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Massachusetts Solar Incentives, Tax Credits and Rebates (2026)

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Massachusetts has built one of the strongest state-level solar incentive stacks in the country, anchored by the SMART program — a performance-based, 20-year payment vehicle administered by the Department of Energy Resources alongside the state’s three investor-owned utilities (Eversource, National Grid, and Unitil). When the federal residential credit expired at the end of 2025, the Massachusetts market absorbed the change more easily than most because the state stack was already doing the heavy lifting on project economics. SMART payments stack on top of net metering credits, the state offers a 15 percent residential income tax credit, and a long-standing sales and property tax exemption keeps installed cost down. Massachusetts also hosts an aging cohort of SREC-era residential and small commercial systems installed during the 2010–2015 build-out — many of those arrays are now approaching end of life and will need decommissioning, repowering, or removal in the next several years. For commercial property owners inside Boston, the city’s BERDO 2.0 ordinance has become a meaningful compliance driver: declining emissions caps with financial penalties have pushed on-site solar back to the top of the capital planning list for buildings 20,000 square feet and larger.

Installed capacity
4,800 MW
National rank
#9
RPS target
40% by 2030

State incentive programs

ProgramTypeForValueSource
SMART Program (Solar Massachusetts Renewable Target)
New equipment only. Executed interconnection service agreement required. Systems ≤25 kW AC and behind-the-meter commercial <250 kW are cap-exempt. Max project size 5 MW AC.
Massachusetts DOER / Eversource, National Grid, Unitil
Program Year 2026: 600 MW AC available statewide. All three utility territories open as of June 2026. SMART payments stack on top of net metering credits.
PBIBoth
Residential ≤25 kW: $0.03/kWh (low-income $0.06/kWh). Commercial >25–250 kW: $0.2807/kWh; >250–500 kW: $0.2430/kWh; >500–1,000 kW: $0.2317/kWh; >1,000–5,000 kW: $0.1790/kWh. 20-yea…
Source
Net Metering
Residential ≤25 kW AC auto-exempt from capacity caps. Class I (≤60 kW), Class II (60 kW–1 MW), Class III (1–2 MW). Virtual net metering available for Class II and III within same utility territory and ISO-NE load zone.
Eversource, National Grid, Unitil (DPU oversight)
Several sub-zones near capacity for non-exempt projects. Check MassACA portal before scoping non-exempt commercial projects.
OtherBoth
Approximately 90–100% of full retail rate. Credits roll forward indefinitely. Annual true-up surplus paid at $0.03–$0.05/kWh wholesale rate.
Source
Sales Tax Exemption
Residential and commercial solar installations. Applies to panels, inverters, racking, and auxiliary storage equipment.
Massachusetts Department of Revenue
Statute: MGL c. 64H, §6(dd).
ExemptionBoth
100% exemption from Massachusetts 6.25% sales tax on solar equipment and components.
Source
Property Tax Exemption
Systems sized for on-site energy needs (residential and commercial). Large merchant facilities selling wholesale may require a PILOT agreement with the municipality.
Local assessors / Massachusetts DOR
Statute: MGL c. 59, §5, Clause 45. No sub-anchor available — link goes to full Section 5.
ExemptionBoth
100% exemption from real estate property tax on added value attributable to solar array or co-located battery storage. Duration: 20 years from commissioning.
Source
ConnectedSolutions Battery Program
Solar-paired battery storage systems. Owner authorizes utility dispatch during summer peak events (June–September, 3–8 PM weekdays). Performance-based — paid per average kW contributed.
Eversource and National Grid (via MassSave)
Unitil territory customers are not eligible. Clean Peak Energy Certificates (CPECs) generated during dispatch events accrue to utility sponsors.
RebateBoth
Eversource: $275/kW summer, $50/kW winter. National Grid: $225/kW summer, $50/kW winter. Unitil: not participating.
Source
MassSave HEAT Loan
Battery storage systems formally enrolled in ConnectedSolutions.
MassSave participating utilities
LoanBoth
0% interest loan up to $25,000, terms up to 7 years.
Source
Massachusetts Residential Energy Credit
Principal residence in Massachusetts. Solar PV or wind equipment.
Massachusetts Department of Revenue
Statute: MGL c. 62, §6(d).
Tax creditResidential
15% of net qualified expenditure, capped at $1,000 per principal residence. Non-refundable with 3-year carryforward.
Source

Net metering

Massachusetts offers net metering at approximately 90–100% of full retail rate, with indefinite credit rollover and an annual true-up at wholesale rate for surplus. Residential systems ≤25 kW AC are auto-exempt from capacity caps; commercial projects are tiered into Class I, II, and III with virtual net metering available within the same utility territory and ISO-NE load zone.

Massachusetts net metering reference

Federal tax credit status

Recent development

Court ruling restores 5% Safe Harbor — June 6, 2026

A federal district court vacated IRS Notice 2025-42 on June 6, 2026, restoring the 5% Safe Harbor as a valid pathway for commercial solar projects to establish a construction start before the July 4, 2026 deadline. Projects relying on this ruling face appellate risk — consult tax counsel before relying solely on the 5% Safe Harbor. (Oregon Environmental Council v. IRS, Civil Action No. 2025-4400, U.S. District Court for the District of Columbia.)

Source

Federal commercial solar ITC — construction must begin by July 4, 2026

Section 48E requires construction to begin by July 4, 2026 for projects to maintain full eligibility. Projects that miss this date must be fully placed in service by December 31, 2027 to qualify for any credit. For most commercial installations, that 18-month window is not realistic. Commercial customers currently scoping a solar project should treat this as the primary financial deadline in the deal.

Federal programs

Section 48E — Clean Electricity Investment Tax Credit (Commercial ITC)

Commercial
Value
Base rate: 6%. Full rate: 30% with Prevailing Wage and Apprenticeship (PWA) compliance, or for projects under 1 MW AC output. Domestic content bonus: +10% (to 40%) with PWA. Energy community bonus: +10% with PWA. Low-income community allocation: +10% or +20% depending on category. Maximum combined credit: up to 70% for fully qualified projects.
Eligibility
Construction must begin by July 4, 2026 OR project must be placed in service by December 31, 2027. Projects missing both deadlines receive 0% credit. FEOC rules apply: projects beginning construction in 2026 are ineligible if more than 40% of total direct manufactured product costs come from Prohibited Foreign Entities (China, Russia, Iran, North Korea). Threshold escalates: 45% in 2027, 50% in 2028.
Deadline
July 4, 2026 (construction start) or December 31, 2027 (placed in service)
Notes
Direct Pay (Section 6417) allows tax-exempt entities, nonprofits, tribal governments, and municipalities to receive the credit as a direct cash refund. Transferability (Section 6418) allows for-profit developers to sell credits to third parties for cash. Statute: OBBBA P.L. 119-21.
IRS / U.S. TreasurySource

Section 48E — Energy Storage (Standalone Battery)

Both
Value
Base rate: 6%. Full rate: 30% with PWA compliance. Domestic content and energy community adders available. Standalone storage is expressly excepted from the solar/wind December 31, 2027 cliff. Full credit rate available through applicable year 2032. Phasedown begins 2033.
Eligibility
Standalone battery storage or solar-paired storage. NOT subject to the July 4, 2026 construction start deadline or the December 31, 2027 placed-in-service cliff. FEOC rules apply with a more favorable threshold: 55% PFE-cost ceiling for projects beginning construction in 2026.
Notes
Statutory basis: OBBBA Section 70513(a)(C) expressly excepts energy storage technology from the wind/solar termination rule. Full credit through applicable year 2032 per Section 70512.
IRS / U.S. TreasurySource

Section 45Y — Clean Electricity Production Tax Credit (PTC)

Commercial
Value
Per-kWh credit over a 10-year production period from placed-in-service date. Base rate approximately 0.55 cents/kWh; approximately 2.75 cents/kWh with full PWA compliance. Exact 2026 inflation-adjusted rate pending IRS publication.
Eligibility
Same construction start and placed-in-service deadlines as Section 48E. Same FEOC rules apply. Generally superior to ITC for utility-scale projects with high capacity factors where 10 years of cumulative production exceeds 30% of upfront cost.
Deadline
July 4, 2026 (construction start) or December 31, 2027 (placed in service)
IRS / U.S. TreasurySource

Section 25D — Residential Clean Energy Credit

Residential
Value
Terminated. No credit available for systems installed after December 31, 2025.
Eligibility
Homeowners who installed on or before December 31, 2025 may carry forward unused credits. New purchases in 2026 do not qualify. Third-party owned systems (leases and PPAs) remain eligible via the system owner's Section 48E commercial ITC claim.
Notes
Terminated by OBBBA (P.L. 119-21, signed July 4, 2025) for expenditures after December 31, 2025. Statute: IRC Section 25D.
IRSSource

MACRS Bonus Depreciation

Commercial
Value
100% bonus depreciation permanently restored for qualifying business property placed in service on or after January 19, 2025. Solar energy property reclassified from 5-year to 20-year MACRS (OBBBA Section 70509), but 100% bonus depreciation makes the class life irrelevant for most projects — full basis expensed in Year 1. ITC basis reduction: depreciable basis reduced by 50% of the claimed ITC percentage.
Eligibility
Commercial solar projects. The 20-year MACRS reclassification applies to property where construction begins after December 31, 2024. Class life matters only for taxpayers who opt out of bonus depreciation or use specific tax equity structures.
Notes
Statutory basis: OBBBA Section 70301 (bonus depreciation) and Section 70509 (MACRS reclassification). Confirmed on Congress.gov primary source.
IRSSource

Direct Pay — Section 6417

Both
Value
Tax-exempt entities receive the full ITC or PTC value as a direct cash refund from the IRS instead of a tax credit offset.
Eligibility
Tax-exempt 501(c) organizations, educational and religious institutions, tribal governments, Alaska Native Corporations, municipal and local governments, public school districts, and rural electric cooperatives. Subject to the same solar construction start and placed-in-service deadlines as Section 48E.
Notes
Preserved by OBBBA. Confirmed on IRS.gov.
IRSSource

Transferability — Section 6418

Commercial
Value
For-profit developers can sell ITC or PTC credits to unrelated third-party taxpayers for cash. Transaction is non-taxable to the seller.
Eligibility
For-profit commercial solar developers. Credits cannot be resold by the purchasing entity. OBBBA extended the audit statute of limitations to 6 years and added penalties for FEOC certification errors.
Notes
Preserved by OBBBA. Confirmed on IRS.gov.
IRSSource

Last reviewed:

Disclaimer

This page is for informational purposes only and does not constitute legal or tax advice. Federal incentive programs, credit rates, and eligibility rules changed significantly in 2025 and may change further. The court ruling on IRS Notice 2025-42 is subject to appeal. Verify current program status with a qualified tax attorney or solar finance professional before making investment decisions.

For rules on repowering and system replacement, see our federal incentives guide.

Boston commercial properties — BERDO 2.0

Boston buildings 20,000 square feet and larger face BERDO 2.0's declining emissions caps, with financial penalties for non-compliance escalating through the rest of the decade. On-site solar is one of the more direct compliance paths for buildings carrying high electrical loads, and SMART payments stack with the emissions-reduction value for owners pursuing both.

City of Boston BERDO 2.0

Disclaimer

This page is for informational purposes only and does not constitute legal or tax advice. Incentive programs, rates, and eligibility rules change frequently. Verify current program status directly with the Massachusetts DOER, your utility, or a qualified solar professional before making any financial decisions.

Sources

Planning a solar removal or decommissioning project in Massachusetts?

Blue Flag Solar handles removal, certified recycling, and chain-of-custody documentation for residential and commercial projects.

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