Massachusetts Solar Incentives 2026: SMART Program & Tax Breaks

Massachusetts is one of the most rewarding states in the country for solar — not because of abundant sunshine (Boston averages just 4.0 peak sun hours per day), but because the state's incentive stack is among the most generous in the U.S. on a per-watt basis. The Solar Massachusetts Renewable Target (SMART) program pays you for every kilowatt-hour your system produces for 10 years, layered on top of the federal 30% Investment Tax Credit, a 25% state income tax credit, full property tax exemption, and full sales tax exemption.

A typical 9 kW system in the greater Boston area can net out below $8,000 after all incentives — with a payback period of 6–9 years and a 25-year lifetime savings of $40,000–$55,000. Here's exactly how each program works.

Federal Investment Tax Credit (30% ITC)

The foundation of any Massachusetts solar project is the federal 30% Residential Clean Energy Credit (IRS Form 5695). This credit reduces your federal income tax liability dollar-for-dollar.

How it works:

Credit = 30% × total system cost (panels, inverter, racking, wiring, battery storage, installation labor)
It's a dollar-for-dollar tax credit, not a deduction — every $1 of credit eliminates $1 of tax owed
Unused credit carries forward indefinitely until fully used
Applies to systems installed and placed in service through December 31, 2032; steps down to 26% in 2033 and 22% in 2034

Massachusetts examples (2026 installed costs):

System size	Gross cost	30% ITC	Cost after ITC
6 kW	$21,000	$6,300	$14,700
9 kW	$29,700	$8,910	$20,790
12 kW	$38,400	$11,520	$26,880

Massachusetts installers average $3.30–$3.50/watt installed in 2026 (slightly above national average due to labor costs and permitting complexity in older housing stock).

Massachusetts State Income Tax Credit (15%, Up to $1,000)

Massachusetts offers a state Residential Renewable Energy Income Tax Credit (M.G.L. c. 62, § 6(d)). The credit is 15% of the net system cost (after any grants or utility rebates but before the ITC), capped at $1,000.

Key details:

15% of qualifying cost, maximum credit = $1,000
Applies to solar PV, solar water heating, and certain wind systems
Filed on Massachusetts Schedule CMS
Unused credit can be carried forward 1 year

At the $1,000 cap, the credit maxes out at $6,667 of system cost — essentially free money for every homeowner who installs solar. It's modest compared to the SMART program (see below), but it stacks with everything else.

SMART Program: Performance-Based Incentive (The Crown Jewel)

The Solar Massachusetts Renewable Target (SMART) program is the most distinctive and valuable incentive in the state. Unlike a one-time rebate or tax credit, SMART pays you a fixed rate per kilowatt-hour your system generates for 10 full years — whether you use that electricity or not.

How SMART works

SMART is administered by the Massachusetts Department of Public Utilities and run through the state's investor-owned utilities: Eversource (formerly NSTAR and Western Massachusetts Electric), National Grid, and Unitil. The program does not apply to Cape Light Compact (which has its own net metering program).

Rate: A fixed "Compensation Rate" set when your system is allocated to a capacity block, locked in for 10 years
Current rates (2026): Approximately $0.15–$0.22/kWh for residential systems ≤25 kW (varies by utility territory and block)
Payment: Monthly, billed through your utility as a separate line item or check
Cap: $0.35/kWh limit in early blocks; rates step down as each capacity block fills

SMART rate adders

The base rate increases with certain system characteristics:

Adder type	Rate increase
Battery storage co-located	+$0.05/kWh
Low-income household	+$0.03–$0.05/kWh
Agricultural land	+$0.06/kWh
Canopy (carport)	+$0.06/kWh
Brownfield/landfill	+$0.04/kWh

For a typical residential roof install with battery storage, the effective SMART rate can reach $0.20–$0.27/kWh.

How SMART interacts with net metering

SMART replaces the traditional net metering export credit for systems enrolled in the program. Under SMART:

You receive the SMART compensation rate for every kWh generated (measured by your production meter)
You pay retail rate for every kWh you consume from the grid
You receive a modest net metering credit for electricity you export — typically the "wholesale avoided cost" rate (around $0.04–$0.06/kWh export) rather than full retail

Net effect: For most homeowners, the 10-year SMART payment stream is worth more than retail net metering would have been, especially when combined with the battery storage adder.

SMART payment estimate

A 9 kW rooftop system in eastern Massachusetts generates approximately 10,800 kWh/year (4.0 peak sun hours × 9 kW × 75% derate factor × 12 months ÷ 12 = ~900 kWh/month).

At a $0.17/kWh SMART rate:

Annual SMART payment: 10,800 kWh × $0.17 = $1,836/year
10-year total: $18,360

That's $18,360 in direct cash payments — over and above your electric bill savings.

How to enroll in SMART

Hire a SMART-registered installer (they handle the application)
Installer submits a SMART Reservation Application through your utility
System is allocated to a capacity block (first-come, first-served)
Once installed and interconnected, SMART payments begin automatically

Important: Block allocation happens at application, not at installation. Apply as early as possible — earlier blocks have higher rates.

Property Tax Exemption

Massachusetts General Laws Chapter 59, Section 5, Clause 45 exempts the full added value of a solar energy system from local property taxes for 20 years.

What this means in practice:

Massachusetts has some of the highest property tax rates in the Northeast — statewide average is about 1.1% of assessed value, but varies widely (Boston ~0.6%, Newton ~1.1%, Worcester ~1.7%, Springfield ~2.0%).

A 9 kW solar system adds approximately $18,000–$22,000 to a home's assessed value in Massachusetts. At an average 1.1% tax rate, the exemption saves:

$198–$242/year in annual property tax savings
$3,960–$4,840 over the 20-year exemption window

Higher-rate communities (Worcester, Springfield) save proportionally more. The exemption applies automatically — no filing required beyond your standard property assessment process.

Sales Tax Exemption

Massachusetts exempts solar energy systems from the 6.25% state sales tax (M.G.L. c. 64H, § 6(dd)). The exemption covers:

Solar panels
Inverters
Racking and mounting hardware
Battery storage systems installed with solar
Wiring and electrical components

On a $29,700 system, the 6.25% sales tax exemption saves $1,856. This is automatic — simply inform your installer that you're claiming the exemption; they should not charge sales tax on qualifying solar components.

Net Metering in Massachusetts

For systems not enrolled in SMART (or for systems exceeding SMART program caps), Massachusetts offers retail-rate net metering.

Key rules (2026):

Applies to systems ≤10 kW in residential Class I net metering
Bill credit at full retail rate for excess generation exported to the grid
Annual true-up in February; unused credits carry forward indefinitely within the annual period
Alternative: Virtual Net Metering (VNM) for larger systems — allows credits to be shared with off-site accounts

SMART vs. net metering trade-off:

	SMART	Net Metering
Rate for production	$0.15–$0.22/kWh (10 yrs)	N/A
Rate for export	~$0.04–$0.06/kWh	~$0.22–$0.28/kWh (retail)
Rate for consumption	Pay retail ($0.22–$0.28/kWh)	Pay retail
Best for	High-production systems	Self-consuming most generation

Most residential systems ≤25 kW in Massachusetts should enroll in SMART — the 10-year guaranteed income stream nearly always beats retail export credits.

Cape Light Compact (Cape Cod and Martha's Vineyard)

Cape Light Compact is a municipal aggregation serving Cape Cod and Martha's Vineyard customers — it operates separately from Eversource, National Grid, and Unitil. Key differences:

Cape Light Compact does not participate in SMART — CLC customers use traditional net metering instead
Net metering rate: Full retail (~$0.24–$0.30/kWh depending on electricity plan)
Cape Light Compact offers a Residential Energy Efficiency rebate for heat pumps and efficiency upgrades that pair well with solar
Very good sun exposure (4.2–4.4 peak sun hours/day on the Cape vs. 4.0 for Boston)

For Cape residents, the absence of SMART is partially offset by better sun and the option to choose a higher-value electricity supply rate through CLC aggregation.

Low-Income Solar Programs in Massachusetts

CORE Solar Program

The CORE (Concentrated Opportunity for Renewable Energy) Solar Program provides free or deeply subsidized solar installations to income-qualified homeowners (≤80% AMI). Funded through Massachusetts utilities and administered by community action agencies.

Benefit: Free solar PV system installation (homeowner owns the system)
Income limit: ≤80% of Area Median Income (varies by county; approximately ≤$72,000 for a 3-person Boston household)
How to apply: Contact your regional Community Action Agency or call Mass211

LEAN (Low Income Energy Affordability Network)

LEAN administers fuel assistance and energy efficiency for low-income households. While LEAN primarily handles weatherization, it can connect eligible households with CORE Solar and utility low-income programs.

SMART Low-Income Adder

SMART participants who are income-qualified receive an additional $0.03–$0.05/kWh adder on top of the base SMART rate. This adder significantly improves payback for lower-income households.

Mass Save Financing

Mass Save offers 0% interest HEAT Loans up to $25,000 for residential energy improvements. While the primary focus is weatherization and heat pumps, some loan proceeds can fund solar-ready electrical upgrades (panel upgrades, EV charger wiring) that reduce the total solar project cost.

Massachusetts Solar Cost and Savings: Full Example

Scenario: Worcester, MA homeowner, 9 kW system

Item	Amount
Gross installed cost	$31,500
Federal 30% ITC	−$9,450
MA state income tax credit	−$1,000
SMART payments (10 yrs @ $0.17/kWh, 10,800 kWh/yr)	−$18,360
Annual electric bill savings (10,800 kWh × $0.25/kWh)	−$27,000 (yrs 11–25)
Property tax exemption value (1.7% rate, 20 yrs)	−$5,100+
Sales tax savings	−$1,969
Effective net cost (after all incentives excl. bill savings)	~$1,621

After 10 years of SMART payments alone, the homeowner has recovered almost the entire out-of-pocket cost. The remaining 15+ years of electricity savings (at Massachusetts' high electricity rates — average $0.27/kWh in 2026, among the highest in the continental U.S.) is essentially profit.

Payback period: 6–8 years depending on current SMART block rate and electricity price trajectory.

25-year lifetime savings: $50,000–$70,000 in combined electricity savings and SMART income.

How Massachusetts Compares to Other States

State	Unique state program	State income tax credit	Property tax exempt	Sales tax exempt	Avg. payback
Massachusetts	SMART (10-yr PBI)	15%, max $1,000	Yes (20 yrs)	Yes	6–9 yrs
New York	NY-Sun Megawatt Block + 25% state credit	25%, max $5,000	Yes	Yes	6–8 yrs
New Jersey	SREC II (15-yr REC income)	None	Yes	Yes	4–5 yrs
California	NEM 3.0	None	Yes	Yes	8–12 yrs
Texas	City utility rebates only	None	Yes	Yes	10–14 yrs

Massachusetts ranks among the top three states nationally for solar economics despite being far from the sunniest. The combination of SMART + 25% ITC + high retail electricity rates ($0.27/kWh) creates an unusually strong ROI.

How to Get Started

Verify installer is SMART-registered: Only installers authorized by your utility can submit SMART applications. Ask for proof of registration.
Get 3+ quotes: Solar installation costs in Massachusetts vary — $3.10–$3.80/watt is the 2026 range; anything above $4.00/watt warrants scrutiny.
Ask about current SMART block status: Rates decline as blocks fill. Your installer should know the current block for your utility territory and how much capacity remains.
Check battery storage adder: If you're considering a home battery, enrolling with battery storage boosts your SMART rate by $0.05/kWh — worth $5,400 extra over 10 years on a 10,800 kWh/year system.
File Form 5695 at tax time: Claim your 30% federal ITC with your annual tax return for the year the system is placed in service.
File Massachusetts Schedule CMS: Claim the state 15% / $1,000 credit on your Massachusetts state return.

For a complete walkthrough of calculating your system size and expected output, see our solar panel calculator guide. To understand your payback timeline, use our solar payback period calculator. And if you're evaluating adding battery storage to maximize the SMART adder, see our home battery storage costs guide.

Frequently Asked Questions

Is SMART still available in 2026? Yes. SMART is an active program as of 2026, though each capacity block has limited slots. Eversource, National Grid, and Unitil each manage their own block allocations. Contact your utility or a registered installer to check current availability.

Does SMART pay me even if I use all my solar electricity? Yes. SMART pays based on total kWh generated (measured by a dedicated production meter), not net export. You receive the SMART rate on every kWh your panels produce, regardless of whether you consume it or export it.

Can I get both SMART and retail net metering? No. SMART replaces traditional net metering for enrolled systems. Instead of retail export credits, SMART participants receive a reduced "avoided cost" export credit plus the SMART production payment. The combined value typically exceeds retail net metering for most systems.

What happens to SMART payments after 10 years? SMART payments end after 10 years. Your system then operates under a standard net metering arrangement with your utility, receiving the prevailing retail export credit rate.

Do I need to own my home to participate in SMART? You must be the system owner and electricity account holder. Renters cannot participate in SMART for rooftop systems. For renters, Massachusetts has a robust community solar market — see our community solar guide.