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The ITC is dead for homeowners — here’s which financing makes sense now
The residential solar tax credit expired December 31, 2025. Cash and loan buyers receive $0 in federal credits. On a $34,760 system, that is $10,428 that 2025 buyers got and you will not.
The 30% commercial ITC remains available for third-party system owners (PPA/lease companies). They claim the credit and pass savings to you as a lower rate. Deadline: July 4, 2026.
In 2025, cash buyers got a 30% credit, making ownership clearly superior. Now that buyers get $0, the PPA/lease Section 48 advantage closes the gap significantly.
SMART 3.0 ($0.03/kWh for 20 years), 1:1 net metering, $1,000 state credit, sales tax exemption (6.25%), and property tax exemption (20 years). Solar loans available at 5.5-8% APR.
Section 48 deadline: July 4, 2026. PPA/lease projects must begin construction before this date for the system owner to claim the 30% ITC.
Three main paths, each with different advantages in post-ITC Massachusetts.
Best for: Maximum ROI, have $30K+ liquid
You own the system. You keep all SMART income.
Best for: $0 down with ownership
You own the system. You keep all SMART income.
Best for: $0 down, immediate savings
Third-party claims 30% ITC and passes it as a lower rate.
| Feature | Cash | Loan | PPA | Lease |
|---|---|---|---|---|
| Upfront Cost | $33-37K | $0 | $0 | $0 |
| Monthly Cost | $0 | $200-300 | Per kWh | $120-200 fixed |
| Interest Rate | N/A | 5.5-8% APR | N/A | N/A |
| Federal ITC | $0 (25D dead) | $0 (25D dead) | 30% (Sec 48) | 30% (Sec 48) |
| You Own System | Yes | Yes | No | No |
| SMART Income | Yes (~$396/yr) | Yes (~$396/yr) | No (owner keeps) | No (owner keeps) |
| State Tax Credit | $1,000 | $1,000 | No (owner) | No (owner) |
| Net Metering | 1:1 retail | 1:1 retail | 1:1 (owner) | 1:1 (owner) |
| 25-Year Savings | $147K+ | $120K+ | $40-55K | $35-50K |
| Payback Period | ~7.8 yr | 8-10 yr | Immediate | Immediate |
| Contract Length | None | 10-25 yr | 20-25 yr | 20-25 yr |
| Maintenance | You handle | You handle | Owner handles | Owner handles |
| Best For | Long-term investors | Ownership seekers | Risk-averse | Predictability |
* Based on an 11 kW system at $3.16/W in Massachusetts. Actual savings vary by utility, usage, and roof orientation.
Ownership without upfront cash
Note: The original MassCEC Mass Solar Loan program (with interest rate buy-downs to 0%) ended in 2020 after successfully funding thousands of installations. Solar loans are now available at market rates through local lenders.
Solar loans remain the best option for homeowners who want to own their system without paying cash upfront. At current rates of 5.5-8% APR, you get full ownership and keep all benefits: SMART income, net metering credits, and the $1,000 state tax credit.
Based on 15-year term at 6.5% APR
Even at market rates, a solar loan gives you full ownership and $120,000+ in 25-year savings. Combined with SMART 3.0 and net metering, most households see near-neutral monthly payments.
Estimate your solar return on investment with SMART income, net metering credits, ConnectedSolutions, and MA tax benefits.
Federal Residential Solar Tax Credit (Section 25D) Expired
Homeowners who purchase solar with cash or a loan receive $0 in federal tax credits. Section 25D expired December 31, 2025.
Eastern MA (Boston, South Shore, Cape Cod, MetroWest, Western MA)
Electric Rate
$0.28/kWh
Net Metering
1:1 retail credit (Class I ≤25 kW)
SMART 3.0 Rate
$0.03/kWh
Interconnection
2-4 weeks typical
20-year exemption — solar adds $0 to your property tax
Payback Period
7
years
25-Year Savings
$114,687
total
Monthly Benefit
$378
per month
Estimates based on average 2026 MA solar pricing, SMART 3.0 $0.03/kWh residential flat rate, 1:1 retail net metering, 6.25% sales tax exemption, 20-year property tax exemption, and 15% state tax credit (max $1,000). Section 25D residential ITC expired Dec 31, 2025 — $0 federal tax credit for cash/loan purchases.
Why third parties still get the 30%
When you sign a solar PPA or lease, the financing company owns the system — not you. That makes them a "commercial/third-party" system owner who qualifies for Section 48/48E, the 30% commercial ITC.
The financing company claims the ITC, NOT the installer. This is an important distinction. They then pass those savings to you as a lower per-kWh rate (PPA) or reduced monthly payment (lease).
Financing company installs a $34,760 system on your roof
They claim the 30% Section 48 ITC = $10,428 tax credit
Their net system cost drops to ~$24,332
They pass that savings as a lower rate to you
The INSTALLER does not claim the ITC. The THIRD-PARTY SYSTEM OWNER (financing company) claims the ITC. If an installer tells you they claim the credit, verify who actually owns the system.
Projects must begin construction before July 4, 2026 for the system owner to claim Section 48. If you are considering a PPA or lease, do not wait.
Recommendation: Cash
If you have $35K liquid and plan to stay 10+ years, cash gives you the best 25-year ROI ($147K+). No monthly payments, no interest, and you keep all SMART income and net metering credits.
Recommendation: Solar Loan
A solar loan at 5.5-8% APR gives you full ownership without cash upfront. Payments of $200-$300/mo are mostly offset by electric savings and SMART income. You keep SMART income and the $1,000 state credit.
Recommendation: Lease or PPA
PPA or lease gives you savings from day 1 with no upfront cost, no maintenance, no risk. The third-party company claims Section 48 (30%) and passes savings to you. Lower total savings but zero hassle.
Recommendation: Community Solar
Cannot install panels? Subscribe to a Massachusetts community solar project. No installation, no equipment, no long-term commitment. Typical 10-20% savings on your electric bill as a monthly credit.
Get a personalized quote with real numbers for your utility, system size, and financing option.
Complete MA Solar Guide
Everything about solar in Massachusetts 2026
SMART Program 3.0
$0.03/kWh for 20 years
Net Metering Guide
1:1 retail rate credit
MA Solar Cost 2026
$3.00-$3.40/W, typical 11 kW system
Eversource vs National Grid
Rates and net metering by utility
Boston Solar Cost
Boston pricing and permitting