Massachusetts solar incentives remain among the strongest in the country in 2026, but the landscape changed significantly at the end of last year. The federal residential solar tax credit expired on December 31, 2025. If you were quoted a solar price that included a 30 percent federal credit, that number needs to be revisited.
The good news: the state-level Massachusetts solar incentives are still substantial, solar panels cost has come down considerably, and the programs that remain available stack together in ways that make solar a genuinely strong financial investment for most homeowners. This guide covers every incentive currently available, what each one pays, and how to use them together.
The Most Important Change in 2026: No Federal Tax Credit
The federal residential clean energy credit under Section 25D was eliminated by the One Big Beautiful Bill Act, signed July 4, 2025, and effective December 31, 2025. Homeowners who purchase solar with cash or a loan in 2026 receive no federal tax credit.
There is one exception: if you finance your system through a lease or power purchase agreement (PPA), the third-party company that owns the system can still claim the 30 percent commercial investment tax credit under Section 48E. They typically pass some of that savings to you through lower monthly payments. But if you own your system outright, the federal credit is no longer part of your calculation.
This is the single most important thing to know when evaluating solar panels cost in 2026. A quote that has not been updated to reflect this change is not accurate.
The Massachusetts State Income Tax Credit
The Massachusetts state income tax credit for residential solar is 15 percent of your total system cost, capped at $1,000. Most residential systems cost well above $6,667, so most homeowners hit the cap.
The credit is non-refundable, meaning it reduces what you owe on your state return but will not generate a refund beyond your actual tax liability. Any unused portion can be carried forward for up to three years. You claim it by filing Schedule EC with your Massachusetts state income tax return in the year after installation.
It applies to the full installed cost including panels, inverter, racking, and labor. Given that the federal credit is gone, this $1,000 state credit is now the primary tax-based Massachusetts solar incentive available to homeowners who own their systems.
The SMART Program: Your Most Valuable Ongoing Incentive
The SMART program (Solar Massachusetts Renewable Target) is the most financially significant ongoing incentive still available in 2026, and it is the one most homeowners do not fully understand.
Unlike a tax credit, which reduces your upfront cost, it pays ongoing income based on how much electricity your system produces. The current residential base rate under SMART 3.0 is $0.03 per kilowatt-hour generated, paid by your utility for 10 years from the date your system goes live. That rate locks in at enrollment, so early movers secure it regardless of future program changes.
For a typical 10 to 11 kW system in Massachusetts, Payments under this program run approximately $300 to $400 per year at the base rate. That is not a dramatic number on its own, but it stacks on top of your electricity savings and net metering credits, and it continues for a full decade. For low-income households, the base rate doubles to $0.06 per kilowatt-hour. Systems with battery storage receive a storage adder on top of the base rate.
The SMART program operates through a declining block structure: as each capacity block fills, the rate for new applicants decreases. Homeowners who enroll earlier lock in higher rates. The Massachusetts DOER SMART program page has current enrollment status and rate information.
Net Metering: How You Get Paid for Excess Production
Net metering is the billing mechanism that makes daytime solar production useful even when you are not home to use it. When your panels generate more electricity than your home needs, the excess goes to the grid. Your utility credits you at the full retail rate for that electricity, and you draw on those credits at night.
In Massachusetts, net metering credits do not expire and roll over month to month. Eversource customers receive credits at 90 to 98 percent of the full retail rate. National Grid customers receive similar treatment. With Massachusetts electricity rates averaging over 31 cents per kilowatt-hour in 2026, each kilowatt-hour your system produces is worth real money regardless of when you use it.
Net metering runs simultaneously with it. You earn SMART payments for all production and receive net metering credits for excess exports. Both stack together on the same system, which is part of what makes Massachusetts solar incentives as strong as they are.
Tax Exemptions That Protect Your Investment
Two tax exemptions make Massachusetts solar incentives even more valuable by protecting the financial gains your system creates.
Property tax exemption. Under Massachusetts law, the value your solar system adds to your home is exempt from property tax assessment for 20 years. Solar installations typically add approximately $4 per watt in home value, according to Department of Energy research. On a 10 kW system, that is roughly $40,000 in added home value that your town cannot factor into your tax bill for two decades.
Sales tax exemption. Solar equipment purchased in Massachusetts is exempt from the state’s 6.25 percent sales tax. On a $33,000 system, that is over $2,000 in avoided tax. It is applied at the point of purchase and requires no separate application.
Battery Storage Incentives
If you pair your solar system with a battery, additional Massachusetts solar incentives become available on top of the base stack.
ConnectedSolutions, run by Eversource and National Grid, pays battery owners for allowing the utility to draw on stored energy during summer peak demand periods. For a typical Tesla Powerwall installation, ConnectedSolutions earnings run approximately $1,000 to $1,500 per year, locked in for five years. That income meaningfully shortens the effective payback period on a battery system.
National Grid customers installing batteries between 5 and 20 kWh also qualify for a $2,000 one-time rebate through the Connected Homes Program. Unitil customers receive a $100 per kilowatt-hour rebate. These stack on top of ConnectedSolutions payments and the 15 percent state tax credit, which applies to battery costs when installed alongside solar. Learn more about MassSave programs and financing options at masssave.com.
How the Incentives Stack
Here is what the full Massachusetts solar incentives picture looks like for a homeowner who owns their system in 2026, based on a typical 10 kW installation.
State income tax credit: $1,000 one-time credit against state tax liability.
SMART program: Approximately $300 to $400 per year for 10 years at the base rate, or more with storage or low-income adders.
Net metering: Full retail-rate credits for all excess production, rolling over indefinitely.
Property tax exemption: Added home value protected from property tax increases for 20 years.
Sales tax exemption: 6.25 percent saved on system cost at point of purchase.
Battery incentives (if applicable): ConnectedSolutions payments, one-time utility rebates, and SMART storage adder.
Without the federal tax credit, the solar panels cost calculation looks different than it did a year ago. But the state incentive stack above still produces a payback period of seven to nine years for most Massachusetts homeowners who own their systems, with decades of bill savings after that. For more on how grid-tied and battery configurations compare, see our guide on solar battery backup vs. grid-tied solar in Massachusetts.
What to Do Before You Request a Quote
To take full advantage of Massachusetts solar incentives, a few steps matter before you sign anything.
Confirm your installer is authorized to submit SMART applications. Not all contractors can do this. Marios handles SMART enrollment as part of every solar installation we complete.
Verify your utility. This program is available to customers of Eversource, National Grid, and Unitil. Customers of municipal light plants are not eligible. Check your utility before factoring SMART payments into your financial projections.
Get a quote that reflects 2026 reality. Make sure any estimate you receive does not include the federal tax credit. If a quote shows a 30 percent federal credit reducing your cost, ask the contractor to revise it. That credit no longer exists for homeowners who own their systems.
The Massachusetts Department of Revenue Schedule EC page has the current state tax credit details and filing instructions.
Marios has been installing solar across Massachusetts and Rhode Island since 2005. We handle the full project: system design, permitting, installation, utility interconnection, and SMART program enrollment. If you want an honest assessment of what solar looks like for your specific home under 2026’s Massachusetts solar incentives, schedule your free estimate or call us at 781.344.2420.