|Program Type||Sales Tax Exemption|
|Technologies||Solar Water Heat, Solar Space Heat, Photovoltaics, Wind, Geothermal Heat Pumps|
|Amount||100 percent exemption—no maximum limit|
|Required Documentation||Form ST-12- Exempt Use Certificate (completed at time of purchase and provided to your professional installer)|
|Official Web Site||http://www.mass.gov/dor/individuals/taxpayer-help-and-resources/tax-guides/salesuse-tax-guide.html|
The state of Massachusetts offers 100 percent sales tax exemption on all equipment used directly in solar, wind-powered or heat pump systems. The equipment purchased must be used to provide heat or the energy needs of the applicant’s principal residence in the Commonwealth.
To apply for this tax exemption, you must fill out the form ST-12- Exempt Use Certificate. The form can be found online using any search engine. You should provide the filled-out form at the time you purchase the equipment either to the vendor of the equipment or to your professional installer.
|Program Type||Personal Tax Credit|
|Technologies||Solar water heat, solar space heat, photovoltaics, wind|
|Amount||15 percent of expenditure spent on wind or solar energy property- maximum of $1000|
|Required Documentation||Schedule EC|
|Official Web Site|
The Commonwealth of Massachusetts offers an incentive in the form of solar and wind “energy credits.” The credit can offset your personal income tax in the year that the system was financed. The amount that is credited is 15 percent of expenditures on your wind or solar equipment (including the cost of installation). However, this credit is capped out at $1000. So even if 15 percent of your expenditure is greater than that, you will be rewarded no more than the maximum allowance of $1000 in energy credit.
If you owe less in income tax than you have in credit, the remaining credit will rollover for three consecutive years. Any unused credit after three years will be forfeited.
This credit is available to any owner or tenant of a residential property. In order to qualify to receive this incentive, the site where the renewable energy is produced and used must be the primary residence of the individual who is seeking this Income Tax Credit. The system must be new and in compliance with all applicable performance and safety standards and must be expected to remain in operation for at least five years.
|Program Type||Solar Renewable Energy Certificates (SRECs)|
|Technologies||Photovoltaics (solar energy)|
|Amount||Each SREC can be worth from $300-$600 per megawatt hour (mWh)|
|Required Documentation||Application (must be accepted before system can begin accumulating SRECs)|
|Official Web Site|
The RPS Solar Carve-Out Program is one of the most innovative performance-based incentives in the country, and might one day serve as a model for other similar programs across the states. While many renewable energy certificate (REC) programs are designed to stimulate interest and investment in solar energy early on, most of these programs have finite funds and offer dwindling returns. The value of RECs tends to become less and less as more solar photovoltaic (PV) systems spring up. On the other hand, in Massachusetts the RPS Solar Carve-Out Solar Renewable Energy Certificates (SRECs) are designed to hold their value as the supply of solar energy increases, drawing from consistent funds.
Each year, power suppliers in Massachusetts are required to supply a greater percentage of their power from solar energy than the year before, and they accomplish this either by ownership of solar generation or by purchasing SRECs from solar energy system owners, residential and industrial alike. According to RPS Solar Carve-Out Program Coordinator Mike Judge, in 2010, utility companies and power suppliers must provide 30 megawatts (MW) of installed capacity, generating approximately 34,164 MWh of electricity, or 34,164 SRECs. These electric suppliers can buy SRECs at the rate of $300-$600 each. The guaranteed minimum of $300 is the base price of SRECs at auction, while the ceiling price of $600 will be the price electricity providers will be required to pay for each SREC if they haven’t reached the obligatory minimum standard by the end of the year.
In order to qualify to receive SRECs, solar projects in Massachusetts must be no larger than 2 MW, which is significantly larger than your average residential installation. While it is very difficult to estimate the profits of a residential system because it is based on many factors (such as the system size, the solar panel orientation, and even the weather), Judge offers a rough estimate to serve as a model:
“For a 5kW system, I would estimate that it would likely generate 6,000 kWh per year, which would be the equivalent of 6 SRECs. If these all sold at the auction price of $300 (minus a $15 fee), they could expect to receive approximately $1,710 per year ($285*6 SRECs),” he said in an email interview.
Keep in mind that this estimation is based on the $300 minimum price of an SREC. “This is likely the lowest price SRECs will be sold for” added Judge. “The first SRECs sold were …for a price of $500 each.”
Selling SRECs can be a difficult process for the owner of a small, home-based system. The buying and selling takes place on a system called New England Power Pool General Information System (NEPOOL GIS). Any owner of Solar Carve-Out SRECs can create an account on NEPOOL GIS, but it can be difficult to sell there because of the confusing application process and because most entities interested in buying SRECs are interested in buying a large amount of them at one time.
While it is still possible to sell your SRECs on your own through this system, owners of small systems might opt to join an aggregation to simplify the process of marketing and selling your SRECs.
According to the Solar Carve-Out information website, “(An Aggregation) represents a number of PV systems and Owners, provides qualification from DOER (Department of Energy Resources), establishes an Aggregators Account on the NEPOOL GIS, and markets and sells its members' SRECs.” The aggregator will ask for a small fee for managing your SRECs, but in the end, it might actually be in your best interest since an aggregator is in a better position for negotiating a better price than you would be on your own.
|Technologies||Photovoltaics (solar energy)|
|Amount||Base incentive of $1 per watt plus added incentives based on household income and the value of your home, up to $10,500 for residential systems|
|Required Documentation||System installers are responsible for the application process, so be sure to find an experienced and reliable professional to help you through this often process|
|Official Web Site||http://www.masscec.com/commonwealth-solar-ii|
This rebate applies only to new projects, and you can’t begin installation of your solar energy system until your application has been approved. In order to qualify for this rebate, your planned residential photovoltaic (PV) systems cannot exceed 5kW in size. In addition to the potential $5,000 rebate (5,000 watts x $1 per watt rebate), you can also receive an additional $1 per watt, potentially doubling your rebate amount, if you qualify for one of the “adders” of moderate household income (not greater than 120 percent median income) or if you qualify as having a moderate home value. Note that you can apply for one or the other of these adders, but not both. If applying for moderate income status, you must provide proof of income (your most recent federal income tax return) and proof that the project site is the primary residence of the system owner (such as a copy of your driver’s license or voter registration). If applying for the moderate home value adder, you will need to provide a copy of your most recent property taxes in order to determine the value of your home.
Unlike similar programs in other states, recipients of the rebate are also eligible to receive additional funding, such as Solar Renewable Energy Credits through the Renewable Portfolio Standard (RPS) Solar Carve-Out Program, as well as other state and federal incentives.
Residents of Massachusetts are offered a wealth of options for funding the installation of a solar energy system in their homes. State lawmakers have taken an interest in ensuring that renewable energy is, and will remain, a lucrative and ever-growing source of both energy and revenue. The Massachusetts Clean Energy Center uses funds that are collected from all electricity ratepayers in the state to finance grants and rebates for individuals and companies interested in installing renewable energy systems. The goal is to expand the role of renewable energy sources in meeting residential, commercial, industrial, institutional, and municipal energy needs.
Compensation for taxes for residential systems includes a state personal income tax credit up to $1000, state sales tax exemption on the purchase of any solar, wind or geothermal equipment, as well as local property tax exemption. Statewide organizations and utility companies offer rebates and incentives to offset the cost of a new photovoltaic system.
Personal Tax Credit
Property Tax Exemption
Sales Tax Exemption
State Grant Program
State Loan Program
State Rebate Program
Utility Loan Program
Utility Rebate Program
Rules, Regulations & Policies
Appliance/Equipment Efficiency Standards
Building Energy Code
Energy Standards for Public Buildings
Green Power Purchasing/Aggregation
Public Benefits Fund
Renewables Portfolio Standard
Solar Access Law/Guideline
Solar/Wind Permitting Standards
Related Programs & Initiatives
The U.S. Department of Energy's Alternative Fuels and Advanced Vehicles Data Center (AFDC) provides a wide range of information and resources to enable the use of alternative fuels and other petroleum-reduction options, such as advanced vehicles, fuel blends, idle reduction and fuel economy. The AFDC site offers a database of state and federal laws and incentives related to alternative fuels and vehicles, air quality, fuel efficiency, and other transportation-related topics.
The U.S. Department of Energy's Green Power Network provides news and information on green power markets and activities, including opportunities to buy green power. This site provides state-by-state information on green power marketing and utility green power programs. In addition, the site lists marketers of renewable energy credits (RECs), also known as green tags or renewable energy certificates, which represent the environmental attributes of the power produced from renewable energy projects.
The U.S. Department of Energy's Weatherization Assistance Program (WAP) enables low-income families to reduce their energy bills by making their homes more energy-efficient. Through this program, weatherization service providers install energy-efficiency measures in the homes of qualifying homeowners free of charge. The WAP program web site offers a state-by-state map of opportunities, projects and activities.
The U.S. Department of Energy's Wind Powering America site provides state-by-state information on wind projects and activities, including wind working groups, validated wind maps, anemometer loan programs, small wind guides, state-specific news, wind for schools, workshops and web casts.