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Property tax, sales tax, and state income tax benefits for MA solar owners
Section 25D (residential ITC): EXPIRED December 31, 2025. $0 for homeowner cash or loan solar purchases.
Section 48 (commercial ITC): Still active for lease/PPA (third-party financing company claims it). Deadline: July 4, 2026.
State tax benefits are now your BIGGEST savings after SMART and net metering
MA offers three separate tax benefits that combine for over $10,000 in savings on a typical 11 kW system.
Solar adds ~4% to your home value but $0 to your tax bill. The exemption lasts a full 20 years.
Typical savings (11 kW):
$396/yr
$396/yr x 20 = $7,920
All solar equipment and installation exempt from MA sales tax. One-time savings at purchase.
Typical savings (11 kW):
$2,173
$34,760 x 6.25% = saved
15% of system cost, capped at $1,000. Claimed on MA Form 1, Schedule EC.
Maximum credit:
$1,000
One-time credit on your state return
Combined 20-Year Total (11 kW System)
$11,093
From tax benefits alone — before SMART, net metering, or ConnectedSolutions
Based on MA average cost of $3.16/W and 1.14% effective property tax rate.
| System | Cost | Property Tax (20yr) | Sales Tax Saved | State Credit | 20-Year Total |
|---|---|---|---|---|---|
| 5 kW | $15,800 | $3,600 | $988 | $1,000 | $5,588 |
| 8 kW | $25,280 | $5,760 | $1,580 | $1,000 | $8,340 |
| 11 kWTypical | $34,760 | $7,920 | $2,173 | $1,000 | $11,093 |
| 13 kW | $41,080 | $9,360 | $2,568 | $1,000 | $12,928 |
| 15 kW | $47,400 | $10,800 | $2,963 | $1,000 | $14,763 |
Note: Property tax uses MA average effective rate (1.14%). Actual rates vary by municipality. 20-year savings assume constant rates; actual savings may be higher with rate increases.
MGL Ch. 59, Sec. 5, Clause 45
Step 1: Install
Complete your solar installation. Get the final invoice and inspection certificate.
Step 2: Notify Assessor
Contact your local municipal tax assessor with installation documentation. The exemption is applied automatically in most MA municipalities.
Step 3: Verify
Check your next tax bill to confirm assessed value did not increase. If it went up, contact the assessor immediately.
Note: In most MA municipalities, the assessor automatically excludes solar value. But always verify — requirements can vary by town.
Automatic at point of sale
What to Do
Your installer should NOT charge sales tax on the solar system. This is automatic — no paperwork needed.
Verify Your Invoice
Always check your final invoice to confirm 6.25% sales tax was NOT charged. If it was, contact the installer for a correction.
Form 1, Schedule EC
Step 1: Gather Docs
Get your final installation invoice showing total system cost and date placed in service.
Step 2: File Schedule EC
Complete Form 1, Schedule EC (Energy Credit) with your MA state tax return for the year the system was placed in service.
Step 3: Receive Credit
The 15% credit (max $1,000) reduces your state tax liability. It is non-refundable — it reduces what you owe but excess is not paid out as cash.
Important: This is a Massachusetts STATE credit, not a federal credit. It is unaffected by the Section 25D expiration. It remains fully available in 2026.
If you buy (cash or loan):
No federal tax credit. You rely on MA state tax benefits, SMART 3.0, and net metering for your return on investment. Typical payback is 7.5-8.5 years.
If you lease or PPA:
The financing company claims Section 48 (30% ITC) and passes the savings to you as a lower electricity rate. You need no tax liability — you do not own the system.
Answers to the most common questions about MA solar tax exemptions.
Massachusetts offers three solar tax benefits: (1) a 20-year property tax exemption that prevents solar from increasing your property tax bill, (2) a 6.25% sales tax exemption on all solar equipment and installation, and (3) a state income tax credit of 15% of system cost, capped at $1,000. Combined, these save homeowners $10,000 or more over 20 years on a typical 11 kW system.
Under Massachusetts General Laws Chapter 59, Section 5, Clause 45, solar energy systems are exempt from property tax assessment for 20 years from the date of installation. Solar typically adds about 4% to home market value, but with the exemption your assessed value for tax purposes does not increase. At the average MA effective property tax rate of 1.14%, an 11 kW system saves approximately $396 per year, totaling $7,920 over the full 20-year exemption period.
Yes. The 6.25% Massachusetts sales tax exemption on solar energy equipment is automatic. Your solar installer should not charge sales tax on the system. Always verify your invoice to confirm no sales tax was applied. If sales tax was incorrectly charged, contact your installer for a correction or file for a refund with the MA Department of Revenue.
The Massachusetts state income tax credit of 15% (up to $1,000) is claimed on your state tax return using Form 1, Schedule EC (Energy Credit). You will need your final installation invoice showing the total system cost. The credit is non-refundable, meaning it reduces your tax liability but any excess is not returned as a cash payment. File Schedule EC with your annual Massachusetts tax return for the year the system was placed in service.
No. The federal residential solar tax credit (Section 25D) expired on December 31, 2025 under the One Big Beautiful Bill Act signed July 4, 2025. There is zero federal tax credit for homeowner cash or loan solar purchases in 2026. However, if you choose a solar lease or PPA, the third-party financing company can claim the Section 48 commercial ITC (still active through July 4, 2026) and pass the savings to you as a lower electricity rate.
Battery storage systems installed as an integral part of a solar energy system generally qualify for the same property tax exemption under MA General Laws Chapter 59. If you add a battery as part of your solar installation, it should be covered. If you add battery storage after the initial solar installation, contact your local assessor to confirm the additional equipment is included in the exemption.
The sales tax exemption was a one-time savings at purchase and does not transfer. The state income tax credit was claimed on your return and does not transfer. The property tax exemption transfers with the property — the new homeowner continues to benefit from the remaining years of the 20-year exemption period. Solar increases your home market value, so you benefit from a higher sale price while the buyer benefits from the ongoing property tax exemption.
For a typical 11 kW system costing about $34,760: the sales tax exemption saves $2,173 at purchase, the state income tax credit saves $1,000, and the property tax exemption saves approximately $396 per year for 20 years ($7,920 total). Combined first-year tax benefit is $3,569, and the 20-year total is $11,093. These state benefits are now the primary tax savings since the federal 25D ITC expired.
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