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

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

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

The term "solar incentives" refers to a wide range of financial incentives designed to make installing and using solar panels more affordable. This is done to encourage people to switch to renewable energy. Various kinds of incentives, such as discounts, cash back or monthly utility bill credits, might be available to you. Some incentives may be handled by the Massachusetts government, by your utility company or by county or municipality, while other incentives are federal. Some broad categories of solar incentives include:

• Solar Renewable Energy Certificate (SREC): SRECs and similar performance-based incentives are typically handled by your state government. Once your solar panel system meets the qualification threshold (normally a small amount of energy production), you are eligible to receive SRECs that you can then sell to your utility company or other buyers. The money you receive is generally considered part of your taxable income.
• Net Metering: Net metering becomes relevant after your solar panels are up and running. If you have a net metering agreement with your Southborough utility company, the company will subtract the value of the excess energy your solar system produces from your utility bill each month. In some locations, this is a dollar-for-dollar credit, while in other places you may make back a percentage of the value.
• Tax Credits: Unlike tax deductions, tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the government.
• Tax Exemptions: Sales tax exemptions go into effect at the time of purchase for your solar panels. Property tax exemptions allow you to exclude the value added by your solar system when you calculate the amount of property tax you need to pay.
• Rebates: Rebates, or cash back after a purchase, are usually given before any solar tax credits are calculated. Solar rebates can be offered by your local utility company, by your county or by your state.

Federal Solar Incentives

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

The ITC can be applied to a solar system installed on your primary or secondary residence in the United States. The solar system has to have been installed after January 1, 2006 on a property you own for you to claim the credit. The ITC originally paid out 30% of all system costs (panels, labor, accessories and equipment), although the total amount has fluctuated slightly 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 claim amount.

To find out exactly how much money the ITC could save you, speak with your local Southborough solar panel installer.

The ITC was renewed and increased in scope after the passage of the Inflation Reduction Act in August 2022. It's also now called the Clean Energy Credit. With the new provisions, solar installation projects begun after January 1, 2022 and finished by December 31, 2032 may be eligible for a 30% tax credit. The amount of the credit will then decrease slightly each year until the current Clean Energy Credit expires in 2035. Starting in 2023, it will also be easier to qualify for credits for energy storage systems under the new laws.

Click here to learn more about the new Inflation Reduction Act. Your local Southborough solar panel installers are the best people to answer your questions regarding the new Clean Energy Credit and how it will apply to you.

State & Local Solar Incentives

Some solar incentives are often also provided by state and local governments. Like with federal incentives, these may include tax credits, rebates and more. Some incentives are ongoing, while others are available for a limited time. Incentives might be offered by your county or municipality, or by the Massachusetts government.

Next Steps for Installing Solar in Southborough

You can apply for and receive solar incentives from the federal government and the Massachusetts government, as well as from your local utility company. The growing availability of solar initiatives over the last 15 years has helped greatly increase nationwide adoption of solar energy. Reaching out to your local Southborough solar panel installation expert is the right first step towards making sure you get all the incentives you qualify for when you switch to solar energy.