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Section 25D is dead — homeowners get $0 in federal tax credits for solar in 2026. But with a lease or PPA, a third-party owner claims the 30% ITC under Section 48/48E and passes savings to you. At MA's high rates ($0.28/kWh), plus SMART 3.0 production payments and 1:1 net metering, Massachusetts has among the richest solar TPO economics in the country.
$0.28/kWh
MA Avg Rate
$110–175/mo
Lease Range
$0.12–0.18/kWh
PPA Range
Jul 4, 2026
48/48E Deadline
What MA homeowners need to know in 60 seconds
Section 25D is dead. If you buy solar with cash or a loan in 2026, you receive $0 from the IRS. The residential solar tax credit expired December 31, 2025 and is not coming back.
But Section 48/48E is alive. When a third-party financing company owns the solar system on your roof via a lease or PPA, that company claims the 30% Investment Tax Credit. The savings flow to you as lower monthly payments — typically $110–175/mo for a lease or $0.12–0.18/kWh for a PPA.
MA has the richest incentive stacking in New England. At $0.28/kWh, plus SMART 3.0 production payments ($0.03/kWh for 20 years), 1:1 retail net metering, ConnectedSolutions battery revenue ($225–$275/kW), 6.25% sales tax exemption, and a 20-year property tax exemption — Massachusetts delivers the most comprehensive TPO value proposition. The trade-off: higher install costs ($3.25/W) and the SMART 3.0 cap (600 MW) could fill up.
The financing company claims the credit — not you, not the installer. Here is exactly how the 30% ITC flows from the tax code to your lower monthly payment.
A financing company (the "third-party owner") purchases and installs solar panels on your roof. You don't buy the system — you agree to either lease it (fixed monthly payment) or buy the power it produces (PPA, per-kWh rate).
Because the financing company legally owns the system, it files IRS Form 3468 and claims the 30% Investment Tax Credit under Section 48/48E. On a $30,000 system, that's $9,000 back from the IRS. The company also claims MACRS depreciation (5-year accelerated schedule + 20% bonus in 2026).
The financing company doesn't pocket the ITC — it uses the $9,000+ in tax benefits to reduce your monthly payment. This is why lease/PPA payments are typically 20–40% lower than what you'd pay on a standard solar loan without the ITC.
Your lease/PPA payment is locked in below your current electric bill rate. You save money starting month one. The system owner handles all maintenance, monitoring, and warranty claims.
With NuWatt's Propel program, the third-party owner transfers full ownership to you at year 5 — after the ITC recapture period expires. You get the best of both worlds: ITC savings upfront, full ownership long-term.
Note: Propel is NOT currently available in Massachusetts. Standard leases and PPAs are available today from Sunrun, Tesla, SunPower, and other providers.
The financing company claims the ITC on IRS Form 3468 — not you, not the installer. In Massachusetts, the TPO company also typically claims SMART 3.0 production payments ($0.03/kWh for 20 years). The SMART adder is specifically available for lease/PPA systems. These combined revenue streams are what allow MA lease/PPA rates to be among the most competitive in the country despite higher install costs.
The investment tax credit that keeps solar leases and PPAs financially viable in 2026.
Credit Rate
30%
With prevailing wage + apprenticeship compliance (6% without)
Who Claims It
The system owner (financing company)
NOT the homeowner, NOT the installer
Residential Eligibility
Yes — via third-party ownership
TPO company owns the system, leases/PPAs it to you
Construction Deadline
Begin construction before July 4, 2026
OBBBA sunset — projects must start before this date
Minimum Hold Period
5 years
System owner must hold for 5 years or face ITC recapture
Stackable Bonuses
Domestic content (+10%), Energy community (+10%)
Can reach 50%+ total credit on qualifying projects
MACRS Depreciation
5-year schedule + 20% bonus (2026)
Additional tax benefit for the system owner
$0.03/kWh residential (20 years) | $0.06/kWh low-income
Eversource $275/kW | NGrid $225/kW | Unitil: N/A
Full 1:1 retail credit for systems ≤60 kW
6.25% sales tax + 20-year property tax exempt
This incentive stack makes Massachusetts one of the top states nationally for solar TPO economics. The TPO provider captures ITC + SMART payments + net metering value and passes the combined savings to you through lower monthly rates.
Aug 2022
IRA signed — Section 48E created alongside Section 25D extension
Dec 2025
Section 25D (residential ITC) expires — homeowners get $0
Jan 2026
Section 48/48E remains available for commercial + third-party owners
Jul 4, 2026
OBBBA deadline — must begin construction before this date
Side-by-side comparison for a typical 8 kW system at $3.25/W = $26,000 in Massachusetts.
Upfront Cost
$26,000
Federal ITC
$0 (25D expired)
SMART 3.0
$0.03/kWh (20 yrs)
Est. Payback
~9 years (w/ SMART)
You Own?
Yes, immediately
SMART payments help, but $26,000 upfront with $0 ITC is steep. Highest long-term savings.
Upfront Cost
$0 down
Federal ITC
$0 (25D expired)
Monthly Payment
$165–$270/mo
Interest Rate
6–8% APR
You Own?
Yes, immediately
$0 down ownership. SMART income offsets some payments. No ITC to reduce principal.
Upfront Cost
$0 down
Federal ITC
30% (owner claims)
Monthly Payment
$110–175/mo
Maintenance
Included
You Own?
No (buyout option)
$0 down, ITC + SMART both captured by owner = very competitive monthly rate at $0.28/kWh.
Upfront Cost
$0 down
Federal ITC
30% (owner claims)
Rate
$0.12–0.18/kWh
Maintenance
Included
You Own?
No (buyout option)
At $0.15/kWh vs $0.28/kWh you save $0.13/kWh. SMART adds even more value.
NuWatt's Propel program (TPO for 5 years, then ownership transfer) is currently available in Maine and Texas only. Given MA's exceptionally strong incentive stack (SMART + NM + ConnectedSolutions), Propel could be particularly compelling here. Standard leases and PPAs are widely available today.
Massachusetts has the most comprehensive solar incentive framework in New England.
The SMART (Solar Massachusetts Renewable Target) 3.0 program pays $0.03/kWh for residential systems (≤25 kW) for 20 years. Low-income projects receive $0.06/kWh. The SMART adder is specifically available for lease/PPA systems. A typical 8 kW system produces ~9,600 kWh/year, generating ~$288/year in SMART income that the TPO provider captures and passes to you as lower monthly rates.
Massachusetts offers full 1:1 retail net metering for Class I systems (≤60 kW residential). Every kWh exported earns a full retail credit. This is among the most favorable NM policies in the country — better than RI (80% retail), NH (~85% retail), and far better than Texas (no statewide NM). Credits roll month-to-month.
MA's ConnectedSolutions demand-response program pays for battery storage dispatch during summer peaks. Eversource pays $275/kW + $50 winter, National Grid pays $225/kW + $50 winter. Note: Unitil does NOT participate. A battery paired with your solar lease generates additional income from a separate program — stacking savings on top of your solar lease benefits.
Massachusetts offers both a 6.25% sales tax exemption on solar equipment AND a 20-year property tax exemption. Combined, these reduce total system costs for the TPO provider (passed to you as lower rates) and ensure solar adds home value without adding tax burden. Both exemptions are statewide — no municipal opt-in required.
We believe in full transparency. Here is what works against TPO in Massachusetts.
SMART payments typically go to the system owner in TPO contracts — verify contract terms
Higher install costs ($3.25/W) than national average — but TPO avoids upfront payment
Standard lease means you never own the system (Propel not available in MA)
Typical 2–3% annual lease escalator — though MA utility rates have risen 4%+ annually
Unitil territory does NOT participate in ConnectedSolutions — battery DR income unavailable
High demand for solar in MA can mean longer wait times for installation
SMART 3.0 cap (600 MW PY2026) could fill up — timing matters
Your utility territory affects both your savings and ConnectedSolutions eligibility:
Eversource
~$0.2836/kWh
CS: $275/kW + $50 winter
Best savings
National Grid
~$0.32/kWh
CS: $225/kW + $50 winter
Strong savings
Unitil
~$0.2833/kWh
CS: NOT participating
No battery DR
The best option depends on your credit, tax situation, and energy goals.
Compare My OptionsThese deadlines determine whether your TPO provider can claim the ITC for your MA project.
July 4, 2026
The One Big Beautiful Bill Act (OBBBA) requires projects to begin construction before July 4, 2026 to qualify for Section 48/48E. After this date, the 30% ITC for third-party solar owners may be eliminated or significantly reduced.
June 30, 2026
If bundling solar + EV charger, the $1,000 EV charger credit (Section 30C) expires June 30, 2026.
2027
The 20% bonus depreciation available in 2026 drops to 0% in 2027, reducing the TPO company's tax benefit and potentially increasing your lease/PPA payments.
MA solar permitting typically takes 6–10 weeks due to high demand. To meet the July 4, 2026 deadline, start the process by early spring 2026. SMART 3.0 enrollment is first-come, first-served (600 MW cap for PY2026).
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Straight answers to the most common Massachusetts solar financing questions in 2026.
Not directly as a homeowner. Section 25D expired December 31, 2025 — cash or loan buyers receive $0. However, MA has a strong alternative: through a lease or PPA, the third-party system owner claims the 30% Section 48/48E ITC AND collects SMART 3.0 payments ($0.03/kWh for 20 years). Both benefits are passed to you as lower monthly rates.
Yes — Massachusetts is one of the best states in the country for solar leases and PPAs. At $0.28/kWh, a PPA at $0.12–0.18/kWh saves you $0.10–0.16 per kilowatt-hour from day one. The combination of high rates, 1:1 net metering, SMART payments, and strong tax exemptions makes MA TPO economics among the strongest nationally.
SMART (Solar Massachusetts Renewable Target) 3.0 pays solar system owners $0.03/kWh for residential systems (≤25 kW) for 20 years. Low-income projects receive $0.06/kWh. The SMART adder is available for lease/PPA systems. In a TPO arrangement, the system owner typically claims SMART payments and factors them into your lower lease/PPA rate. A typical 8 kW system produces ~9,600 kWh/year, generating ~$288/year in SMART income.
Massachusetts offers full 1:1 retail net metering for Class I systems (≤60 kW residential). Every kWh exported earns a full retail credit. Credits roll month-to-month. This is among the most favorable net metering policies in the country and maximizes the value of a TPO system. Unlike RI (80% retail) or NH (~85% retail), MA gives you full value for every exported kWh.
Eversource (~$0.2836/kWh) and National Grid (~$0.32/kWh) both support 1:1 net metering and SMART payments. Eversource rates are slightly higher, meaning marginally better savings. For ConnectedSolutions battery DR, Eversource pays $275/kW summer + $50 winter, while National Grid pays $225/kW + $50. Unitil (~$0.2833/kWh) does NOT participate in ConnectedSolutions.
Yes. ConnectedSolutions is a demand-response program that pays for battery storage dispatch during summer peak events. Eversource pays $275/kW, National Grid pays $225/kW (Unitil does NOT participate). A battery paired with your solar lease generates additional income. These are separate agreements that complement each other for maximum savings.
Not yet. NuWatt's Propel program is currently available in Maine and Texas. Given MA's strong incentive environment (SMART, ConnectedSolutions, high rates, 1:1 NM), Propel could be particularly compelling here. Standard solar leases and PPAs are widely available in MA from multiple national and local providers.
The critical deadline is July 4, 2026. The third-party system owner must begin construction before this date to claim the Section 48/48E 30% ITC. MA solar permitting typically takes 6–10 weeks due to high demand. Start the process by early spring 2026 to ensure your project qualifies. Also note the SMART 3.0 cap (600 MW for PY2026) — enrollment is first-come, first-served.
Find out your exact lease or PPA rate for your Massachusetts home. With SMART 3.0 payments, 1:1 net metering, and ConnectedSolutions, MA offers some of the strongest TPO economics in the country. The Section 48/48E deadline is July 4, 2026.
$0
Down Payment
30%
ITC (via TPO)
Day 1
Savings Start