What if you could reduce your electric bill, increase your home’s value, and claim thousands of dollars in tax credits — just by going solar in Massachusetts?
For homeowners across the Bay State — especially in Worcester and surrounding areas — 2025 is shaping up to be one of the most financially rewarding years to install solar panels. Between the 30% federal solar tax credit, Massachusetts’ state income tax credit of up to $1,000, and additional rebates and SMART program incentives, the savings opportunities are real — and they’re substantial.
But with all the policy updates, acronyms, and tax jargon floating around, it’s easy to get overwhelmed. That’s why this guide breaks it all down — clearly and practically.
As a homeowner, you’ll learn:
- What the Massachusetts solar tax credit actually is in 2025
- How it stacks with the Federal Solar Investment Tax Credit (ITC)
- What programs like SMART and Mass Save can add to your bottom line
- Exactly how to claim your credits, rebates, and maximize ROI
- Why now — not next year — is the smartest time to act
Whether you’re just starting to explore solar or already comparing installers, understanding these incentives could save you $8,000 to $15,000 or more — and drastically cut your monthly energy costs.
If you’re ready to see what your custom savings could look like, you can request a free quote here at any time.
Let’s get started with a quick overview of what Massachusetts offers solar homeowners in 2025.
Quick Overview – What Solar Incentives Are Available in Massachusetts?
If you’re a Massachusetts homeowner — whether in Worcester, Springfield, or suburban Boston — you have access to one of the most generous solar incentive stacks in the country.
Here’s what you could claim in 2025:
1. The Federal Solar Investment Tax Credit (ITC)
This nationwide program gives you a 30% tax credit on the total cost of your solar panel system. It applies to both equipment and installation costs. So, for a $25,000 system, that’s a potential $7,500 credit right off your federal taxes.
2. Massachusetts State Income Tax Credit
Known officially as the Massachusetts Residential Renewable Energy Income Tax Credit, this allows you to deduct 15% of your total system cost — up to $1,000 — from your state tax bill. It’s stackable with the federal ITC.
3. SMART Solar Program (Solar Massachusetts Renewable Target)
This is a performance-based incentive that pays you for every kilowatt-hour (kWh) of solar power your system produces. Bonus payments are available for battery storage and low-income households. We’ll cover this in detail later.
4. Mass Save Solar Rebates
Mass Save — a partnership of major utility providers like Eversource and National Grid — offers cash rebates and low-interest financing options for eligible solar and energy efficiency upgrades, including solar batteries and hot water systems.
5. Sales and Property Tax Exemptions
In Massachusetts, your solar system is exempt from sales tax, and it won’t increase your property taxes, even though it adds value to your home.
When combined, these programs can reduce your out-of-pocket solar costs by 35–50% or more — all while helping you lock in predictable, lower utility bills for decades.
Ready to find out exactly how much you could save based on your home and location?
Request your free solar quote here
Understanding the Federal Solar Tax Credit (ITC) in 2025
The Federal Solar Investment Tax Credit, often called the ITC, is the single most valuable incentive available to U.S. homeowners considering solar. And in 2025, it’s still going strong — but it won’t last forever.
What Is It?
The ITC allows you to deduct 30% of the total cost of your solar panel system — including installation — from your federal income taxes. This applies to residential homes across the U.S., including Massachusetts.
For example, if your solar system costs $22,000:
- Your federal tax credit = $6,600
- That’s a direct dollar-for-dollar reduction on what you owe the IRS
What Does It Cover?
The credit applies to:
- Solar panels and related equipment
- Labor costs (including permitting, wiring, and installation)
- Energy storage (like solar batteries) if installed with your system
- Sales tax paid on materials
How Long Will It Last?
Thanks to the Inflation Reduction Act, the ITC has been extended at 30% through 2032 — but that doesn’t mean you should wait.
Why?
- System prices are rising due to material costs
- Local program caps (like SMART) can expire or shift tiers
- The sooner you go solar, the faster your savings begin
👥 Who Qualifies?
- You must own the solar system (not lease)
- You must have federal tax liability (i.e., owe taxes)
- The system must be installed at your primary or secondary residence
The federal solar tax credit 2025 remains one of the most powerful financial tools to reduce your solar investment — but timing matters. We’ll show you how to stack this with Massachusetts credits next.
Massachusetts Residential Energy Credit – Save Up to $1,000
In addition to the generous 30% federal credit, Massachusetts homeowners can take advantage of a state-level solar tax incentive that puts even more money back in your pocket.
This is known as the Massachusetts Residential Renewable Energy Income Tax Credit, and it’s designed to reward homeowners who make energy-efficient upgrades — especially solar.
How Much Can You Save?
The credit lets you claim 15% of your total solar system cost, up to a maximum of $1,000, on your state income tax return.
Let’s say your system costs $20,000:
- 15% of that is $3,000
- You’ll get the full $1,000 credit on your Massachusetts taxes
And yes — you can claim this alongside the federal ITC, as long as you meet both sets of requirements.
Who Qualifies?
You’re eligible for the Massachusetts residential energy credit if:
- You own the solar system (not leased)
- It’s installed on your primary Massachusetts residence
- It produces electricity (photovoltaic systems)
- You’re a Massachusetts state income taxpayer
What Do You Need to File?
To claim this credit, you’ll include:
- Massachusetts Form 1, plus
- Schedule EC (Energy Credit), where you’ll calculate your eligible amount
If your credit exceeds your tax liability this year, you can roll over the unused amount for up to three years.
Together with the federal credit, this state benefit can dramatically reduce your upfront costs — and it’s one of the easiest solar incentives in the nation to claim.
Next, we’ll dive into the SMART program — Massachusetts’ unique pay-per-kWh solar incentive that rewards your system for years to come.
The SMART Program: Massachusetts Renewable Target Incentive
In most states, solar incentives stop at rebates and tax credits — but Massachusetts takes it a step further.
The SMART Program, short for Solar Massachusetts Renewable Target, is a state-sponsored, performance-based incentive that pays homeowners for the actual energy their solar system produces — every single month.
This makes it one of the most powerful ways to maximize your return on investment, and it’s available to homeowners across the state, including Worcester.
How Does the SMART Program Work?
Under SMART, you receive fixed monthly payments for every kilowatt-hour (kWh) your solar system generates over a 10-year term. These payments are issued through your local utility (such as Eversource, National Grid, or Unitil) and are in addition to your energy bill savings.
So you’re not just saving money — you’re getting paid to generate clean energy.
How Much Can You Earn?
Payouts vary depending on your utility provider, system size, and when you enroll (because of tiered capacity blocks).
Typical homeowners might earn:
- $6,000 to $9,000 over 10 years in SMART payments alone
- Even more if you install solar battery storage (bonus incentives apply)
What’s Behind the Program?
SMART is administered under 225 CMR 20.00, the regulation issued by the Massachusetts Department of Energy Resources (DOER). It was designed to ensure long-term solar growth and grid stability, while giving homeowners a tangible financial benefit for going green.
Can You Combine SMART With Other Incentives?
Yes — and you should. SMART is fully stackable with:
- The 30% Federal ITC
- The $1,000 MA Residential Energy Credit
- Mass Save rebates and battery incentives
If you live in Massachusetts and are considering solar, enrolling in SMART while it’s still open is a strategic move. It’s not just a discount — it’s a decade of extra cash in your pocket for doing what you were already planning to do.
In the next section, we’ll cover Massachusetts solar rebates — including how to claim them and what they cover.
Solar Rebates in Massachusetts – What You Might Qualify For
Beyond the tax credits and long-term SMART payments, Massachusetts homeowners can also take advantage of upfront cash rebates — especially when working with utility-backed programs like Mass Save.
These rebates further reduce your out-of-pocket costs and can apply to everything from solar panels to battery storage systems and solar hot water.
What Rebates Are Available?
The most well-known program is Mass Save, a statewide initiative funded by utility companies including Eversource, National Grid, and Unitil.
As of 2025, Mass Save offers:
- Up to $1,000 in rebates for solar battery installations
- Additional incentives for low-income households
- Rebates for solar thermal (hot water) systems
- Financing options like zero-interest HEAT loans for energy upgrades
These rebates are not automatic — they require pre-approval and documentation through Mass Save’s application portal.
Do Rebates Stack with Tax Credits?
Yes. Rebates are completely stackable with:
- The Federal ITC (30%)
- The Massachusetts Residential Energy Credit
- The SMART program incentives
This means homeowners can combine all four:
- Claim the federal credit
- Deduct up to $1,000 from state taxes
- Earn monthly payments through SMART
- Apply for cash rebates through Mass Save
Who Should Consider a Battery Rebate?
If you’re planning for:
- Energy backup during outages
- Time-of-use savings
- Grid resilience — then pairing a solar system with battery storage and claiming the Mass Save battery rebate makes strong financial sense.
Next, we’ll explain how net metering in Massachusetts helps you earn even more from the solar energy your home generates.
How Net Metering Helps You Save on Electric Bills
One of the biggest financial benefits of going solar in Massachusetts — and a key part of your long-term return — is net metering.
What Is Net Metering?
Net metering is a billing mechanism that allows you to earn credit for the excess solar electricity your system sends back to the grid.
When your panels produce more energy than your home uses (which often happens during sunny afternoons), the extra power is exported to your utility. In exchange, you’re credited on your next electric bill — essentially spinning your meter backwards.
Later, when your home uses more power than it generates (like at night), you draw from those credits instead of paying for new electricity.
Why It Matters in Massachusetts
Massachusetts has strong net metering policies, which makes solar more financially attractive than in many other states. The credits you earn are typically valued at the full retail rate, meaning dollar-for-dollar savings on your utility bill.
Net metering is available to most customers of:
- Eversource
- National Grid
- Unitil
This includes residents in Worcester and surrounding Central MA communities.
Bonus: Net metering works seamlessly with the SMART program, allowing you to save on energy bills and earn monthly performance payments at the same time.
Are There Any Limits?
Yes — net metering is subject to capacity caps and policy adjustments. That’s why it’s smart to act while availability remains stable. Once these caps are filled, compensation terms may shift for new enrollees.
Between net metering, tax credits, rebates, and SMART payments, Massachusetts homeowners have access to a uniquely robust financial ecosystem for solar.
Next, we’ll break down who qualifies for these incentives — and answer some of the most frequently asked questions.
Eligibility & Common Questions for 2025
You’ve read about the incentives — now the big question is: Do you qualify?
Below, we’ll walk through the most common eligibility questions we hear from Massachusetts homeowners — especially those in Worcester and surrounding areas.
Does Massachusetts have a solar tax credit in 2025?
Yes. The state offers a personal income tax credit of 15% of your solar system cost, up to $1,000, through the Massachusetts Residential Renewable Energy Income Tax Credit program.
Can I claim both the state and federal solar tax credits?
Absolutely. These are separate programs, and you can stack both:
- 30% off through the federal ITC
- Up to $1,000 from the state of Massachusetts
What if I lease my solar panels?
Unfortunately, leasing disqualifies you from most solar tax credits and SMART incentives.
To claim both state and federal solar incentives, you must own your solar system — either through cash or financing.
Do solar batteries qualify for tax credits in Massachusetts?
Yes, if installed at the same time as your solar system.
You can claim a portion of the cost under the federal ITC, and apply for Mass Save battery rebates as well.
How do I claim the Massachusetts solar tax credit?
You’ll need to:
- File Form 1 (MA personal income tax return)
- Include Schedule EC, where you calculate the credit amount
- Keep documentation of your solar system purchase and installation
If your credit exceeds your state tax liability, the unused portion can roll over for up to three years.
What if I go solar in late 2024? Can I still claim credits in 2025?
It depends on when your system is placed in service (i.e., officially connected and producing energy).
As long as that date falls within the 2025 tax year, your incentives should apply.
Got more questions? Our team is happy to walk you through the full process — from eligibility to claiming forms.
Not sure if you qualify? Let’s find out together →
Sample Cost Breakdown & Real Savings
Let’s bring all these credits, rebates, and payments into focus with a real-world example. If you’ve been wondering what solar might actually cost after incentives — and how much you can save — here’s how it adds up.
Example: A Typical 6.5 kW Solar System in Worcester
- System cost: $24,000
- Federal ITC (30%): –$7,200
- Massachusetts state tax credit (15% up to $1,000): –$1,000
- SMART program payments (over 10 years): –$7,000 (estimate)
- Mass Save rebate for battery storage (optional): –$1,000 to –$2,000
Estimated Total Benefit: $16,200 to $17,200
Final Effective Cost: ~$7,000 to $8,000
That’s less than one-third of the system’s original price.
Even better? You’ll start saving $1,200 to $1,800 per year on your electric bills — and lock in those savings for decades.
That means your system could pay for itself in just 4–6 years, with years of net savings after that.
This is why the ROI of solar in Massachusetts is consistently among the highest in the country. Between generous policies, utility support, and high electricity costs, homeowners here enjoy both short- and long-term financial benefits.
Want to see your custom solar savings? Get your free quote in 60 seconds →
How to Claim Your Tax Credits and Rebates
Claiming solar incentives might sound like a paperwork headache — but it’s actually a straightforward process, especially if you know what to prepare in advance.
Here’s exactly how to claim your federal and state solar tax credits, along with Mass Save rebates.
Step 1: Complete the solar installation process with a certified installer
You’ll need:
- A signed contract
- Verified installation documents
- Proof that the system is “placed in service” (connected and producing power) during the tax year
Step 2: Claim the Federal Solar Tax Credit (ITC)
On your federal tax return:
- Complete IRS Form 5695 (Residential Energy Credits)
- Transfer the credit amount to Schedule 3 (Form 1040)
- Include system cost, eligible labor, equipment, and battery costs
Tip: If your tax liability is smaller than your credit, the unused portion rolls over to the next year.
Step 3: Claim the Massachusetts State Energy Credit
On your MA state tax return:
- File Massachusetts Form 1
- Include Schedule EC (Energy Credit)
- Enter 15% of your system cost (capped at $1,000)
- Attach system documentation
This credit is non-refundable, but you can carry forward any unused amount for up to three years.
Step 4: Apply for Mass Save Rebates (If Eligible)
If you’ve installed battery storage or solar thermal hot water, you may qualify for Mass Save rebates:
- Visit www.masssave.com
- Select your program (battery/solar hot water)
- Submit documentation, utility account details, and installer verification
Rebates are issued by check or utility credit, depending on the program.
Step 5: Enroll in the SMART Program (If Applicable)
Your solar installer typically handles this, but be sure to confirm:
- Your system is eligible
- You’re enrolled in the correct utility block
- Battery add-ons are properly submitted for bonus incentives
Handling this process through a qualified installer (like the installers we work with) ensures everything is filed on time and correctly — helping you unlock every dollar you’re entitled to.
In the next section, we’ll zoom in on Worcester and explain why it’s one of the best cities in the state to go solar.
Solar Incentives in Worcester, MA
If you live in Worcester, Massachusetts — or anywhere in Central MA — you’re in a prime position to take full advantage of the state’s most powerful solar programs.
Why Worcester Is a Great Place to Go Solar
- Electricity costs in Worcester are among the highest in the region, making bill reduction even more valuable.
- The area is serviced by major utilities like National Grid and Eversource, both of which participate in:
- Net metering
- Mass Save rebates
- The SMART Program
- Worcester homes typically have sufficient roof space and unobstructed sun exposure — making solar installations efficient and cost-effective.
Access to the Full Incentive Stack
Worcester homeowners are eligible for every single incentive we’ve covered in this guide:
- 30% Federal Solar Tax Credit
- 15% MA State Tax Credit (up to $1,000)
- Mass Save solar battery rebates
- SMART program monthly payments
- Net metering benefits at retail value
Whether you live in Greendale, Burncoat, Main South, or the West Side — these savings are available to you.
Many homeowners in Worcester are already switching to solar. The sooner you act, the sooner you lock in your tax credits and start earning real energy savings.
Live in Worcester? Start your solar savings journey today →
Final Thoughts – There’s Never Been a Better Time to Go Solar
Massachusetts has long been one of the most solar-friendly states in the U.S., but 2025 is uniquely positioned to offer the highest savings in years.
With:
- A 30% federal tax credit still in place
- A $1,000 state income tax credit
- The SMART Program paying you for the power you generate
- Mass Save rebates reducing costs on batteries and hot water systems
- And strong net metering policies still active…
…there’s never been a better time to take control of your energy costs and make a smart long-term investment in your home.
Whether you’re in Worcester or elsewhere in the Bay State, solar isn’t just a smart decision — it’s a financial opportunity with benefits that will last for decades.
Want to see exactly how much you can save with solar?
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