Finance your solar project with the following incentives and tax credits.
If you want to switch your business to clean, renewable energy, you should take advantage of these solar power incentive programs. These solar incentive programs help you finance your solar project by giving you monetary reasons to invest in solar electricity for your facility, property, and community. If you choose the right incentive or tax credit program for your project, you’ll greatly increase its chances of success. Here are the Massachusetts energy credits, rebates, and tax incentives for solar projects.
The Solar Massachusetts Renewable Target (SMART) Program is the newest of Massachusetts’ solar energy incentives. It’s a tariff-based incentive a utility company pays directly to the solar system owner. If you apply for this solar program, your project must be connected to one of these three Massachusetts investor-owned utility companies: Eversource, National Grid, and Unitil. When you apply, your project will be placed into one of two Capacity Blocks: Less Than or Equal to 25 kW AC or Greater Than 25 kW AC. You also need to review all the guidelines and requirements for the SMART solar incentive program. If your application is selected, you can offset your financial investment with the funds you receive from your connected utility company.
This Massachusetts solar rebate program is a good fit for businesses with small solar projects. To qualify for this program, your project must have a capacity of 25 kW or less, no more than a 20% output reduction due to shading, and it must be interconnected to a participating MLP distribution system. After you apply for this program, the Massachusetts Department of Energy Resources (DOER) and the participating MLPs offer rebates of $1.20 per watt for up to 50% of your system costs. The MLP Program Manual and its FAQ walks you through the entire process.
Eversource, National Grid, and Unitil customers may use net metering to return their solar panels’ excess electricity back to the grid. When you participate in net metering, your solar is fitted with a meter that tracks how much electricity your building uses. The meter spins forward when your building uses your utility company’s electricity and spins backward when it uses the solar electricity your array generates.
How does net metering affect your monthly electric bill? You pay for your net electricity consumption, which subtracts the electricity you generate from the electricity you consume. If that net metering difference is positive, you’ll pay your utility company for it, but if it’s negative, the utility company will put a net metering credit on your electric bill, where it appears as a dollar amount. These state solar energy credits roll over to the next billing period and never expire.
Interestingly, Massachusetts doesn’t differentiate between behind-the-meter net metering and virtual net metering. Behind-the-meter net metering measures electricity consumed on the same site where it’s generated. Virtual net metering measures electricity consumed on a site other than the place where the electricity was generated. No matter which type of net metering you participate in, you’re eligible for solar credits in Massachusetts.
Net metering helps you save money on your electric bill and allows you to contribute to your community when it returns your excess electricity to the grid.
Reach out to us today to find out which incentives and tax credits your solar project qualifies for.
Business Energy Investment Tax Credit (ITC)
The federal Investment Tax Credit is currently at 22% for 2021. If you purchase your solar energy system outright during 2021, you’ll be eligible to have that 22% incentive deducted from your federal income taxes. In 2022 and all following years, it will be at 10%. This incentive option can make it more feasible and appealing to purchase your solar array outright, as other purchasing options aren’t eligible for this solar investment tax credit. If you take advantage of the federal solar tax credit’s current rate, you’ll save more money than you will if you wait to purchase your solar system in a later year.
MACRS is a national incentive that allows businesses to recover their renewable energy project investments through depreciation deductions. This system sets up different class lives and schedules for renewable energy project depreciation. Most solar energy systems fall into the five-year schedule. If your system was acquired and installed between Sept. 27, 2017, and Jan. 1, 2023, you can receive a bonus depreciation of 100% because of The Tax Cuts and Jobs Act of 2017. This system can help make your project more feasible by helping you recover the costs of your investment over time.
Verogy’s experienced solar experts use their resources to procure solar project financing for our clients. We show you which solar incentives and tax credits will best fit your project, and then we help you access them. Request a proposal from us today to find out how we’ll tackle your commercial solar project.