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The federal residential solar tax credit (Section 25D) died on December 31, 2025. But Massachusetts still has the best state-level solar incentives in America. This is the definitive guide to every program that still works, what each one is worth, and how to stack them for maximum value.
The federal residential solar tax credit (Section 25D) expired December 31, 2025. Massachusetts homeowners who buy solar with cash or a loan receive $0 in federal tax credits. However, Massachusetts still has 7 active state-level programs that make solar financially compelling:
Bottom line: An 8 kW system at $3.15/W costs $25,200 gross. After tax exemptions and credits, your net cost is about $22,625. Over 25 years, total value from all programs exceeds $100,000. Payback: 7-9 years even without any federal credit.
Before we cover what still works, let's be honest about what's gone. Other solar websites still reference these programs. They are wrong.
Homeowners who purchase solar with cash or a loan receive $0 in federal tax credits. This was 30% in 2025, 26% in 2033-34 under previous law. Now it is zero.
The $2,000 heat pump tax credit and $1,200 insulation/efficiency credit are both dead. These were separate from the solar ITC and also expired.
This program provided subsidized 0% interest solar loans through MassCEC. It ended in 2020 and is not coming back. Current solar loans are 5-8% APR through private lenders.
Solar Renewable Energy Certificates were replaced by the SMART program years ago. Existing SREC holders keep their certificates, but no new SRECs are issued.
The federal credit was the big loss. But every Massachusetts state program survived. Here is the full comparison.
| Incentive Program | 2025 | 2026 | Status |
|---|---|---|---|
| Federal Tax Credit (25D) | 30% of system cost (~$7,560) | $0 — Expired Dec 31, 2025 | Expired |
| SMART 3.0 | $0.03/kWh for 20 years | $0.03/kWh for 20 years | Active |
| Net Metering | Full retail credit (up to 10 kW) | Full retail credit (up to 10 kW) | Active |
| ConnectedSolutions | $225-$275/kW battery payments | $225-$275/kW battery payments | Active |
| Sales Tax Exemption | 6.25% saved | 6.25% saved | Active |
| Property Tax Exemption | 100% for 20 years | 100% for 20 years | Active |
| State Tax Credit | 15% up to $1,000 | 15% up to $1,000 | Active |
| Section 48E (Lease/PPA) | 30%+ for third-party owner | 30%+ through July 4, 2026 | Deadline |
| Mass Solar Loan | Already ended (2020) | Ended 2020 | Expired |
| SREC Program | Replaced by SMART years ago | Replaced by SMART | Expired |
| 25C Energy Efficiency | $2,000 heat pump credit | $0 — Expired Dec 31, 2025 | Expired |
The federal 25D credit was worth about $7,560 on a typical 8 kW system. That is a real loss. But the 7 remaining Massachusetts programs generate over $100,000 in lifetime value for the same system. The math still works overwhelmingly in your favor.
The Solar Massachusetts Renewable Target (SMART) program is the single best state-level solar incentive in the country. Under SMART 3.0, residential systems up to 25 kW receive a fixed payment of $0.03 per kWh for every kilowatt-hour produced, guaranteed for 20 years. The rate is locked at enrollment and never changes.
For a typical 8 kW system producing 9,600 kWh/year, SMART pays $288/year or $5,760 over 20 years. For an 11 kW system: $396/year or $7,920 over 20 years. This is on top of your net metering credits.
Income-eligible households receive double the standard rate. An 8 kW system earns $576/year or $11,520 over 20 years. Additional adders can increase this further.
PY2026 capacity: 600 MW AC. Residential systems under 25 kW are cap-exempt — meaning you can enroll even after the cap is reached. Read our complete SMART 3.0 guide.
Based on 1,200 kWh/kW/year MA average production. Standard rate $0.03/kWh. Low-income rate doubles these figures.
Net metering is the single largest value driver for Massachusetts solar. When your panels produce more than you use, excess electricity flows to the grid and you receive credits on your electric bill at the full retail rate.
ConnectedSolutions is a demand response program where your battery discharges during peak grid events (typically 10-30 events per summer, 5-10 per winter). In exchange, your utility pays you per kW of enrolled capacity. This is the highest battery demand response payment in America.
Unitil customers cannot enroll in ConnectedSolutions. If you are in Unitil territory (Fitchburg area), a battery can still provide backup power and SMART battery adder income, but you will not earn demand response payments.
You can earn ConnectedSolutions payments AND the SMART 3.0 battery storage adder (+$0.04/kWh) simultaneously. For an 8 kW solar system with a 10 kW battery on Eversource, that is $3,250/year from ConnectedSolutions plus $672/year from the SMART battery adder = $3,922/year in battery-related income.
Massachusetts exempts solar from both sales tax and property tax. These are automatic — no application required.
Solar equipment and installation labor are exempt from the Massachusetts 6.25% sales tax under M.G.L. Chapter 64H, Section 6(dd).
Automatic — your installer applies the exemption on the invoice.
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.
Based on ~1.35% average MA property tax rate. Solar adds $25K-$35K in home value.
Massachusetts offers a personal income tax credit equal to 15% of the net system cost (after any rebates), capped at $1,000. While modest compared to the now-expired federal credit, it stacks with everything else.
The federal residential ITC (25D) is dead, but the commercial ITC (Section 48/48E) is still available for projects that begin construction before July 4, 2026. When you lease solar panels or sign a PPA, the third-party financing company that owns the system claims this 30%+ credit. They pass some of the savings to you through lower monthly payments.
Section 48E is available for projects that begin construction before July 4, 2026. If you are considering a lease or PPA, you must have your contract signed and construction started before this date. After July 4, lease/PPA monthly costs will likely increase significantly.
This is not a solar incentive — but it matters for total project economics. If you are adding solar and a heat pump together, Mass Save offers up to $10,000 for whole-home heat pump conversions. Bundling solar + heat pump maximizes your solar offset since the heat pump increases your electricity consumption, which means more kWh offset by solar at the full retail rate.
Here is what all 7 active programs are worth combined for an 8 kW system with a 10 kW battery on Eversource. Every dollar below is real, bankable value.
No hand-waving. Here are the actual numbers for a typical Massachusetts homeowner buying an 8 kW solar system with cash in 2026, without any federal tax credit.
Adjust your system size, utility, and battery option to see exactly what each Massachusetts 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.
Not all financing options access the same incentives. Here is what you qualify for depending on how you pay for solar in 2026.
You own the system
Best for: Maximum long-term ROI
You own the system
Best for: $0 down, keep all incentives
Company owns the system
Best for: $0 down, lower monthly bill
Massachusetts has the highest residential electricity rates in the continental United States. This means every kWh your solar panels offset saves you 2-3x more than the same kWh would save in most other states.
Massachusetts electricity rates have increased 25%+ over the past 3 years and show no sign of declining. Every rate increase makes your solar investment more valuable because it increases the value of your net metering credits. Your SMART rate, by contrast, is locked for 20 years — it only gets better relative to rising rates.
Massachusetts has 7 active solar incentive programs in 2026: SMART 3.0 ($0.03/kWh for 20 years), net metering (full retail credit for systems up to 10 kW, 60% for 10-25 kW), ConnectedSolutions battery payments ($225-$275/kW), sales tax exemption (6.25%), 20-year property tax exemption, a state income tax credit (15% up to $1,000), and Section 48E commercial ITC for lease/PPA systems (30%+ through July 4, 2026). The federal residential 25D credit is $0.
No. The federal residential solar tax credit (Section 25D) expired December 31, 2025. Homeowners who buy solar with cash or a loan receive $0 in federal tax credits. However, lease/PPA companies that own the system can still claim Section 48E (30%+) on projects beginning construction before July 4, 2026, passing savings to you via lower monthly payments.
SMART 3.0 pays residential solar owners $0.03/kWh for every kilowatt-hour produced over 20 years. Low-income qualifying households receive $0.06/kWh. Adders can increase the rate: battery storage adds $0.04/kWh, low-income adds $0.05/kWh. For a typical 8 kW system producing 9,600 kWh/year, the standard rate yields $288/year or $5,760 over the full 20-year term.
Even without the federal ITC, most Massachusetts homeowners see payback in 7-9 years. This is driven by high electric rates ($0.28-$0.32/kWh), SMART 3.0 payments, 1:1 net metering, and ConnectedSolutions battery revenue. After payback, you get 15-18 years of essentially free electricity.
ConnectedSolutions is a battery demand response program. 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 with Eversource earns approximately $3,250/year. Unitil does not participate. You earn ConnectedSolutions revenue AND SMART battery adder payments simultaneously.
Massachusetts does not offer an upfront cash rebate for solar. Instead, it uses performance-based incentives (SMART 3.0 pays per kWh over 20 years) and tax exemptions (sales tax and property tax). The SMART program is more valuable than a one-time rebate because it provides ongoing income tied to actual production.
Indirectly, yes. When you lease or sign a PPA, the third-party company owns the system and claims the Section 48E commercial ITC (30%+ for projects beginning construction before July 4, 2026). They pass savings to you through lower monthly payments. You do not file anything on your tax return.
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), home equity loans or HELOCs, and lease/PPA agreements with third-party owners.
Yes. Massachusetts has the best state solar incentives in America. Between SMART 3.0 ($5,760+ over 20 years on an 8 kW system), net metering savings ($2,700+/year with National Grid rates), ConnectedSolutions battery revenue ($3,250/year with Eversource), and tax exemptions ($3,500+ combined), the total value exceeds $75,000 over 25 years for a typical system. Payback is 7-9 years even without the federal credit.
Massachusetts has the strongest state solar incentive stack in America. No other state offers a 20-year performance payment (SMART), the highest battery demand response payments (ConnectedSolutions), 1:1 net metering, AND dual tax exemptions. Combined with electric rates 2-3x the national average, MA delivers the fastest payback period of any state even without the federal ITC.
Deep dive into SMART 3.0 rates, adders, and how to apply.
How to earn $3,250/year from your battery with demand response.
Complete guide to going solar after the 25D ITC expired.
How 1:1 retail credits work, monthly rollover, and annual true-up.
Sales tax and property tax exemptions explained with numbers.
How financing choice affects your incentives and total ROI.
How the commercial ITC works for lease/PPA customers.
Why bundling maximizes your total incentive value.
Current pricing, installer costs, and what drives your cost/watt.
The federal credit is gone, but the 7 Massachusetts programs still deliver a 7-9 year payback. Get a free, no-pressure estimate showing exactly what each incentive is worth for your home.