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The federal tax credit is gone for homeowners. Here is every incentive that still exists in Massachusetts, what solar actually costs, and whether it still makes financial sense — with real data, not marketing spin.
Important: The 30% federal solar tax credit (Section 25D) expired December 31, 2025.
Many websites still advertise this credit. Homeowners who buy solar with cash or a loan in 2026 receive $0 in federal tax credits. This guide reflects accurate 2026 incentives only. Learn what happened
Even without the federal tax credit, a typical 11kW solar system in Massachusetts pays for itself in approximately 7.8 years and saves over $147,000 over 25 years. Massachusetts electricity rates average $0.30/kWh and rise 3–5% annually. The SMART 3.0 program pays you an additional $0.03/kWh ($0.06 for low-income) for 20 years on top of net metering, with adders for battery storage and more — making Massachusetts one of the best states in the country for solar, with or without the federal credit.
Avg. System Cost
$34,760
11kW system
Payback Period
7.8 years
Cash purchase
25-Year Savings
$147,000
Vs. utility bills
Electricity Rate
$0.30/kWh
Rising 3–5%/year
The federal credit is gone, but Massachusetts still has one of the strongest solar incentive stacks in the country. Here is every program you can use in 2026, and one you cannot.
$0.03/kWh flat incentive (SMART 3.0) for 20 years
SMART 3.0 pays residential solar owners (≤25 kW) a $0.03/kWh flat incentive ($0.06/kWh for low-income) for a full 20-year term. Adders for battery storage, canopy, community solar, and more stack on top.
100% retail rate credit
All three investor-owned utilities (Eversource, National Grid, Unitil) credit exported solar at the full retail rate. Systems up to 25kW AC qualify.
$1,000 (15% up to $1,000)
Massachusetts offers a state income tax credit of 15% of system cost, capped at $1,000. Claimed on your MA state tax return.
20-year exemption
Solar panels increase your home value by an average of 4%, but the added value is exempt from property tax for 20 years.
6.25% saved
Solar panel purchases are exempt from the 6.25% Massachusetts sales tax, saving approximately $2,000–$2,500 on a typical system.
$0 — Expired Dec 31, 2025
Section 25D expired under the OBBBA (signed July 4, 2025). Homeowners who purchase solar with cash or a loan receive zero federal tax credit. Third-party owned systems (lease/PPA) still qualify for 30% under Section 48/48E.
$225–$1,500/year per battery
Eversource and National Grid pay battery owners to discharge during peak demand events. Earn $225–$1,500 per battery per year depending on capacity and number of events.
Key Insight for 2026
Lease and PPA options are more attractive in 2026 than ever before. Because the third-party system owner can still claim the 30% commercial ITC (Section 48/48E), they pass savings to you through lower monthly payments — effectively giving you access to a tax credit that homeowners can no longer claim directly. Compare lease vs. buy in 2026
Real pricing data from EnergySage marketplace and NuWatt installations. No inflated numbers, no hidden costs.
MA Average (EnergySage)
$3.16/watt
Before incentives, fully installed
NuWatt Pricing
$3.25/watt
Volume discounts for larger systems
Typical 11kW System
$34,760
Range: $28,300–$41,200
Based on $3.16/W average. Prices before incentives.
| System Size | Panels (~400W) | Total Cost | Annual Production | Annual Savings |
|---|---|---|---|---|
| 5 kW | 13 | $15,800 | 5,500 kWh | $1,650 |
| 7 kW | 18 | $22,120 | 7,700 kWh | $2,310 |
| 9 kW | 23 | $28,440 | 9,900 kWh | $2,970 |
| 11 kWMA Average | 28 | $34,760 | 12,100 kWh | $3,630 |
| 13 kW | 33 | $41,080 | 14,300 kWh | $4,290 |
| 15 kW | 38 | $47,400 | 16,500 kWh | $4,950 |
Annual savings based on $0.30/kWh retail rate. Actual production varies by roof orientation, shading, and panel efficiency. SMART incentive payments not included in savings column — they add additional income.
After the federal ITC expired, SMART became the single most important incentive for Massachusetts solar owners. It pays you per kWh of generation — separate from and on top of net metering savings.
Get your system installed and interconnected with your utility.
Your installer submits your application. Your rate is locked for 20 years.
Your panels generate electricity. Every kWh is metered and reported.
Receive a SMART 3.0 incentive of $0.03/kWh ($0.06/kWh low-income) as a bill credit, every month for 20 years.
| Component | Rate | Term | Notes |
|---|---|---|---|
| Base Rate (Residential ≤25 kW) | $0.03/kWh | 20 years | SMART 3.0 flat incentive rate (old block model no longer applies) |
| Low-Income Base Rate | $0.06/kWh | 20 years | Income-qualified households receive double the base rate |
| Battery Storage Adder | $0.04/kWh | 20 years | Requires battery capacity ≥25% of solar system |
| Low-Income Adder | $0.05/kWh | 20 years | Stacks on top of base rate for qualifying households |
| Canopy / Carport Adder | $0.08/kWh | 20 years | Solar canopy or carport-mounted installations |
| Community Solar Adder | $0.07/kWh | 20 years | Community shared solar projects |
| Brownfield Adder | $0.04/kWh | 20 years | Projects sited on brownfield or landfill locations |
| Dual-Use Agriculture Adder | $0.09/kWh | 20 years | Agrivoltaic projects combining solar with active farming |
All adders stack on top of the base rate. A residential system with a battery earns$0.07/kWh ($0.03 base + $0.04 battery adder) for 20 years. Low-income households with a battery could earn $0.15/kWh ($0.06 + $0.04 + $0.05). Read our complete SMART 3.0 guide
Both utilities offer full retail-rate net metering and SMART eligibility. The difference comes down to rates — and Eversource customers come out slightly ahead.
| Feature | Eversource Energy | National Grid | Unitil Energy |
|---|---|---|---|
| Retail Rate | $0.2836 | $0.2718 | $0.2412 |
| Net Metering Credit | 100% retail | 100% retail | 100% retail |
| Residential Cap | 25 kW AC | 25 kW AC | 25 kW AC |
| Monthly Bill w/Solar (8kW) | $35 | $35 | $41 |
| Monthly Savings | $227/mo | $217/mo | $183/mo |
| Annual Savings | $2,723 | $2,603 | $2,200 |
| Annual True-Up | April | March | March |
| Minimum Bill | $7/mo | $7/mo | $6.28/mo |
| ConnectedSolutions |
Data: 2026 tariff schedules. Bill examples assume 900 kWh/month usage, 8kW solar system generating 800 kWh/month. See detailed MA utility rate data
Bottom line: Eversource customers save about $120/year more than National Grid customers because of the higher retail rate. Both are excellent for solar. Unitil customers have lower rates but still see strong returns thanks to SMART incentive stacking.
Massachusetts has one of the best net metering policies in the country. All three investor-owned utilities credit solar exports at 100% of the retail rate — dollar for dollar.
Your solar panels produce electricity during daylight hours. Typical MA system: 9,600–13,200 kWh/year.
Your home uses solar power first. Any excess goes to the grid through your bidirectional smart meter.
Exported kWh earn a credit at 100% retail rate. Credits roll over monthly and true up annually.
25kW Residential Cap (Expanded Feb 2025)
Massachusetts expanded the residential net metering cap from 10kW to 25kW AC. Many websites still list the old 10kW limit.
No Interconnection Fee
All three MA utilities charge $0 for residential solar interconnection, reducing upfront costs.
Annual True-Up Resets Credits
Excess credits are zeroed out annually (April for Eversource, March for NGrid/Unitil) with no cash payout. Size your system to match annual usage.
SMART + Net Metering Stack
SMART payments are based on total generation. Net metering credits are based on exports. You receive both — they are separate income streams.
With the federal ITC gone for homeowners, financing dynamics have shifted. Lease and PPA are more competitive because the third-party owner still captures the 30% commercial ITC.
Maximum long-term savings
Monthly Cost
$0/mo after payback
Payback
7.5–8.5 years
25-Year Savings
$147,000+
Federal ITC Access
No federal credit
Highest lifetime ROI
No interest payments
Full ownership from day 1
$28,000–$41,000 upfront
No federal credit in 2026
$0 down with ownership
Monthly Cost
$150–$250/mo
Payback
8–10 years (with loan payments)
25-Year Savings
$120,000+
Federal ITC Access
No federal credit
$0 down available
You own the system
Bill savings often exceed payment
Interest adds to total cost
No federal credit for homeowner loans
Guaranteed savings, no upfront cost
Monthly Cost
$80–$150/mo
Payback
Savings from month 1
25-Year Savings
$40,000–$60,000
Federal ITC Access
30% ITC claimed by lessor
$0 down
Maintenance included
Lower payment because lessor captures 30% ITC
Less total savings vs. ownership
Lease escalator (1–3%/yr)
Lowest possible rate lock
Monthly Cost
Pay per kWh generated
Payback
Savings from month 1
25-Year Savings
$35,000–$55,000
Federal ITC Access
30% ITC claimed by provider
$0 down
Pay only for power produced
Rate lower than utility
Least total savings
Long-term contract (20–25 years)
Adding a battery to your solar system unlocks three revenue streams: backup power, SMART battery adder, and ConnectedSolutions demand response payments.
Keep your lights on during outages. A typical 10kWh battery provides 8–12 hours of backup for essential loads (fridge, lights, internet, sump pump).
Earn an extra $0.04/kWh per kWh on top of your SMART 3.0 base rate for 20 years. On an 11kW system, this adds approximately $10,560 in lifetime income.
Eversource and National Grid pay $225–$1,500/year per battery to discharge during peak demand events. This revenue is in addition to SMART payments.
SMART Battery Adder
~$528
Lifetime: ~$10,560
ConnectedSolutions
$225–$1,500
Lifetime: $4,500–$30,000
TOU Arbitrage
$150–$300
Lifetime: $3,000–$6,000
Outage Avoidance
Priceless
Lifetime: Peace of mind
Total battery revenue potential: $18,000–$47,000 over 20 years, significantly offsetting the $8,500–$12,500 battery cost. Learn more about ConnectedSolutions
Year-by-year financial projection for a typical 11kW system in Massachusetts. Cash purchase, no federal credit, SMART and net metering included.
| Year | Bill Savings | SMART Income | Cumulative Net | Status |
|---|---|---|---|---|
| Year 1 | $3,630 | $396 | $-29,734 | Paying off |
| Year 2 | $3,812 | $396 | $-25,526 | Paying off |
| Year 3 | $4,002 | $396 | $-21,128 | Paying off |
| Year 5 | $4,412 | $396 | $-11,722 | Paying off |
| Year 7 | $4,867 | $396 | $-1,430 | Almost there |
| Year 8Break-even | $5,111 | $396 | +$4,077 | Profit! |
| Year 10 | $5,633 | $396 | +$15,869 | Profit |
| Year 15 | $7,188 | $396 | +$50,531 | Profit |
| Year 20 | $9,174 | $396 | +$94,212 | SMART ends |
| Year 25 | $11,707 | — | +$147,437 | Free power |
Assumptions: 11kW system at $3.16/W ($34,760), $1,000 MA tax credit applied Year 1, $0.30/kWh starting rate with 5% annual increase, SMART 3.0 base rate of $0.03/kWh for 20 years (adders not included), 0.5% annual panel degradation. No federal credit.
Beyond SMART and net metering, Massachusetts provides three additional financial benefits for solar owners that reduce your total cost.
$1,000
15% of system cost, capped at $1,000. Claimed on your Massachusetts state income tax return in the year of installation. Reduces your state tax bill dollar for dollar.
20 Years
Solar panels increase your home value by approximately 4% (about $25,000–$35,000 for a median MA home). This added value is completely exempt from property tax for 20 years.
6.25% Saved
Solar panel purchases are exempt from the 6.25% Massachusetts sales tax. On a $34,760 system, this saves approximately $2,173 in taxes that you never have to pay.
Answers to the most common questions about going solar in Massachusetts in 2026.
Yes. Massachusetts has some of the highest electricity rates in the country ($0.28–$0.30/kWh), plus the SMART 3.0 program pays residential solar owners $0.03/kWh ($0.06 for low-income) for 20 years on top of net metering, with additional adders for battery storage, canopy, and more. A typical 11kW system pays for itself in about 7.8 years and saves over $147,000 over 25 years — even with $0 federal tax credit.
The residential solar tax credit (Section 25D) expired on December 31, 2025, under the One Big Beautiful Bill Act (OBBBA) signed July 4, 2025. Homeowners who purchase solar with cash or a loan in 2026 receive $0 in federal tax credits. However, third-party owned systems (lease or PPA) still qualify for 30% under the commercial ITC (Section 48/48E), because the financing company — not the homeowner — claims the credit.
Solar panels in Massachusetts cost an average of $3.16 per watt installed (EnergySage data). For a typical 11kW system, that is approximately $34,760 before state incentives. After the $1,000 state tax credit, sales tax exemption, and property tax exemption, the effective cost is lower. SMART program payments further reduce net cost over 20 years.
Under SMART 3.0 (PY2026), residential systems (≤25 kW) receive a $0.03/kWh flat incentive ($0.06/kWh for low-income qualifying households), paid monthly for a 20-year term. Rates are fixed at enrollment. The old block-based rate model from SMART 1.0/2.0 no longer applies. Adders stack on top: battery storage +$0.04/kWh, low-income +$0.05/kWh, canopy/carport +$0.08/kWh, community solar +$0.07/kWh, dual-use agriculture +$0.09/kWh, and brownfield +$0.04/kWh.
Eversource customers see slightly higher savings because Eversource retail rates ($0.2836/kWh) are higher than National Grid ($0.2718/kWh). Both utilities credit solar exports at 100% of the retail rate. Eversource customers save approximately $2,723/year vs. $2,603/year for National Grid on an 8kW system. Both utilities participate in the SMART program and ConnectedSolutions.
Yes. When you lease solar panels or sign a PPA, a third-party company owns the system and claims the 30% commercial ITC (Section 48/48E). This credit lowers their cost, which is passed to you as a lower monthly payment. You do not claim any federal credit yourself, but you benefit from it through reduced pricing.
Modern solar panels are rated to withstand snow loads of 5,400+ pascals (over 112 lbs per square foot) and are tested for hail resistance. Massachusetts gets about 4.5 peak sun hours per day annually. Panels actually perform better in cold temperatures. Most panels are warrantied for 25–30 years with guaranteed output of 80–85% at end of life.
ConnectedSolutions is a demand response program offered by Eversource and National Grid in Massachusetts. If you have a home battery, the utility pays you to discharge stored energy during peak demand events (typically summer afternoons). Earnings range from $225 to $1,500 per battery per year depending on battery capacity and participation.
Many Massachusetts homes, especially those built before 1980, have 100-amp or 150-amp electrical panels. If your solar system plus existing electrical load exceeds your panel capacity, an upgrade to 200 amps is required. This typically costs $1,500–$4,000 and takes 2–4 weeks. An alternative is a SPAN smart panel, which can manage loads without a full upgrade.
Cash purchase offers the highest lifetime ROI ($147,000+ over 25 years) but requires $28,000–$41,000 upfront. Solar loans offer $0 down with ownership. Lease and PPA options are increasingly attractive in 2026 because the third-party owner captures the 30% ITC, passing savings to you through lower monthly payments. For homeowners who want savings without upfront cost, lease or PPA is often the best 2026 option.
Yes. The Massachusetts state solar tax credit provides 15% of system cost up to a $1,000 cap. This is a state income tax credit, separate from the now-expired federal credit. Additionally, solar installations are exempt from the 6.25% state sales tax and the added property value is exempt from property tax for 20 years.
All three Massachusetts investor-owned utilities (Eversource, National Grid, Unitil) offer net metering at 100% of the retail rate for residential systems up to 25kW AC. When your solar panels produce more than you use, excess energy is exported to the grid and you receive a bill credit at the full retail rate. Credits roll over monthly and are trued up annually (April for Eversource, March for National Grid/Unitil).
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Deep dive into SMART 3.0 rates, adders, blocks, and how to maximize your payments.
Read moreFull explanation of the ITC expiration and what credits are still available.
Read moreDetailed payback analysis with real NuWatt pricing for Massachusetts.
Read moreCurrent pricing, system sizes, and cost trends for MA solar installations.
Read moreCompare rates and net metering policies for Eversource, National Grid, and Unitil.
Read moreCash, loan, lease, or PPA — which financing is best without the federal credit.
Read moreMassachusetts homeowners pairing solar with heat pumps see the biggest savings.
2026 rebate tiers: whole-home $2,650/ton, partial $1,125/ton. Plus HEAR federal rebates.
Read moreFull cost breakdown by system type, net cost after rebates, and 0% HEAT Loan options.
Read moreEversource & National Grid heat pump rates. Save $70–$141/month Nov–Apr.
Read morePricing data: EnergySage Solar Marketplace (January 2026), NuWatt Energy internal installation data.
Utility rates: Eversource R-1/R-2 tariff schedule (2026), National Grid R-1/R-4 tariff schedule (2026), Unitil R-1 tariff schedule (2026).
Incentive data: Massachusetts DOER SMART program (mass.gov), DSIRE database, IRS Section 25D / 48 / 48E guidance.
Federal tax credit status: One Big Beautiful Bill Act (OBBBA), signed July 4, 2025. Section 25D expired December 31, 2025.
Payback calculations assume 5% annual utility rate increase, 0.5% annual panel degradation, 4.5 peak sun hours (MA average).