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Section 25D expired December 31, 2025. Here's the honest math.
Still worth it for most MA homeowners
Massachusetts has the highest residential electric rates in the continental US ($0.33/kWh), SMART 3.0 paying $0.03/kWh for 20 years, 1:1 net metering at full retail rate, a $1,000 state tax credit, and sales and property tax exemptions. These state incentives are so strong that losing the federal ITC does not kill the numbers — it shifts them.
OBBBA signed into law — kills Section 25D and 25C effective end of 2025
Section 25D expires — $0 residential ITC for cash/loan buyers
Section 48/48E deadline — third-party projects must begin construction before this date for 30% ITC
Most states relied primarily on the federal ITC. MA has seven independent incentives that make solar financially viable even with $0 in federal credits.
$0.33/kWh average (76% above national)
Massachusetts has the highest average residential electric rates in the continental United States at approximately $0.33/kWh (Eversource ~$0.34, National Grid ~$0.33, Unitil ~$0.29). The national average is $0.19/kWh. Every kilowatt-hour your solar panels produce offsets electricity that costs 76% more than average — this is the fundamental reason solar pays back faster in MA than nearly any other state.
$0.03/kWh x 20 years
The Solar Massachusetts Renewable Target (SMART) 3.0 program pays residential solar owners $0.03/kWh for every kilowatt-hour produced, locked in for 20 years. For an 11 kW system producing ~13,200 kWh/year, that is approximately $396/year or $7,920 over the full term. Battery storage adds an additional $0.04/kWh adder. Low-income households qualify for $0.06/kWh base rate.
Full retail credit ($0.33/kWh)
Massachusetts requires all three investor-owned utilities (Eversource, National Grid, Unitil) to credit excess solar production at the full retail rate for residential Class I systems up to 25 kW AC. Credits roll over monthly and annual true-up pays net excess at avoided-cost rate. At $0.33/kWh, net metering in MA is worth more than in almost any other state.
15% of cost, up to $1,000
Massachusetts offers a state income tax credit equal to 15% of the cost of a residential solar installation, capped at $1,000. For a typical 11 kW system costing $33,000-$37,000, the 15% calculation exceeds $1,000, so the credit is effectively a flat $1,000 for most systems. Claimed on your MA state tax return.
100% exempt from assessment
Solar installations are 100% exempt from property tax assessment in Massachusetts for 20 years. Your property taxes will not increase despite the added value of the solar system. With MA average property tax rates around 1.2% and solar adding $25,000-$35,000 in home value, this exemption saves approximately $500-$800 per year.
6.25% saved on purchase
All solar energy equipment and installation is exempt from Massachusetts' 6.25% sales tax. On an 11 kW system costing $33,000-$37,000, this saves approximately $2,000-$2,300 at purchase. Applied automatically — no application needed.
$225-$1,500/yr per battery
If you add a battery, Eversource and National Grid pay you $225-$1,500 per year through the ConnectedSolutions demand response program. Your battery automatically dispatches during peak events (typically 10-60 per summer). Revenue varies by utility and battery size. This is additional income on top of SMART and net metering.
Versus net system cost of ~$31,500. Solar pays for itself 4.5x over — without any federal tax credit.
Real numbers for an 11 kW system in Massachusetts. The only difference is the loss of the 30% federal ITC — every state incentive remains the same.
| Item | 2025 (With 30% ITC) | 2026 (No ITC) |
|---|---|---|
| System Cost (11 kW) | $34,760 | $34,760 |
| Federal ITC (Section 25D) | -$10,428 (30%) | $0 (EXPIRED) |
| MA State Tax Credit | -$1,000 | -$1,000 |
| Sales Tax Saved (6.25%) | -$2,173 | -$2,173 |
| Net Cost After Incentives | $21,159 | $31,587 |
| SMART Income (20 yr) | $7,920 | $7,920 |
| Net Metering (25 yr) | ~$87,500 | ~$87,500 |
| Property Tax Saved (20 yr) | ~$12,000 | ~$12,000 |
| Payback Period | ~5.5 years | ~7.8 years |
| 25-Year Net Savings | ~$160,000+ | ~$140,000+ |
Payback went from ~5.5 years to ~7.8 years — an increase of ~2.3 years. 25-year savings dropped from ~$160K to ~$140K. That is a real difference, but MA solar is still one of the best investments available to homeowners. The panel warranty is 25 years. The payback falls within one-third of that lifespan.
Adjust system size, utility, and financing type to see your personalized payback without the federal ITC.
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.
Section 25D (residential) is dead, but Section 48/48E (commercial) is still active. This changes the lease and PPA calculus significantly.
A financing company (not the installer, not you) owns the solar system on your roof. You pay for the energy it produces.
As a business entity, the system owner claims the 30% Section 48/48E ITC. This reduces their cost by ~30%.
You get $0 upfront with PPA rates 10-20% below retail, or lower fixed lease payments. Immediate savings from day 1.
Section 48/48E requires projects to begin construction before July 4, 2026. After this date, PPA/lease rates will likely increase significantly.
Cash vs Loan vs Lease comparisonIf you are considering a solar PPA or lease in Massachusetts, signing before July 4, 2026 is important. After this date, the third-party can no longer claim the 30% ITC, which means PPA rates will likely increase 15-25%.
Honest numbers for every buyer type, without the federal ITC.
Net cost: ~$31,500 | 25-yr savings: ~$140K+
$0 upfront with solar loan (5.5-8% APR)
$0 upfront | Immediate savings | July 2026 deadline
Straight answers about solar without the tax credit in Massachusetts.
Yes. Massachusetts is one of the strongest solar markets in the country even without the federal ITC. The combination of the highest residential electric rates in the continental US ($0.33/kWh), SMART 3.0 payments ($0.03/kWh for 20 years), 1:1 net metering at full retail rate, a $1,000 state tax credit, 20-year property tax exemption, and 6.25% sales tax exemption creates a payback period of approximately 7.5-8.5 years for cash buyers. That is still well within the 25-year panel warranty period, and 25-year savings exceed $140,000.
You do not personally receive a tax credit, but the benefit is passed through to you. With a solar lease or PPA, a third-party financing company owns the system on your roof. As a business entity, the third-party system owner can claim the 30% commercial Investment Tax Credit under Section 48/48E for projects beginning construction before July 4, 2026. The savings are passed through as lower PPA rates or lease payments. The installer does not claim the credit — the system owner (financing company) does.
For a cash purchase of an 11 kW system in Massachusetts, the payback period is approximately 7.5-8.5 years without the federal ITC. This accounts for SMART 3.0 income (~$396/yr), net metering credits (~$3,500/yr at $0.33/kWh), the $1,000 state tax credit, and tax exemptions. Before the ITC expired, payback was approximately 5-6 years. The increase is meaningful but MA solar still pays for itself well within the 25-year panel warranty period.
Massachusetts still has a strong incentive stack: (1) SMART 3.0 program paying $0.03/kWh for 20 years, (2) 1:1 net metering at $0.33/kWh retail rate, (3) $1,000 state income tax credit, (4) 20-year property tax exemption, (5) 6.25% sales tax exemption, (6) ConnectedSolutions battery revenue ($225-$1,500/yr), and (7) solar loans available at 5.5-8% APR through local lenders and credit unions. The only thing that changed is the federal residential ITC (Section 25D) going to $0.
No. The One Big Beautiful Bill Act (OBBBA), signed July 4, 2025, eliminated Section 25D with no scheduled return date. There is no pending legislation to restore it. Waiting means paying $0.33/kWh+ electric bills every month while electricity rates continue rising (MA rates have increased an average of 4-6% annually). A system installed today at $34,000 without the ITC will still save over $140,000 in 25 years. Additionally, the Section 48 third-party ITC (for lease/PPA) expires July 4, 2026 — after that date, even the PPA/lease workaround disappears.
Cash purchase still produces the highest 25-year savings (approximately $140,000+) because you keep 100% of SMART income and net metering credits. However, the gap between cash and PPA/lease has narrowed significantly without the ITC. A PPA or lease costs $0 down, provides immediate savings (10-20% below retail rate), and the third-party owner can still claim the 30% Section 48 ITC through July 4, 2026. For homeowners who do not want to spend $31,000-$35,000 upfront, a PPA or lease is a strong 2026 option. Solar loans at 5.5-8% APR through local lenders and credit unions are also available for those who want ownership without the full upfront cost.
Full overview of solar in MA — costs, incentives, utilities, and next steps.
How SMART 3.0 works, current rates, adders, and enrollment.
City-specific pricing, permitting, and installer data for Boston.
Battery, low-income, canopy, and other adders that boost your SMART rate.
Utility-specific rates, interconnection, and net metering comparison.
When you need a panel upgrade and what it costs.
All MA solar and heat pump guides in one place.
Honest pricing data, no sugar-coating. What solar actually costs now.
The math on whether solar still pencils out without federal credits.
Spot predatory tactics, inflated quotes, and shady financing.
See Your Payback Without the ITC
Personalized numbers for your MA home: system size, cost, SMART income, net metering credits, and exact payback period — all calculated without the federal 25D tax credit.