Going Solar in 2021

13 Jan Going Solar in 2021

So, 2020 was an interesting year, to say the least, but despite the challenges of a year drastically disrupted by the COVID-19 pandemic, the solar industry continued its rapid growth. With a few incentive extensions, coupled with the addition of new solar programs, 2021 looks like it will be another great year for solar energy in New England and beyond. Read on to learn more about what going solar in 2021 looks like in your state.

Federal ITC Solar Tax Credit

The Federal ITC Solar Tax Credit, which was slated to decrease from 26% to 22% in 2021, was recently extended for another two years. This means that new solar installations will be eligible for a 26% credit on the cost of the project, as long as it is installed by the end of 2022. The incentive helps reduce the overall cost of the system, shortens the time it takes to see a full return on your investment, and saves system owners thousands of dollars.

While it is always best to consult with your accountant or tax professional about your eligibility, there are a couple guidelines that will give you a general idea of whether or not you are eligible. For starters, you must have some amount of tax liability. This rules out nonprofits and schools, who rely on other programs to subsidize the cost of solar. You must also own the panels to receive this tax credit. If you lease or have a power purchase agreement on your installation, you will not be able to take advantage of this incentive. Read more about the pros and cons of purchasing a system vs a lease or PPA set up on our blog.

Net Metering

Net Metering is another great way to save while looking to go green. Available in all New England states, net metering lets you sell unused energy from your solar panels back to your utility company by installing an energy meter that allows electricity to flow both ways.

When the electricity flows from the home or business owner onto the grid, the utility company will compensate you for this unused energy in the form of bill credits. You can then use these credits to pay your bill when you are required to purchase energy from the grid (think at night when your solar panels are not producing anything). In all New England states except for Maine, these bill credits will be in dollars. In Maine, you can choose whether you want to be compensated in dollar credits or kWh credits. Oftentimes, net metering eliminates an electric bill altogether as the credits balance out your payments.

Property and Sales Tax Exemptions

In New England, solar arrays also come with a variety of tax exemptions. The most notable is that there is no property tax increase caused by the addition of solar to your home in any New England state. In Massachusetts, Rhode Island and Vermont, solar equipment is also exempt from any sales tax that would usually apply.

Battery Incentives

As battery prices continue to drop, they are becoming more and more popular among solar installations. Utility companies are now realizing the potential of solar batteries to reduce stress on the grid through the ConnectedSolutions program in both Massachusetts and Rhode Island. Through this incentive program, your utility company would pay you in exchange for access to your stored energy during certain days and times. On average, this program could put a couple thousand dollars in your pocket every year!

State-Specific Incentives

In addition to these common solar policies that all New Englanders can benefit from, there are also some really great state specific incentives available. Check below to see if your state is on the list!

Solar Incentives for Massachusetts Residents

Massachusetts is known for being one of the best states in the country when it comes to going solar. In addition to the incentives above, residents of Massachusetts are eligible for a few other programs.

Massachusetts SMART Program: Through the SMART program, the home or business owner is compensated by the state for every kWh that the solar array produces. The exact amount that you are paid per kWh varies depending on the utility company, but the compensation rate is generally higher than the retail rate and is locked in for 10 years for residential systems and 20 years for commercial systems. SMART is a declining block system, meaning the sooner you go solar, the more you save! To be eligible, you must be an Eversource, National Grid or Unitil customer.

Municipal Light Plant Solar Rebate Program: If you are a resident of Massachusetts that uses a Municipal Light Plant rather than Eversource, National Grid or Unitil, your municipality may have set aside money to help fund your solar project! This program was recently extended until June 2021, so make sure to take advantage of this offer before it is gone. Money is set aside by the DOER and local municipalities to help fund $1.20 per watt up to 50% of the project costs, helping to save you thousands.

Renewable Income Offer: Massachusetts also offers a state tax rebate for 15% of your project costs or $1,000 against your MA state tax for residential installations only.

Solar Incentives for Rhode Island Residents

Rhode Island also offers some seriously awesome solar incentives for residents of the Ocean State.

Renewable Energy Fund: The renewable energy fund offers grants for new solar projects throughout the state and helps you begin saving money right away. These grants are worth $0.85 per watt up to $7,000. This is a great way to realize your return on investing in solar years earlier than normal.

Renewable Energy Growth Program: The Renewable Energy Growth Program makes sure that Rhode Island residents are compensated for all their solar production. Through National Grid, the solar owner will be paid up to $0.29 per kWh for the first 15 years of the system’s lifespan. This pay off far exceeds the regular retail rate for solar.

Solar Incentives for New Hampshire Residents

Residential Renewable Electrical Generation Rebate Program: Through this New Hampshire state rebate program, residents will receive a rebate on their state taxes of $0.20 per watt or 50% of the system cost up to $1,000. To qualify, your project must be residential and it must be less than 10 kW in size.

Solar Incentives for Maine Residents

PACE Loans: The Property-Assessed Clean Energy (PACE) Loan offers a no money down borrowing option that you repay with an annual assessment on your property taxes. These loans are available in 15-year terms with 4.99% interest rates and a $15,000 borrowing cap.

If you want to get the ball rolling in 2021, reach out to us for a free estimate for solar on your home. Click the banner at the top of the home page, or click here to complete our request form.