Massachusetts may not exactly be known for its rays of sunshine, but solar power is still one of the state’s most valuable assets.
So, you may be thinking- “I’m a Massachusetts resident and/or business owner. What are the benefits of going solar?”
It’s simple-
- Renewable energy source
- Reduces electricity bills
- Low maintenance costs
- Technology advancement and industry development
There are many benefits to going solar, especially in Massachusetts. Between the SMART Program, MLP Rebate, federal tax credit and net-metering, some individual’s payback periods are less than four years. On average, most payback periods are between five and seven years.
Incentive Programs
Most home and business owners qualify for an incentive program, investment tax credit (federal solar) and net metering throughout Massachusetts. Below are just a few of the state’s clean energy initiatives and how they will affect your solar investment for the better.
SMART Program
In Massachusetts, there is currently 1023 MW of capacity remaining under SMART, a declining block tariff program where electrical utilities pay qualified customers a base compensation rate per kilowatt hour (kW) of solar production for 10 or 20 years depending on the size of their system. Factors that affect this compensation rate include the size of the system, cost of energy, location (presiding electrical utility) and capacity block (essentially when a customer applies to interconnect their solar system with the utility).
Here is a quick example for a homeowner who has a system sized <25kW mounted on their home’s rooftop in Eversource East territory during the investment block (5) period.
SMART Compensation: $0.28878 (Block 5 rate) – $0.19698 (value of energy) = $0.0918/kWh for 10 years
System produced 12.92MWh per year: $0.0918 x 12920 kWh= $1,186/year in SMART payments
~ 10-year accumulation of $11,860
MLP Solar Rebate Program
The Department of Energy Resources in partnership with Energy New England and Massachusetts Municipal Electric Cooperative, offers a rebate program for solar photovoltaic systems installed within MLP territories. Participating MLP’s in partnership with DOER will pay $1.20 per watt up to 50% of the total system costs for systems up to 25 kW DC. Customers should work with their installer or developer to file for the MLP rebate as there are technical requirements and application procedures specific to the town in which they reside. At this point, DOER has dedicated $2.3 million to this program.
For example, if you are an MLP interconnecting customer with a system size of 9500 kW, you will receive a rebate in the amount of $11,400, or half of the system cost (whichever comes first).
Investment Tax Credit
The Investment Tax Credit (ITC), also known as the federal solar tax credit, allows the home or business owner, to deduct 26% of the costs of the solar installation from your annual taxes. For example, if your system costs $30,000 to install, you can deduct a credit of $7,800 when you file your annual federal taxes. If you do not have enough tax liability that year to claim the full credit, it can be “rolled over” to the next year. Specifics in doing so are best handled with your tax advisor.
Net-metering
Massachusetts residents and/or business owners, depending on their site’s consumption and production, can sell back excess energy generated by their solar system back to their electrical utility. During spring and summer months when solar production is highest, customers will often use less energy from the grid than they consume and export energy back to the utility for net-metering credits. Individuals can also use up these stored credits during the winter months when production is lower, and energy consumption is higher.
Modified Accelerated Cost Recovery System (MACRS) + Bonus Depreciation
MACRS allows business owners to recover their solar investment through depreciation deductions from their annual taxes over 5 years. According to the 2017 Tax Cuts and Jobs Act, qualified properties can opt in to depreciate 100% of the costs of their renewable energy investments. This depreciation is highly dependent on your businesses’ tax rate and it is recommended to work with your tax advisor to take advantage of this benefit.
If you are considered a Massachusetts resident and/ or business owner, it is highly recommended that you connect with a local solar energy contractor, such as BD Electrical, to learn more about the States clean energy initiatives. It may be the perfect time to make the switch to solar energy!
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There are plenty of options available to help you go solar at your southern Massachusetts home or place of business. Look to BD Electrical to help you find the funds and handle the installation of your solar grid.
508-617-0800 | https://bdelectrical.services/
