Massachusetts isn't the sunniest state in the country. But thanks to some of the highest electricity rates in the nation and a layered set of state incentives that don't exist in most other places, it's consistently one of the best states for residential solar ROI. That remains true in 2026 — even after the federal tax credit expired.
If you've been waiting on a clearer picture of what's available, here it is.
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The Federal Tax Credit: What Happened
The same story that affected homeowners nationwide applies in Massachusetts: the federal residential solar tax credit (Section 25D) expired on December 31, 2025.
The One Big Beautiful Bill Act, signed on July 4, 2025, ended the 30% credit for homeowners who purchase or finance a solar system. Systems fully installed by December 31, 2025 can still claim it when filing 2025 taxes, and unused credit from prior years can be carried forward — but new purchased installations in 2026 do not qualify.
The one remaining federal pathway is third-party ownership — solar leases and Power Purchase Agreements (PPAs). Because the financing company owns the system, it can claim the commercial Investment Tax Credit (Section 48E) and pass some of that savings along through lower monthly payments. That credit is available through the end of 2027.
In Massachusetts, the economics of lease versus purchase are worth examining carefully. The state's incentives are substantial enough that ownership often still wins — but the comparison is more nuanced than it was a year ago. A Lunex advisor can walk you through what the numbers look like for your situation.
Massachusetts Incentives: A Genuinely Strong Stack
While the federal credit is gone for purchased systems, Massachusetts has always had its own incentive structure — and it's one of the richest in the country. None of these programs were dependent on the federal credit, and all remain in effect.
The SMART Program
The Solar Massachusetts Renewable Target (SMART) program is Massachusetts' flagship solar incentive, and it's unlike anything available in most other states. Rather than a one-time rebate or tax credit, SMART pays you a fixed rate for every kilowatt-hour your system generates — whether you use it in your home or send it back to the grid.
The program is now in its third iteration, SMART 3.0, which launched in October 2025 under updated regulations (225 CMR 28.00) administered by the Massachusetts Department of Energy Resources (DOER). It applies to customers of the state's three investor-owned utilities: Eversource, National Grid, and Unitil.
How it works: Once your system is enrolled in SMART, your rate is locked in for the duration of the program term. Your installer submits the application on your behalf through the SMART Program Administrator (CLEAResult, at masmartsolar.com), and once approved, you receive monthly payments or bill credits from your utility based on your system's production.
What it pays: For residential systems up to 25 kW, SMART 3.0 uses a flat incentive rate — currently approximately $0.03 per kWh for standard households, or $0.06 per kWh for qualifying low-income households (at or below 80% AMI). That base rate can be meaningfully increased through "adders":
- Battery storage adder: +$0.04/kWh for systems paired with a battery, bringing the combined rate to roughly $0.07/kWh
- Building-mounted adder: +$0.02/kWh for standard rooftop installations
- Low-income adder: Additional $0.05/kWh on top of the low-income base rate
For a typical 8 kW rooftop system producing around 10,000 kWh per year, the base SMART payment works out to roughly $300/year — not transformative on its own, but stacked with net metering savings (see below), the combined annual benefit is closer to $2,500–$3,200 for a well-sized system.
Important caveat: SMART payments are separate from and in addition to net metering credits — the billing mechanism that lets solar owners "bank" excess electricity their panels send to the grid as credits on their utility bill. You earn both simultaneously: SMART pays you for all production, net metering credits you for what you export. But it's worth knowing that SMART 3.0 rates at the base level are significantly lower than earlier SMART iterations. The value is most compelling when you pair solar with battery storage.
Program term: There's some inconsistency in how different sources describe the residential SMART term — some cite 10 years, others 20. The official DOER regulations (225 CMR 28.00) and mass.gov reference a 20-year tariff term for behind-the-meter systems under SMART 3.0, though payments to residential customers are structured monthly. Confirm the term applicable to your specific application with your installer.
Capacity note: Program Year 2026 has 600 MWAC of available capacity. Once that fills, new enrollment pauses until the next program year. There's a real incentive to apply earlier in the year.
Net Metering
As introduced above, net metering is the billing mechanism that credits you for excess electricity your panels send back to the grid. Massachusetts requires investor-owned utilities to credit residential solar customers at close to the full retail rate for those exports — currently approximately 90–98% of the retail rate, or about $0.26–$0.28 per kWh depending on your utility. Credits roll over month to month, letting you bank summer production for use in winter.
One important note: unlike Florida, Massachusetts net metering credits at year-end do not convert to a cash payout. Unused credits are zeroed out annually (in April for Eversource customers; March for National Grid and Unitil). This makes proper system sizing critical — you want to match your system to your annual usage, not dramatically exceed it.
Policy watch: In January 2026, the Massachusetts Department of Public Utilities opened Docket 25-200, formally reviewing potential reductions to the net metering credit rate. This follows a pattern seen in other states — California cut net metering compensation by roughly 75% in 2023, and several others have followed. There is no change in effect yet, and systems interconnected before any policy change are expected to be grandfathered under current rates. But this is worth monitoring, and it's another reason to get your system installed and interconnected rather than waiting.
State Income Tax Credit
Massachusetts offers a state income tax credit worth 15% of your solar installation cost, capped at $1,000. Most residential systems cost well above $6,667, so nearly all homeowners reach the cap.
You claim this by filing Schedule EC with your Massachusetts Form 1 state income tax return for the year your system becomes operational. If your tax liability in that year is less than $1,000, you can carry the unused credit forward for up to three years.
The credit applies only to owned systems — lease and PPA customers cannot claim it.
Property Tax Exemption
Under Massachusetts General Law Chapter 59, Section 5, the added value a solar installation brings to your home is exempt from property tax assessment for 20 years from the date of installation.
Solar systems add meaningful value to Massachusetts homes — estimates typically range from $15,000 to $30,000 depending on system size and location. With the state's average effective property tax rate around 1.1–1.2%, a $20,000 value increase that would otherwise add $220–$240 per year to your tax bill is instead fully shielded. Over the 20-year exemption window, that's potentially $4,000–$5,000 in avoided taxes — more in high-value markets with higher millage rates.
No application is needed. Your local board of assessors will exclude the system's value from taxable assessed value per state law.
Sales Tax Exemption
Solar energy equipment is fully exempt from Massachusetts' 6.25% state sales tax under MGL Chapter 64H, Section 6(dd). This covers panels, inverters, racking, and associated components, as well as battery storage systems.
On an average Massachusetts residential installation costing $30,000–$37,000, the sales tax exemption saves roughly $1,875–$2,300 — and it's automatic. Your installer handles the paperwork; you don't need to file anything.
Battery Storage Incentives
Massachusetts has built one of the strongest incentive stacks for residential battery storage in the country, and that's increasingly relevant now that the federal credit for purchased systems is gone.
ConnectedSolutions: This demand response program — offered through Eversource and National Grid — pays battery owners for allowing the utility to draw on stored power during peak demand events. Eversource pays approximately $275/kW for summer events plus $50/kW for winter events; National Grid pays around $225/kW summer and $50/kW winter. A 10 kW battery on Eversource can earn roughly $3,250 per year from ConnectedSolutions alone, with events capped at 60 hours annually and your backup reserve protected.
SMART storage adder: As described above, pairing your solar system with a battery adds $0.04/kWh to your SMART payment rate for the full program term.
Battery rebates: Some municipal utilities also offer direct rebates for battery installations — Eversource has historically offered rebates for qualifying systems, and program details vary by year. Check with your utility and installer for current availability.
Municipal Light Plant Customers
About 13% of Massachusetts electricity is served by municipal light plants (MLPs) rather than the three investor-owned utilities. If you're an MLP customer — in communities like Concord, Ipswich, Norwood, or Taunton — the SMART program and ConnectedSolutions don't apply to you. However, many MLPs offer their own rebate programs. Concord Municipal Light Plant, for example, has historically offered per-kilowatt installation rebates. Contact your MLP directly for current program terms.
What's the ROI Picture in 2026?
Massachusetts consistently ranks among the best states for solar ROI despite its cloudy reputation, and the numbers still support investment in 2026 even without the federal credit.
The key driver is electricity rates. Massachusetts homeowners pay some of the highest electricity prices in the continental United States — averaging around $0.29–$0.33 per kWh depending on utility and rate class, well above the national average. Every kilowatt-hour your panels produce is one you don't buy at those rates.
Stacking that electricity bill savings with SMART payments, net metering credits, the sales tax exemption, the state tax credit, and 20 years of property tax protection, most estimates place payback periods for Massachusetts residential solar in the 7–9 year range in 2026 — without any federal credit in the picture. After payback, a 25-year panel lifespan means 16–18 years of net savings. Industry estimates for total 25-year savings on an average Massachusetts system run well north of $100,000.
Utility matters: National Grid customers in eastern Massachusetts often see the most favorable economics given their rate structure. Eversource customers in the greater Boston area and on the South Shore follow close behind. Western Massachusetts — lower rates, slightly lower irradiance — still pencils out, though payback periods tend to be longer.
Is Solar Still Worth It in Massachusetts?
For most homeowners with a suitable roof and above-average electricity usage, yes — and arguably more clearly so than in states that depended heavily on the federal credit, because Massachusetts' state-level incentive stack is unusually rich.
The SMART program, near-retail net metering, no sales tax on equipment, no property tax hit for 20 years, and a state income tax credit add up to a meaningful offset even in the absence of the 30% federal credit. Battery storage makes the math even more compelling for homeowners who want resilience along with savings.
What matters most is getting the sizing right and working with an installer who understands how these programs interact. A system sized too large wastes production under Massachusetts' net metering rules. A system that qualifies for the SMART battery adder significantly outperforms one that doesn't.
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This post reflects current policy as of April 2026. Solar incentive programs change — we update this guide regularly. Always consult a tax professional regarding your specific tax situation.