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The federal residential solar tax credit died on December 31, 2025. But Massachusetts still has the strongest state solar incentive stack in America — 7 programs that can return $15,000-$20,000+ in value over 20 years.
SMART 3.0 performance payments, 1:1 net metering, ConnectedSolutions battery revenue, dual tax exemptions, a state tax credit, and Section 48 lease/PPA savings deliver a 7-9 year payback — even with $0 from Washington.
Federal ITC
$0
Expired Dec 31, 2025
SMART 3.0 (20yr)
$5,760+
$0.03/kWh × 20 years
Battery Revenue
$3,250/yr
ConnectedSolutions (10kW)
Payback Period
7-9 yrs
Best in the US — no ITC needed
Quick Answer
The federal residential solar tax credit (Section 25D) expired December 31, 2025. Massachusetts homeowners who buy solar with cash or a loan get $0 in federal tax credits. However, Massachusetts has 7 active state-level programs that make it the best state for solar in the US:
For a typical 11 kW system costing ~$34,760, these incentives return $15,000-$20,000+ in total value over 20 years, delivering a payback period of 7-9 years even without the federal credit.
The Section 25D residential solar Investment Tax Credit expired on December 31, 2025 after being eliminated by the One Big Beautiful Bill Act (OBBBA), signed July 4, 2025. If you buy solar panels in Massachusetts in 2026 with cash or a loan, you receive $0 in federal tax credits.
This is not a reduction — it is a complete elimination. There is no phase-down, no extension, and no grandfather clause for residential purchases.
No federal credit, but MA's 7 state programs return $15K-$20K+ in value over 20 years. Payback: 7-9 years. You own the system and keep all production value.
The third-party company that owns the system claims the Section 48/48E commercial ITC (30%+) and passes savings through lower monthly payments. Deadline: July 4, 2026.
Every program below is confirmed active as of March 2026. These incentives stack — you can claim all of them on the same system simultaneously.
| Program | Type | Value | 8 kW System | 11 kW System | When | Status |
|---|---|---|---|---|---|---|
| SMART 3.0 | Performance Payment | $0.03/kWh × 20 years | ~$5,760 | ~$7,920 | Monthly for 20 years | Active |
| SMART 3.0 (Low-Income) | Performance Payment | $0.06/kWh × 20 years | ~$11,520 | ~$15,840 | Monthly for 20 years | Active |
| Net Metering (1:1) | Bill Credit | $0.28-$0.32/kWh credit | ~$2,700/yr | ~$3,700/yr | Ongoing (monthly credits) | Active |
| Sales Tax Exemption | Upfront Savings | 6.25% of system cost | ~$1,580 | ~$2,173 | At purchase | Active |
| Property Tax Exemption | Annual Savings | 100% for 20 years | ~$584/yr | ~$584/yr | 20 years | Active |
| State Tax Credit | Tax Credit | 15% up to $1,000 | $1,000 | $1,000 | Year of installation | Active |
| ConnectedSolutions | Battery Revenue | $225-$275/kW/yr | ~$3,250/yr (10kW) | ~$3,250/yr (10kW) | Ongoing (seasonal) | Active |
| Section 48 (Lease/PPA) | Third-Party ITC | 30%+ of system cost | Lower payments | Lower payments | Before July 4, 2026 | Deadline |
| Federal 25D (Cash/Loan) | Residential ITC | $0 | $0 | $0 | Expired Dec 31, 2025 | Expired |
Performance Payment
Value
$0.03/kWh × 20 years
8 kW System
~$5,760
11 kW System
~$7,920
Timing
Monthly for 20 years
Performance Payment
Value
$0.06/kWh × 20 years
8 kW System
~$11,520
11 kW System
~$15,840
Timing
Monthly for 20 years
Bill Credit
Value
$0.28-$0.32/kWh credit
8 kW System
~$2,700/yr
11 kW System
~$3,700/yr
Timing
Ongoing (monthly credits)
Upfront Savings
Value
6.25% of system cost
8 kW System
~$1,580
11 kW System
~$2,173
Timing
At purchase
Annual Savings
Value
100% for 20 years
8 kW System
~$584/yr
11 kW System
~$584/yr
Timing
20 years
Tax Credit
Value
15% up to $1,000
8 kW System
$1,000
11 kW System
$1,000
Timing
Year of installation
Battery Revenue
Value
$225-$275/kW/yr
8 kW System
~$3,250/yr (10kW)
11 kW System
~$3,250/yr (10kW)
Timing
Ongoing (seasonal)
Third-Party ITC
Value
30%+ of system cost
8 kW System
Lower payments
11 kW System
Lower payments
Timing
Before July 4, 2026
Residential ITC
Value
$0
8 kW System
$0
11 kW System
$0
Timing
Expired Dec 31, 2025
System Cost
~$34,760
11 kW × $3.16/W
Year 1 Value
~$7,557
Credits + payments + tax savings
20-Year Value
~$92,000+
NM + SMART + CS + exemptions
Payback
~7.5 years
Then 17.5 years of free power
Select your utility, system size, and battery preference to see exactly how much every incentive is worth for your specific situation.
See how Massachusetts incentives combine to maximize your savings
First-Year Value
$7,758
savings + incentives + tax benefits
25-Year Lifetime
$113,591
on a $34,760 system
Payback Period
7.6 years
then pure savings
Estimates based on MA averages. Actual values depend on system design, shading, utility rate changes, and eligibility. SMART 3.0 rate locked at enrollment for 20 years. Federal residential ITC (Section 25D) expired Dec 31, 2025.
The Solar Massachusetts Renewable Target (SMART) 3.0 program is the single most valuable state solar incentive in the country. It pays you a fixed rate for every kilowatt-hour your solar system produces — regardless of whether you use the electricity or send it to the grid.
SMART 3.0 includes adder payments that stack on top of the base rate. These increase your per-kWh payment if you qualify:
| Adder | $/kWh | Notes |
|---|---|---|
| Battery Storage | +$0.04 | Must pair battery with solar |
| Low-Income | +$0.05 | Income-qualified households |
| Canopy/Parking | +$0.08 | Solar carport installations |
| Community Shared | +$0.07 | Community solar projects |
A low-income household with battery storage could earn $0.06 + $0.05 + $0.04 = $0.15/kWh — five times the standard rate. Over 20 years on an 8 kW system, that is approximately $28,800 in SMART payments alone.
Massachusetts requires all three investor-owned utilities to provide 1:1 net metering for residential systems up to 25 kW (Class I). This means every kWh of excess electricity you send to the grid earns a credit equal to the full retail rate you pay for electricity.
This is one of the most generous net metering policies in the country. Many states have reduced net metering to wholesale rates or successor tariffs — Massachusetts has not.
Monthly: Excess kWh generated become credits that offset future bills. Credits roll over indefinitely during the billing year.
Annual True-Up: At the end of the billing year, any remaining excess credits are paid out at the utility's "avoided cost" rate (much lower than retail). Size your system to offset 100% of annual usage to maximize value.
Example: An 11 kW system on National Grid producing 13,200 kWh/year that offsets 100% of a home using 12,000 kWh/year saves approximately $3,840/year at $0.32/kWh.
ConnectedSolutions is a demand response program that pays you to discharge your home battery during peak grid events. It is one of the highest-paying battery programs in the United States and a major reason why solar + battery systems in Massachusetts have the fastest payback in the country.
When the grid is stressed (typically hot summer afternoons), your utility sends a signal and your battery automatically discharges to help meet demand. You receive a payment for every kW of capacity you provide.
Highest-paying utility in MA
Second-highest payments in MA
Unitil Does Not Participate
Unitil customers in the Fitchburg area cannot enroll in ConnectedSolutions. If you are a Unitil customer considering a battery, the economic case relies on backup power value, SMART battery adder ($0.04/kWh), and future TOU rate arbitrage — not ConnectedSolutions revenue.
ConnectedSolutions + SMART Battery Adder = Double Revenue
You can earn ConnectedSolutions payments AND the SMART 3.0 battery adder ($0.04/kWh) simultaneously. For a 10 kW battery on Eversource, this means $3,250/year in CS payments plus approximately $480/year in SMART battery adder payments — $3,730/year combined.
Massachusetts exempts solar energy equipment from the state 6.25% sales tax under M.G.L. Chapter 64H, Section 6(dd). This applies to solar panels, inverters, racking, wiring, battery storage systems, and installation labor.
No application is required. Your installer applies the exemption automatically on your invoice. This is an instant, point-of-purchase savings.
8 kW System
(Cost: $25,280)
~$1,580
Sales tax saved
11 kW System
(Cost: $34,760)
~$2,173
Sales tax saved
15 kW System
(Cost: $47,400)
~$2,963
Sales tax saved
Under M.G.L. Chapter 59, Section 5, Clause 45th, Massachusetts provides a 20-year property tax exemption for the value added by solar energy systems. 100% of the assessed value increase from your solar installation is exempt from property tax for 20 years.
Solar panels typically add $20,000-$35,000 to a home's market value. Without the exemption, this would increase your property tax bill by $300-$600+ per year at Massachusetts's average 1.35% effective property tax rate.
Added Home Value (Typical)
$25,000-$35,000
Annual Tax Savings
~$400-$600/yr
Avg MA Property Tax Rate
~1.35%
Total 20-Year Savings
$8,000-$12,000
Massachusetts offers a personal income tax credit of 15% of the net cost of your solar energy system, capped at $1,000. While $1,000 is modest compared to what the now-expired federal ITC used to provide, it stacks with every other state incentive.
You claim this credit on your Massachusetts state tax return using Schedule EC (Energy Credit) in the tax year you install the system. The credit is non-refundable — it reduces your state tax liability to $0 but does not generate a refund beyond that. If the credit exceeds your tax liability, the unused portion can be carried forward to the next tax year.
While the residential ITC (Section 25D) is dead, the commercial/third-party ITC (Section 48/48E) is still available for projects that begin construction before July 4, 2026. This matters because when you lease solar panels or sign a Power Purchase Agreement (PPA), the financing company owns the system — and they can claim this credit.
The third-party owner passes some of the ITC savings to you through lower monthly lease payments or a lower PPA rate. You do not claim anything on your tax return.
Deadline: Construction Must Begin Before July 4, 2026
The Section 48/48E commercial ITC requires projects to begin construction before this date. If you are considering a lease or PPA to capture this benefit, start the process now — permitting and interconnection can take 2-4 months.
Massachusetts offers significantly enhanced solar incentives for income-eligible households. If you qualify, your total incentive stack can be worth 2-3x more than the standard rates.
Eversource and National Grid offer income-eligible solar programs with additional discounts on installation costs, often combined with MassSave weatherization.
These programs can reduce your out-of-pocket cost by 50-100% depending on income level and household size.
If rooftop solar is not feasible (renting, shaded roof, condo), Massachusetts has robust community solar programs. Low-income households can subscribe to a community solar farm and receive bill credits — typically 10-20% savings on monthly electric bills — with no rooftop installation, no upfront cost, and no long-term commitment.
Your electric utility determines your net metering credit rate and ConnectedSolutions payments. Here is how the three investor-owned utilities compare.
| Feature | Eversource | National Grid | Unitil |
|---|---|---|---|
| Electric Rate | $0.2836/kWh | $0.32/kWh | $0.2833/kWh |
| Net Metering | 1:1 Retail | 1:1 Retail | 1:1 Retail |
| CS Summer | $275/kW | $225/kW | N/A |
| CS Winter | $50/kW | $50/kW | N/A |
| CS 10kW Battery/yr | $3,250 | $2,750 | $0 |
| SMART 3.0 | $0.03/kWh | $0.03/kWh | $0.03/kWh |
| Annual True-Up | April | March | March |
Understanding the gross cost helps you see how much these incentives actually offset.
Small home / low usage
Average MA home
Large home / EV charging
The average installed cost in Massachusetts ranges from $3.00/W to $3.40/W depending on roof complexity, panel brand, inverter type, and installer. The statewide average is approximately $3.16/W. Battery storage adds $10,000-$15,000 for a 10-13.5 kW system (e.g., Tesla Powerwall, Enphase IQ Battery).
The question everyone asks: "Is solar still worth it without the federal tax credit?" The math says yes — emphatically.
Payback Period
~5.4 yrs
With battery + CS
25-Year Savings
$160K+
Including rate increases
ROI
335%+
Over system lifetime
If you install solar without a battery, you lose ConnectedSolutions revenue and the SMART battery adder, but your upfront cost is lower:
Net Cost (11 kW)
~$31,587
Annual Savings
~$4,541/yr
Payback
~7 years
Many websites still list these as available. They are not. Do not expect these when planning your solar budget.
The 30% federal tax credit for residential solar was eliminated by OBBBA (signed July 4, 2025). Homeowners who buy solar with cash or loan receive $0 in federal tax credits. No phase-down, no extension.
The $2,000 heat pump / $1,200 insulation credit was eliminated alongside Section 25D. No federal energy efficiency credits exist for homeowners in 2026.
This state-backed subsidized loan program closed in 2020 and will not reopen. Current financing options include standard solar loans (5-8% APR), HELOCs, and lease/PPA agreements.
The Solar Renewable Energy Credit program was replaced by SMART. You cannot earn SRECs on new installations. SMART 3.0 is the current equivalent.
Here is the exact order of operations to maximize your incentive stack.
Choose an installer, finalize your system design, sign the contract. Your installer handles permitting, interconnection, and utility paperwork.
Your installer applies the 6.25% sales tax exemption on your invoice automatically. No action required from you. Verify it appears as a line item.
Your installer registers your system in the SMART program through the utility. Once approved and interconnected, SMART payments begin automatically via monthly check or direct deposit.
Once your utility approves interconnection (2-6 weeks after installation), net metering credits appear automatically on your monthly bill. No separate application.
If you have a battery, contact your utility (Eversource or National Grid) or your battery installer to enroll in ConnectedSolutions. Enrollment is typically done during battery commissioning.
When you file your Massachusetts state income taxes, include Schedule EC (Energy Credit). Claim 15% of the net system cost, capped at $1,000. Keep your installation invoice as documentation.
Most MA municipalities automatically apply the 20-year solar property tax exemption. Contact your local assessor to confirm. Some towns require you to file a short application.
Each incentive has its own detailed guide with eligibility requirements, application steps, and calculation examples.
Rates, adders, eligibility, and how to maximize SMART payments.
Enrollment, event schedule, compatible batteries, and payment calculations.
Sales tax and property tax exemption details, filing instructions.
Income thresholds, enhanced SMART rates, weatherization bundling.
NGrid-specific income programs, application process, timeline.
How the commercial ITC works for lease/PPA and what it means for your monthly cost.
July 4, 2026 deadline details, begin-construction rules, safe harbor.
Full rate comparison, TOU schedules, and which utility is better for solar.
Current pricing data, cost per watt by city, and price trends.
Massachusetts has 7 active solar incentive programs in 2026: SMART 3.0 ($0.03/kWh for 20 years), 1:1 net metering for systems up to 25 kW, ConnectedSolutions battery payments ($225-$275/kW), sales tax exemption (6.25%), 20-year property tax exemption, a state tax credit (15% up to $1,000), and Section 48/48E commercial ITC for lease/PPA systems. The federal residential tax credit (Section 25D) expired December 31, 2025 — homeowners who buy with cash or loan receive $0 from the federal government.
No. The federal residential solar Investment Tax Credit (Section 25D) expired on December 31, 2025. Massachusetts homeowners who purchase solar with cash or a loan receive $0 in federal tax credits. However, if you lease solar panels or sign a PPA, the third-party financing company that owns the system can still claim the Section 48/48E commercial ITC (30%+) on projects that begin construction before July 4, 2026. They pass some of that savings to you through lower monthly payments.
Massachusetts does not offer a traditional upfront rebate check for solar. Instead, MA uses performance-based incentives: SMART 3.0 pays $0.03/kWh (or $0.06/kWh for low-income households) for every kWh your system produces over 20 years. For a typical 8 kW system, that is approximately $5,760 over the full term. Additional value comes from 1:1 net metering credits, ConnectedSolutions battery revenue ($225-$275/kW/year), and tax exemptions worth $3,000+ combined.
SMART (Solar Massachusetts Renewable Target) 3.0 is a performance-based incentive. Residential systems up to 25 kW receive $0.03/kWh for every kilowatt-hour produced over 20 years. Low-income qualifying households receive $0.06/kWh. Adders are available: battery storage adds $0.04/kWh, low-income adds $0.05/kWh, canopy adds $0.08/kWh, and community shared solar adds $0.07/kWh. For a typical 8 kW system producing 9,600 kWh/year, the standard rate yields $288/year or $5,760 over the 20-year term.
Residential systems up to 25 kW (Class I) receive 1:1 retail rate credits for excess electricity sent to the grid. All three investor-owned utilities participate: Eversource ($0.2836/kWh), National Grid ($0.32/kWh), and Unitil ($0.2833/kWh). Credits roll over month to month. At the annual true-up (April for Eversource, March for National Grid/Unitil), any remaining excess is paid at the avoided-cost rate.
ConnectedSolutions is a demand response program where battery owners discharge their batteries during peak grid events in summer and winter. Eversource pays $275/kW in summer plus $50/kW in winter. National Grid pays $225/kW summer plus $50/kW winter. A 10 kW battery enrolled with Eversource earns approximately $3,250/year. Unitil does not participate in ConnectedSolutions. You can earn ConnectedSolutions revenue AND SMART 3.0 battery adder payments simultaneously.
Yes. Solar energy equipment is exempt from the Massachusetts 6.25% sales tax under M.G.L. Chapter 64H, Section 6(dd). On a typical $34,760 system (11 kW), this saves approximately $2,173 at the point of purchase. No application is required — your installer applies the exemption automatically on the invoice.
Massachusetts provides a 20-year property tax exemption for solar energy systems under M.G.L. Chapter 59, Section 5, Clause 45th. 100% of the added home value from your solar installation is exempt from property tax increases for 20 years. On a system that adds $25,000-$35,000 in home value, this saves approximately $400-$600 per year depending on your local tax rate (state average ~1.35%).
Yes. Massachusetts still offers a personal income tax credit of 15% of the net system cost (after any rebates), capped at $1,000. You claim it on your Massachusetts state tax return (Schedule EC) in the tax year you install the system. While $1,000 is modest, it stacks with all other state incentives — SMART 3.0, net metering, ConnectedSolutions, and both tax exemptions.
The Mass Solar Loan program ended in 2020. It is no longer available. Current solar financing options include standard solar loans through banks and credit unions (typically 5-8% APR in 2026), home equity loans or HELOCs (often lower rates), and lease/PPA agreements through third-party owners who can pass along the Section 48 commercial ITC savings.
Indirectly, yes. When you lease solar panels or sign a Power Purchase Agreement (PPA), the third-party financing company owns the system and claims the Section 48/48E commercial ITC (30%+ for projects beginning construction before July 4, 2026). They pass some of that savings to you through lower monthly lease payments or a lower PPA rate. You do not file anything on your tax return — the benefit is baked into your monthly cost.
Even without the federal ITC, the payback period for solar in Massachusetts is approximately 7-9 years for most homeowners. This is driven by high electric rates ($0.28-$0.32/kWh), SMART 3.0 payments ($0.03/kWh for 20 years), 1:1 net metering credits, and ConnectedSolutions battery revenue. After payback, solar generates 15-18 years of essentially free electricity before any major maintenance is needed.
Massachusetts has the strongest state solar incentive stack in the United States. SMART 3.0 is the only state-level performance-based incentive of its kind still paying $0.03/kWh for 20 years. ConnectedSolutions battery payments ($225-$275/kW) are among the highest demand response payments nationally. Combined with 1:1 net metering, dual tax exemptions, and electric rates 2-3x the national average, MA delivers the fastest payback period in the country — 7-9 years even without the expired federal credit.
Low-income households in Massachusetts can access enhanced solar incentives: SMART 3.0 pays $0.06/kWh (double the standard rate) for 20 years, worth $11,520 on a typical 8 kW system. The SMART low-income adder adds another $0.05/kWh. MassSave offers income-eligible weatherization programs. Community solar programs provide bill credits without requiring a rooftop installation or upfront cost. Eversource and National Grid also have income-eligible solar programs with additional discounts.
Every home is different. Your exact incentive stack depends on your utility, system size, roof, income status, and financing choice. Get a free quote to see your specific numbers.
Data verified March 2026. Incentive amounts are estimates based on typical system sizes and current program rates. Your actual savings depend on system design, utility, and eligibility.