Take Advantage of Massachusetts Commercial Solar Incentives
Businesses in Massachusetts can take advantage of a number of state funded incentives that make investing in an solar energy system pay off quickly. This is because the state has demonstrated a commitment to making sure solar energy works here. In order to continue to be a solar energy leader in the U.S., state legislators have recently updated existing standards and laws, while adding some new ones.
Some of the more effective changes include the following:
- Global Warming Solutions Act (GWSA) – Updated to apply the more stringent goal of a 80% total emissions reduction by 2050, compared to the 1990 baseline.
- Renewable Portfolio Standard (RPS) – Increased the goals from 2020 to 2050 by 2% per year, ending in a requirement of 80% of the state’s electricity to be derived from renewable energy sources.
- Clean Energy Standard (CES) – In response to the GWSA and RPS, the Massachusetts Department of Environmental Protection (DEP) to assign more stringent CO2 reduction requirements. By 2050, the state now mandates that CO2 emissions must be 80% below the level when the policy was amended in 2017.
These policies are designed to direct utilities and the power grid operator, while also giving the right signals and incentives to the clean energy market.
Importantly, these also inform the Massachusetts Department of Energy Resources (DOER) in producing the required regulations and administering the incentives. The result is the Solar Massachusetts Renewable Target, known as SMART.
The Solar Massachusetts Renewable Target
The Massachusetts SMART Program establishes a preset, and therefore predictable, payment or tariff that utilities will pay for solar power generated by businesses. The initial payment ranges from about 25.5 cents per kilowatt-hour (kWh) in Eastern Massachusetts to 14.3¢/kWh for the largest systems in Western Massachusetts. The tariff is graduated by size, paying the highest for smaller systems. The capacity groupings are as follows: 25 kW to 250 kW (AC); 250 kW to 500 kW (AC); 500 kW to 1,000 kW (AC); 1 MW to 5 MW (AC)
The program was designed to promote adding 1.6 GW more of solar power capacity across the state. There are essentially 8 – 200 MW sequential tariff schedules, or blocks under which an application will fall. It is on a first come, first serve basis, so timing is very important. The sooner you contract for a solar energy system, the earlier your installer can apply and the more likely you are to enjoy the highest reimbursements for that time frame. For each successive block, the rate drops by approximately 4%.
Other Massachusetts Solar Incentives
The state of Massachusetts offers some additional, minor incentives that help businesses save even more by adding a solar energy system to their homes.
Corporate Tax Credits – Massachusetts allows businesses to deduct the cost paid for the installation of qualified solar systems from net income for state excise tax purposes. 100% of the tangible property portion of the excise tax is permitted. Specific qualification guidelines must be met.
Sales and Property Tax Exemptions – No sales tax is charged on the solar energy system. For 20 years, the value of the system is not subject to property tax.