incentives are offered by the federal government, 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:
- Net Metering: Don't forget to speak to your Somerville utility company about signing a net metering contract. 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 could receive either a dollar-for-dollar credit or a percentage of the value.
- Solar Renewable Energy Certificate (SREC): SRECs and similar performance-based incentives might be available to you if the solar system on your home produces over a specified (usually small) amount of electricity. Performance-based incentives are normally handled at the state level. You can sell your SRECs to your utility company or other buyers, and the money you receive in return is usually considered part of your taxable income.
- Tax Exemptions: Tax exemptions can come in two forms. First, there is sales tax exemption, which is applied when you purchase solar panels. The second is property tax exemption. This allows you to exclude the added value of your solar system when paying property tax on your home.
- Tax Credits: Tax credits decrease, 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 usually applied before any solar tax credits are calculated. These rebates can be given by your local utility company, by your county or by your state.
Federal Solar Incentives
When thinking about solar incentives, federal incentives are likely the first thing that comes to mind. The solar incentive that you're most likely to have heard of is the Federal Solar Investment Tax Credit (ITC), which gives you a credit on your taxes equal to a predetermined percentage of your solar system's cost.
The ITC is applied to the total cost of installing solar panels, including the panels themselves as well as equipment, labor and accessories. You can claim this credit for panels installed after January 1, 2006 on a primary or secondary residence that you own and that is located in the United States. From its original value of 30% of the total cost, the credit has fluctuated slightly between 26-30%, and you may qualify for varying percentages depending on when your project was completed. There is no maximum amount you can claim.
Curious how the ITC might apply to your specific situation? Contact your local Somerville solar panel installation expert to get more information.
In August 2022, the Inflation Reduction Act expanded and extended the ITC, now dubbed the Clean Energy Credit. With the new provisions, solar installation projects started after January 1, 2022 and completed by the end of 2032 may be eligible for a 30% tax credit. This credit amount will then decrease slightly each year until the current Clean Energy Credit expires in 2035. Starting in 2023, the expansion will also make it easier to get credit for energy storage systems.
Click here to learn more about the new Inflation Reduction Act. Your local Somerville solar panel installation experts can answer any questions you have and explain how the new Clean Energy Credit will apply to you.
State & Local Solar Incentives
There are often also state solar incentives in addition to those provided by the federal government. Rebates, tax credits and more might be available at a more local level. The incentives — which may be given by your county or municipality, or by the state of Massachusetts — might be offered on an ongoing basis, or for only a limited time.
Next Steps for Installing Solar in Somerville
The large number of available solar incentives has enormously increased the adoption of solar energy nationwide over the last 15 years. You can get solar incentives from the federal government, the Massachusetts government or from your local utility company. Your local Somerville solar panel installation expert can help you learn more about which incentives you can apply for, and get you feeling good about making the change to renewable energy today.
Best Regional Coverage
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EcoWatch's Somerville, MA Solar Incentives FAQs
How can I find out if I qualify for specific solar incentives?
It's best to speak with your local Somerville solar installer to get an understanding of which incentives your project will qualify for. Generally, solar incentives apply to new solar systems installed on property you own (in the U.S.) within a specified date range. Some incentives, such as those provided at the level of the Massachusetts government, might have other requirements.
If I already have a solar system installed on my house, can I still claim 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 installed your system between 2006 and 2021, you might qualify for a tax credit between 26% and 30%, depending on the date of installation. Reaching out to the company that installed your system, or any local Somerville solar installer, can help you understand what incentives you qualify for.
How much can I save annually on my electric bill if I install solar panels on my house in Somerville?
Generally, Somerville homeowners who install solar panels save around $1,167.25 per year, or around $22,177.84 over 20 years after they make the switch.
Can I use a combination of multiple types of renewable energy to power my home?
Yes, you can use multiple types of renewable energy to power your home, such as a combination of solar and wind power. You can also combine renewable energy generation with a backup source of non-renewable energy. You should discuss your plan with your local Somerville solar installation expert, so that you understand what you'll need and what incentives you will or won't qualify for.
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.