Going Solar in 2020

06 Feb Going Solar in 2020

In 2020 some solar incentives remain active while others have changed. Here’s what this year holds for solar incentives and how they can help you make the clean energy transition as affordable as possible.

The Federal ITC

The Federal Investment Tax Credit for solar has changed for 2020. The ITC has decreased, but homes and businesses that install solar this year can still take advantage of a tax credit up to 26% of the cost of their solar project. This incentive helps reduce the overall costs of the system, shortens the time it takes to see a full return on the investment, and can save people thousands of dollars when all is said and done. This program is set to decline again, though, so it’s best to strike while the iron is hot. In 2021 it will drop to 22% and continue to significantly decline each year.

While you should contact your accountant or tax expert to discuss your eligibility, we can offer a few general guidelines to consider. In order to gain the benefit of this tax credit, you would need to have some tax liability. For example, non-profits and schools would not be able to claim this tax incentive but could qualify for other incentives and programs to finance solar. Also, to receive this tax credit you must own the solar array. If you lease or have a power purchase agreement on the solar array you do not own the system and therefore will not receive the benefit. For more about the pros and cons of purchasing, leasing, and PPAs check out our recent blog post.

Net Metering

Net metering is available in all of New England except for Maine, which has its own compensatory program for solar energy. This requires a meter to be installed on the home or business with solar that flows in both directions, essentially allowing you to sell your unused solar electricity back to the grid.
With net metering, surplus energy can flow back to the grid and the home or business owner will be compensated for the energy they do not use. Then at night when the sun is not shining the meter can draw electricity from the grid and charge you for what you use. In many cases, this eliminates an electric bill altogether because the net metering credits and charges can balance out.

SMART Program

This year the SMART Program in Massachusetts is still currently available. This program is one of the best compensatory incentives for solar in the country. With this program, the home or business is compensated for every kWh of renewable energy their solar array produces. The amount per kWh will depend on the utility company and when the system is installed, but that rate is locked in for 10 years smaller systems, or 20 years for larger systems. SMART is a declining block program with limited funds, so the sooner you go solar the better chances you have of qualifying for this program and earning money for the clean energy you produce.

The solar array must be installed in Massachusetts to be eligible for this program. You must be a National Grid, Eversource, or Unitil customer in Massachusetts to qualify for this program. If you get your electricity from a municipality in Massachusetts there are many different incentives offered to their customers as well.

Municipal Light Plant Solar Rebate Program

If you are a resident of Massachusetts that uses a Municipal Light Plant instead of Eversource, National Grid, or Unitil, your municipality may have money set aside to help fund your solar project! This program will end in June of 2020 or when the available funds run out, whichever comes first. Money is set aside from both the DOER and local Massachusetts municipalities to help offset the cost of your solar array by up to 50%. This program is very limited and saves residents of Massachusetts thousands of dollars. If you qualify for this program, the first half of 2020 is the most affordable time to go solar.

Battery Storage Incentives

Massachusetts utilities National Grid and Eversource are offering annual incentive payments to customers that install solar and storage solutions in their home or business and allow the utility use of their stored energy at certain times. This program can earn someone around $1,000 a year to help offset the costs of the system. Check out the Mass Save website for more information and to see if you qualify for these incentives.

Renewable Income Offer

Massachusetts will offer 15%, up to $1,000, of the cost of a residential solar array against the resident’s Massachusetts taxes. New Hampshire has a similar program that offers $0.20 per watt on 10 kW or smaller solar projects up to $1,000. To qualify, the purchaser must be a Massachusetts or New Hampshire resident and it must be a residential solar installation to qualify for the offers in each state.

Solar Tax Exemptions

In Massachusetts and Rhode Island, solar arrays are exempt from both sales tax and property tax. In New Hampshire, there is a property tax exemption on the value that solar adds to a home or business. Vermont has a solar sales tax exemption and Connecticut has a ‘sales and uses’ exemption for solar.

Solar Loans

There are low-interest solar loan options available that are suited for a wide variety of solar projects. They allow people and businesses to outright own their arrays and reap the most benefits financially. Qualifications vary depending on the lender, but the MASS Solar Loan offered by DOER and MassCEC and UMassFive’s MySolar Loan offer unique benefits and are great for solar projects in Massachusetts. ACE Solar is a qualified installer for the Mass Solar Loan program.