Why Massachusetts Homeowners Are Going Solar in 2025

Massachusetts remains a national leader in solar adoption, with homeowners and businesses projected to save $3,600+ annually by combining state and federal incentives. The Solar Massachusetts Renewable Target (SMART) program is the cornerstone of these savings, offering guaranteed payments for solar energy production—but time is critical to lock in 2025 rates before capacity blocks fill.

How the SMART Program Works: 2025 Updates

Guaranteed 10-Year Payments
Earn $0.22–$0.26/kWh (utility-dependent) for solar energy produced, plus +$0.06/kWh for battery-equipped systems. Payments are fixed for 10 years, providing predictable returns.

Declining Incentive Blocks
The program’s 3,200 MW capacity is divided into blocks. Each 5% block filled reduces rates by 4%. With blocks filling at 120MW/month, delaying could cost thousands.

Eligibility Requirements for Smart Program

• Systems ≤5 MW installed after 2018
• Grid-connected via Eversource, National Grid, or Unitil

2025 Solar Incentives Stacking Strategy

Maximize savings by combining:

1. Federal Solar Tax Credit (ITC)

• 30% of system cost (including batteries)
• Example: $25,000 system → $7,500 credit

2. Massachusetts State Incentives

• 15% state tax credit (up to $1,000)
• 100% property tax exemption for 20 years
• 6.25% sales tax exemption on equipment

3. Net Metering
Earn 1:1 credits for excess energy sold to the grid, with annual cash payouts.

5-Step Application Checklist for 2025 Savings

1. Consult a MassCEC-Certified Installer

• SMART payments go to system owner

1. Secure Financing

• Use ITC + state credit to reduce loan amounts (current MA rates: 2.99–5.99% APR).
• Make the most of solar energy tax credits

1. Submit SMART Application

• Required docs: installer contract, interconnection agreement, site plans.

1. Install Within 30 Days

• Delays forfeit reserved rates and permitting delays

1. Activate & Monitor

• Track production via utility portals to verify SMART payments.

Avoid These Costly Mistakes

• Missing Block Windows: A 4% rate drop equals $1,440 loss on a 8kW system over 10 years.
• Ignoring Storage Adders: Battery systems boost SMART payments by 27%.
• Overlooking Tax Credits: Failing to claim ITC + state credit leaves $8,500+ unclaimed.

Real Savings Example: 8kW Solar + Battery

• Upfront Cost: $25,000
• Credits/Exemptions: $8,500 (ITC + state)
• 10-Year SMART Earnings: $19,200 ($0.26/kHz × 8,000 kWh/year)
• Net Metering Savings: $12,000 (60% bill reduction)
• Total 10-Year Benefit: $39,700

Act Now on Adders

• Lock in current compensation rates
• Qualify for storage adders
• Secure 2025 tax credits

Why You Should Get Solar in Massachusetts

1. Reduce High Electricity Costs: Massachusetts consistently ranks among the states with the highest residential electricity rates in the country. Installing solar allows you to generate your own power, significantly reducing or even eliminating your monthly electric bills and protecting you from future utility rate hikes.
2. Strong State & Federal Incentives: Massachusetts offers robust programs to make solar more affordable:
   • Federal Solar Investment Tax Credit (ITC): As of now, this federal credit allows you to deduct 30% of the total cost of your solar installation from your federal taxes.
   • SMART Program (Solar Massachusetts Renewable Target): This is a major state-level incentive. Instead of upfront rebates, SMART pays solar owners a fixed rate per kilowatt-hour (kWh) for the solar energy they produce for a set period (typically 10 or 20 years). The exact rate depends on various factors, including when you apply and your utility provider, but it provides a predictable, long-term income stream based on your system’s production.
   • Property Tax Exemption: Your home’s assessed value may increase due to the solar installation, but Massachusetts state law exempts this added value from property taxes for 20 years.
   • Sales Tax Exemption: Solar energy systems are exempt from state sales tax in Massachusetts, saving you 6.25% on the equipment cost right away.
3. Net Metering: Massachusetts has favorable net metering policies. This means that when your solar panels produce more electricity than you are using at that moment, the excess power is sent back to the grid, and your utility company credits you for it on your bill (often at the retail rate). These credits can offset the cost of electricity you draw from the grid at night or on cloudy days.
4. Environmental Benefits: By generating clean electricity from the sun, you reduce your household’s reliance on fossil fuels. This helps lower greenhouse gas emissions, combat climate change, and contributes to Massachusetts’ clean energy goals.
5. Increase Home Value: Studies consistently show that homes with solar panel systems tend to sell faster and at higher prices than comparable homes without them. Buyers often see the long-term energy savings as a valuable asset.
6. Energy Independence: Generating your own power reduces your dependence on the utility grid and volatile energy market prices, giving you greater control over your energy costs. Pairing solar with battery storage can further enhance energy resilience during power outages.

In summary, the combination of high electricity costs and strong financial incentives (Federal ITC, SMART program, tax exemptions, net metering) makes Massachusetts a financially attractive state for homeowners considering solar energy, alongside the significant environmental benefits

Free Resource: Download the Massachusetts DOER’s SMART Program Guide [https://www.mass.gov/info-details/solar-massachusetts-renewable-target-smart-program].

All financial projections based on 2025 rates and average MA energy costs. Incentives subject to eligibility.

Sources:
[1] https://ppl-ai-file-upload.s3.amazonaws.com/web/direct-files/48377569/6bfc29e6-4030-450c-a7f8-f9333fa138ee/Massachusetts-homeowners-and-businesses-can-unlock-substantial-savings-in-2025-through-strategic-use-of-solar-incentives.docx
[2] https://www.mass.gov/info-details/solar-massachusetts-renewable-target-smart-program

[3] https://www.solar.com/learn/massachusetts-smart-solar-program-complete-overview/
[4] https://www.solarreviews.com/blog/massachusetts-smart-program-replaces-srecs
[5] https://www.eversource.com/content/residential/save-money-energy/clean-energy-options/solar-energy/smart-program
[6] https://blog.catalystpower.com/more-power-to-you/what-are-the-new-benefits-in-the-2024-updates-to-mas-smart-program
[7] https://masmartsolar.com/overview.php
[8] https://seia.org/news/massachusetts-clean-energy-advocates-welcome-smart-program-order/
[9] https://www.energysage.com/local-data/storage-rebates-incentives/ma/
[10] https://energynews.us/2024/07/25/massachusetts-aims-to-adapt-with-the-times-with-updates-to-solar-incentive-program/
[11] https://joinsolargardens.com/massachusetts-smart-program/
[12] https://masmartsolar.com
[13] https://www.mass.gov/solar-massachusetts-renewable-target-smart
[14] https://www.bostonsolar.us/solar-blog-resource-center/blog/which-smart-solar-incentive-program-blocks-can-you-still-qualify-for-in-2021/
[15] https://www.titanenergyne.com/solar-massachusetts-renewable-target-program/
[16] https://www.thisoldhouse.com/solar-alternative-energy/reviews/solar-incentives-massachusetts
[17] https://programs.dsireusa.org/system/program/detail/22111
[18] https://www.canarymedia.com/articles/enn/massachusetts-aims-to-adapt-with-the-times-with-updates-to-solar-incentive-program
[19] https://www.linkedin.com/pulse/understanding-proposed-changes-ma-smart-program-swo7f

Disclaimer: The information provided in this blog post is intended for general knowledge and informational purposes only, and does not constitute professional financial or legal advice. While we strive to ensure the accuracy and completeness of the information presented, solar incentive programs and regulations are subject to change.

It is essential to consult with a qualified solar installer and/or tax professional for the most up-to-date and personalized advice regarding solar incentives in Massachusetts. They can assess your specific circumstances, provide tailored recommendations, and ensure you maximize your solar savings opportunities.