2024 Solar Incentives Guide for Wellesley, MA - Tax Credits & Rebates

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

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

The term "solar incentives" covers a wide 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 may qualify for different kinds of incentives, such as discounts, cash back or credit towards your monthly utility bill, 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. Categories of solar incentives include:

• Solar Renewable Energy Certificate (SREC): Generally, solar systems that produce over a threshold (generally small) amount of electricity will qualify for SRECs or other performance-based incentives. SRECs and the like are typically provided at the state level. 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 solar rebate is a partial refund given after you've purchased your solar system. Rebates might be offered by your local utility company, your state or your county. The discount that rebates offer is normally applied to the price of solar panels before calculating tax credits.
• Tax Exemptions: Tax exemptions may come in one of two forms. First, there is sales tax exemption, applied at the time you purchase your solar panels. The second is property tax exemption. This allows you to ignore the value added by your solar system when calculating property tax for your house.
• Net Metering: Net metering factors in after your solar panels are up and running. If you have a net metering agreement with your Wellesley utility company, it will subtract the value of the excess energy produced by your solar system from your utility bill each month. In some areas, this is a dollar-for-dollar credit, while in other places you may get refunded a percentage of the value.
• 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.)

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Federal Solar Incentives

Federal solar incentives are likely to be the first thing that comes to mind when thinking about solar incentives. An incentive many people are likely familiar with is the Federal Solar Investment Tax Credit (ITC). This incentive is a tax credit for a predetermined 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, accessories, labor and equipment. This credit can be claimed on a solar panel system installed on a primary or secondary residence that you own in the United States. The original amount you could claim was 30% of the total cost, although certain projects may qualify for only 26%, depending on the details. There is no maximum amount you can claim.

To more fully understand how the ITC could apply to your situation, reach out to your local Wellesley solar panel installer and request more information.

In August 2022, the ITC (now titled the Clean Energy Credit) was bolstered by the passing of the Inflation Reduction Act. The new Clean Energy Credit is valid until 2035. You can now apply for a 30% credit for solar systems that began installation on or after January 1, 2022, and will be done by December 31, 2032. The credit will then decrease annually until its expiration. The program expansion also makes claiming credit for energy storage systems easier than ever before, beginning in 2023.

More information about the new Inflation Reduction Act can be found here. To better understand how the new Clean Energy Credit will apply to you, get in touch with your local Wellesley solar installation company.

State & Local Solar Incentives

Some solar incentives may be provided by state and local governments. Similar to federal incentives, these may include rebates, tax credits and more. Certain incentives are ongoing, while others are only available for a limited time. Solar incentives may be offered by your county or municipality, or by the Massachusetts government.

Next Steps for Installing Solar in Wellesley

The variety of available solar incentives has helped tremendously increase the use of solar power nationwide over the past 15 years. You might qualify for solar incentives from the federal government, the Massachusetts government or from your local utility company. It is a good idea to talk to your local Wellesley solar installation company for more information about these incentives and to be sure that you're getting all the money you can for your solar panels.