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The solar industry changed dramatically in 2026. The federal residential tax credit is gone. Some companies have not updated their sales pitch. Others are deliberately misleading homeowners. Here is how to protect yourself.
Section 25D of the Internal Revenue Code was eliminated by the One Big Beautiful Bill Act (OBBBA), signed July 4, 2025. It expired December 31, 2025. Homeowners who purchase solar with cash or a loan receive zero federal tax credits. Section 48/48E remains available for third-party owners (PPA/lease companies) on projects beginning construction before July 4, 2026, but the homeowner does not claim that credit.
Massachusetts is one of the best solar markets in the country. High electricity rates ($0.28-$0.33/kWh), the SMART 3.0 incentive program, strong net metering protections, and generous state tax exemptions make solar a smart investment even without the federal tax credit.
But the elimination of Section 25D has created a dangerous information gap. Thousands of solar company websites, sales presentations, and advertising materials still reference a 30% tax credit that no longer exists. Some companies have genuinely not updated their materials. Others know the credit is gone and continue referencing it to close deals.
The difference matters. If a company tells you a $35,000 system will cost $24,500 after the “30% tax credit,” they are inflating your savings by $10,500. When you file your taxes and discover the credit does not exist, you are stuck with the full bill and a signed contract.
This guide covers the five biggest red flags we see in the Massachusetts solar market in 2026, along with the exact questions to ask and the answers you should expect from any legitimate company.
If a Massachusetts solar company’s website, advertisement, or sales representative tells you that you will receive a 30% federal tax credit on your solar purchase in 2026, that is the single biggest warning sign that the company is either incompetent or dishonest. The residential solar ITC (Section 25D) expired December 31, 2025. It is $0 for homeowners purchasing with cash or a loan.
The only exception: PPA (Power Purchase Agreement) and lease providers can legitimately reference Section 48/48E, because the third-party owner of the system claims that credit. But if a company tells you that you, the homeowner, will get 30% off your taxes, they are wrong.
These are the warning signs we see most often in the 2026 Massachusetts solar market. If you encounter any of these, proceed with extreme caution.
The federal residential solar ITC (Section 25D) expired December 31, 2025. It is gone. $0 for homeowners. Any company still advertising a 30% credit is either dangerously uninformed or intentionally deceiving you.
Section 25D of the Internal Revenue Code was eliminated by the One Big Beautiful Bill Act (OBBBA), signed July 4, 2025. For any solar system purchased by a homeowner with cash or a loan in 2026, the federal tax credit is $0.
Some companies still have outdated websites. Others update their websites but let sales reps continue using old pitch decks. A few are deliberately inflating savings projections to close deals.
The exception: PPA and lease providers can legitimately reference Section 48/48E, because the third-party system owner (not you) claims that credit. But if a company tells YOU that YOU will receive 30% off your taxes, they are wrong.
“Under which section of the tax code does the residential solar credit exist in 2026?”
Correct answer: It doesn't. Section 25D expired December 31, 2025. If they can't answer this, walk away.
"Sign today or lose this price." "The incentive expires Friday." "I can only hold this rate for 24 hours." These are manufactured urgency tactics designed to prevent you from comparison shopping.
The SMART program is not going away tomorrow. Net metering is protected by Massachusetts law. There is no expiring deadline that affects your purchase as a homeowner.
Section 48/48E does have a July 4, 2026 deadline for projects to begin construction, but that applies to the third-party system owner on a lease or PPA, not to your cash or loan purchase.
A legitimate company will give you a written quote, tell you to take your time, and encourage you to get competing bids. They know their value and do not need to trick you into signing.
“What specific incentive is expiring, and can you show me the regulation?”
Correct answer: There is no homeowner-facing incentive in Massachusetts with a near-term expiration date. SMART 3.0 is ongoing. Net metering is law. The state tax credit is not expiring.
SMART 3.0 is the single most valuable state solar incentive in Massachusetts. A typical 11 kW system earns $7,920 over 20 years. If the installer's proposal only shows electric bill savings, they may not be SMART-qualified.
SMART (Solar Massachusetts Renewable Target) 3.0 pays residential solar owners $0.03/kWh for 20 years. With the battery storage adder ($0.04/kWh) and building-mounted adder ($0.03/kWh), total SMART income can reach $0.10/kWh.
A proposal that shows only net metering bill savings without SMART income is incomplete. It either means the company is not registered with the SMART program (a serious disqualification) or they are hiding the full picture to make competing quotes look worse.
At $0.03/kWh base rate, an 11 kW system generating ~13,200 kWh/year earns $396/year from SMART alone. Over 20 years, that is $7,920 in guaranteed income on top of your electric bill savings.
“Is SMART 3.0 income included in my ROI calculation, and what rate are you using?”
Correct answer: The answer should be yes, with a clear number. Base residential rate is $0.03/kWh. If they add a battery, the battery adder is $0.04/kWh. Building-mounted is $0.03/kWh.
Some solar loans include 25-30% dealer fees rolled into the principal. A $35,000 system becomes a $45,000+ loan. Always ask for the cash price AND the financed price separately.
Dealer fees (also called "origination fees" or "channel fees") are costs the solar company pays to the lender, which get added to your loan balance. On a $35,000 system, a 28% dealer fee adds $9,800 to your loan, making you finance $44,800.
The result: your monthly payment is higher than it should be, and you pay thousands more in interest over the life of the loan. The company benefits because the dealer fee is essentially their profit margin, pre-paid by the lender.
To protect yourself, always ask for the cash price separately. Then compare financing from the installer's preferred lender against a credit union or bank loan. UMassFive Credit Union offers competitive solar loan rates in Massachusetts.
“What is the cash price of my system, and what is the total amount financed on the loan? Are there any dealer fees?”
Correct answer: The cash price and financed amount should be close. If the financed amount is 20-30% higher, dealer fees are embedded. Ask for the fee percentage in writing.
Massachusetts requires a Home Improvement Contractor (HIC) license for solar installers. If a company cannot provide their HIC number, local references, or proof of MA experience, they may be a fly-by-night operation.
Massachusetts law requires anyone performing home improvement work over $1,000 to hold a HIC license from the Office of Consumer Affairs and Business Regulation. Solar installation qualifies. No HIC license = illegal to install solar in MA.
Ask for 5 or more local references within 20 miles of your home. A company with a strong Massachusetts track record will have no trouble providing them. Be wary of companies that just entered the MA market or that primarily operate in other states.
Check the company on mass.gov's contractor lookup tool. Also verify their standing with the Better Business Bureau and search the Massachusetts Attorney General's consumer complaint database.
“What is your Massachusetts HIC license number, and can you provide five local references within 20 miles?”
Correct answer: They should provide the number immediately. You can verify it at mass.gov. References should be recent (within the last 12 months) and local.
Not every company is dishonest. Here are the hallmarks of a trustworthy Massachusetts solar installer.
Shows the real cost of your system without a 30% tax credit line item. Explains clearly that the residential ITC expired in 2025.
Includes SMART 3.0 payments in your ROI projection, with the correct rate ($0.03/kWh residential base).
Offers cash, solar loan (with transparent terms), PPA/lease, and explains the pros and cons of each option honestly.
Provides their HIC license number upfront. Licensed, insured, and bonded in Massachusetts.
Offers a comprehensive 25-year warranty on panels, inverters, and workmanship. Backs it with a local presence.
Handles all permitting, utility interconnection, SMART enrollment, and inspections. You should not have to manage paperwork.
Dealer fees are one of the least understood aspects of solar financing in 2026. Here is how they work: when a solar company partners with a lending institution, the lender offers the company a choice of loan products. Lower-APR loans come with higher dealer fees. The company selects the loan product, and the dealer fee is added to your loan principal.
For example, a company might offer you a “1.49% APR solar loan.” Sounds great. But the dealer fee might be 30%. On a $35,000 system, you are actually financing $45,500. Your monthly payment and total interest cost reflect that $45,500 balance, not the $35,000 value of your system.
The math is revealing: at 1.49% APR on $45,500 over 25 years, you pay $54,125 in total. At 6.99% APR on $35,000 from a credit union over 15 years, you pay $56,710 in total but pay it off 10 years sooner. The “low APR” loan often costs you more in practice.
| Loan Type | APR | Dealer Fee | Amount Financed | Term | Total Cost |
|---|---|---|---|---|---|
| Installer loan (low APR) | 1.49% | 30% | $45,500 | 25 yr | $54,125 |
| Installer loan (mid APR) | 4.99% | 15% | $40,250 | 20 yr | $63,585 |
| Credit union loan | 6.99% | 0% | $35,000 | 15 yr | $56,710 |
| Cash purchase | N/A | 0% | $35,000 | N/A | $35,000 |
Based on a $35,000 system. Actual rates vary by lender and credit score. Payments do not include SMART income or net metering savings.
Trust but verify. These free resources let you independently confirm everything a solar company tells you.
Verify any solar company's HIC license on mass.gov
Visit resource →Check if a solar system or company is registered with SMART
Visit resource →Search consumer complaints filed against companies
Visit resource →Check company ratings, reviews, and complaint history
Visit resource →Solar leases and Power Purchase Agreements (PPAs) have become more relevant in 2026 precisely because of the ITC situation. Here is the honest breakdown.
Bottom line: A solar PPA or lease is not inherently a red flag. It is a legitimate financing structure where the third-party owner benefits from the commercial ITC and passes savings to you. The red flag is when a company confuses you about who receives the tax credit. If they say you will claim 30% on your taxes through a lease, that is false. The leasing company claims it.
Here is what honest pricing looks like, with no phantom tax credits inflating the savings.
Average Cost per Watt
$3.00 - $3.40/W
Installed, before incentives
Typical 11 kW System
$33,000 - $37,400
No federal tax credit
Payback Period
7.5 - 8.5 Years
With SMART + net metering
SMART 3.0
$0.03/kWh for 20 years
~$396/yr (11 kW)
Net Metering
1:1 retail rate credit
~$3,400/yr (11 kW)
State Tax Credit
15% up to $1,000
$1,000 one-time
Sales Tax Exemption
6.25% saved
~$2,175 one-time
Property Tax Exemption
20-year exemption
~$396/yr saved
ConnectedSolutions
Battery demand response
$225-$1,500/yr
Do not take any company's word for it. Use our calculator to see what your solar system should actually cost and produce in Massachusetts, with accurate 2026 incentive data and zero phantom tax credits.
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.
Understanding the history helps you recognize when a company is referencing outdated information versus deliberately misleading you.
2006-2019
Section 25D at 30%
The residential ITC was established at 30% with multiple extensions. This is the era most sales materials still reference.
2020-2022
Scheduled step-down to 26%
The ITC began its original phase-out schedule before the IRA intervened.
Aug 2022
IRA restores 30% through 2032
The Inflation Reduction Act extended the 30% residential ITC through 2032. Many companies updated their marketing.
Jul 4, 2025
OBBBA signed into law
The One Big Beautiful Bill Act repealed the IRA's residential clean energy credits, including Section 25D.
Dec 31, 2025
Section 25D expires
The residential solar ITC officially expired. Homeowners purchasing with cash or loan receive $0 in federal tax credits.
Jul 4, 2026
Section 48/48E construction deadline
Third-party owners (PPA/lease companies) must begin construction before this date to claim the commercial ITC. Does not affect homeowner cash/loan purchases.
Print this list or save it on your phone. Ask every company every question. Compare the answers.
Does your quote include any federal residential tax credit?
Good: No. Section 25D expired December 31, 2025.
Red flag: Yes, you'll get 30% back.
Is SMART 3.0 income included in my payback projection?
Good: Yes, at $0.03/kWh for 20 years plus applicable adders.
Red flag: What's SMART? / We don't participate in SMART.
What is the cash price of my system?
Good: Clear number, matches system size at $3.00-$3.40/W.
Red flag: We only offer financed pricing.
Are there dealer fees in the loan? What percentage?
Good: Yes, X%. Here is the breakdown.
Red flag: No / What are dealer fees? / Evasion.
What is your Massachusetts HIC license number?
Good: Provides number immediately. Verifiable on mass.gov.
Red flag: We're licensed in [other state] / We're applying.
Can you provide five local references within 20 miles?
Good: Yes, with names, towns, and permission to contact.
Red flag: We have reviews online / We're new to the area.
Who handles permitting, interconnection, and SMART enrollment?
Good: We handle everything. It's included in the price.
Red flag: You'll need to handle some of that yourself.
What is the production guarantee in kWh per year?
Good: Provides specific number based on your roof, with guarantee.
Red flag: We estimate... / No guarantee offered.
What happens if I want to cancel after signing?
Good: Clear cancellation period and refund policy in contract.
Red flag: Non-refundable deposit / No cooling-off period.
What warranty coverage do you provide?
Good: 25-year panel, 25-year inverter/microinverter, 10-25 year workmanship.
Red flag: Vague answers / Only manufacturer warranty / No workmanship warranty.
Ask them directly: "Under which section of the Internal Revenue Code does the residential solar tax credit exist in 2026?" The correct answer is that it does not exist. Section 25D expired on December 31, 2025 under the OBBBA. Any company advertising a 30% residential tax credit in 2026 is either uninformed about current law or deliberately misleading you. The only remaining federal solar credit is Section 48/48E for commercial and third-party system owners (PPA/lease providers), which the homeowner does not claim.
Yes. The residential solar investment tax credit (Section 25D) was eliminated by the One Big Beautiful Bill Act (OBBBA), signed into law on July 4, 2025. It expired December 31, 2025. Homeowners who purchase solar with cash or a loan receive $0 in federal tax credits. Section 48/48E still exists for commercial and third-party ownership structures (PPAs and leases), but the credit goes to the system owner, not the homeowner.
Ask these five questions: (1) Is SMART 3.0 income included in your payback calculation? (2) What is the cash price vs. the financed price of my system? (3) What is your Massachusetts HIC license number? (4) Can you provide five local references within 20 miles? (5) Do you handle all permitting, interconnection, and SMART enrollment? Any hesitation or evasion on these questions is a red flag.
Massachusetts requires solar installers to hold a Home Improvement Contractor (HIC) license. You can verify any company's license on the Massachusetts Office of Consumer Affairs website at mass.gov. Search by company name or license number. Also check the Better Business Bureau (BBB) and the Massachusetts Attorney General's consumer complaint database for any filed complaints.
A legitimate Massachusetts solar quote in 2026 should include: (1) Cash price before any incentives. (2) System size in kW and estimated annual production in kWh. (3) Panel brand, model, and warranty details. (4) Inverter type and warranty. (5) SMART 3.0 projected income over 20 years. (6) Net metering savings estimate based on your utility rate. (7) Total payback period without any federal tax credit. (8) Financing terms with APR and total cost of the loan clearly stated. If the quote shows a 30% ITC line item, the company is not being honest.
Yes, solar leases and PPAs (Power Purchase Agreements) are still legitimate in 2026. In fact, they have become more attractive because the third-party system owner (the leasing company) can still claim the Section 48/48E commercial ITC of up to 30% on systems beginning construction before July 4, 2026. The company passes some of those savings to you through a below-retail electricity rate. The key difference: you do not own the system, you do not receive SMART income directly, and you cannot claim any tax credits yourself. Legitimate lease/PPA companies will explain this clearly.
Solar panels in Massachusetts cost $3.00 to $3.40 per watt installed in 2026. A typical 11 kW system costs $33,000 to $37,400. Boston and Cambridge are on the higher end ($3.10-$3.50/W), while Springfield and Worcester are lower ($2.85-$3.30/W). There is no federal residential tax credit to reduce these costs. State incentives include SMART 3.0 payments ($0.03/kWh for 20 years), 1:1 net metering, a $1,000 state tax credit, 6.25% sales tax exemption, and a 20-year property tax exemption.
SMART (Solar Massachusetts Renewable Target) is the state's solar incentive program. Under SMART 3.0, residential systems 25 kW or smaller earn $0.03/kWh for 20 years (low-income households earn $0.06/kWh). A typical 11 kW system earns approximately $396 per year, or $7,920 over the full term. Any legitimate MA installer should include SMART income in their ROI calculation because it is the single most important state incentive. If your installer does not mention SMART or does not include it in their proposal, it means they are either not SMART-qualified or they are hiding numbers.
Complete overview of solar in Massachusetts after the ITC expiration.
Read guideHonest pricing data with no phantom tax credits.
Read guideData-driven analysis of solar ROI in the post-ITC era.
Read guideSimilar red flags and green flags for the heat pump industry.
Read guideCompare all financing options with honest 2026 numbers.
Read guideCity-by-city pricing breakdown with SMART income projections.
Read guideNo phantom tax credits. No hidden dealer fees. No pressure tactics. Just honest pricing with SMART 3.0, net metering, and every state incentive calculated accurately.