The 411 On Solar Power Incentives
According to Save On Energy, a solar panel system in Massachusetts costs between $3 and $5 per watt. The average solar system size for residential use is five kilowatts, making the average solar system cost anywhere from $12,000 to $20,000. Most of the time, installing solar panels in Massachusetts will save you money. As of Aug 2022, the average cost of solar panels in Massachusetts is $2.87 per watt making a typical 6000 watt (6 kW) solar system $12,756 after claiming the 26% Federal Solar Tax Credit. The average resident will see substantial energy savings that pay off the system in around 9 years and then provide additional savings of around $33,013. When you own your own solar panels you can generate free renewable energy to power your home. But sadly, there is no such thing as free solar panel installation in Massachusetts, despite what you may have seen online.
But on the bright side Solar panels are much cheaper today than they were 10 years ago, which means millions of homeowners that could not previously afford to do so are switching to solar. Massachusetts Homeowners that qualify for a tax incentive programs still have to buy solar panels. With rebates being as high as they are, homeowners are able to drastically reduce their power bill without dealing with the total upfront costs of installing solar panels. Just remember you can only claim the solar tax credit one time for your solar power installation. If you have any unused amount remaining on your tax credit that you are unable to claim in a single tax year, you may be able to carry over that tax credit value for up to five years.
The 26% federal solar tax credit is available for purchased home solar systems installed by December 31, 2022. The 15% state solar tax credit is available for purchased home solar systems in Massachusetts. (Max. $1,000 state tax reduction.) The Massachusetts Clean Energy Center highlighted eight incentives and programs for residents to take advantage of. According to the Appraisal Journal, a home's value increases roughly $20 for every $1 decrease in energy costs. If solar panels save a household $600 a year in electricity bills, that home's value may increase by $12,000.
In Massachusetts, the average monthly electricity bill for residential consumers is $200/month, which is calculated by multiplying the average monthly consumption by the average rate for electricity: 819 kWh * 24 ¢/kWh. The average Massachusetts household paying $200 a month for electricity can potentially save an estimated $71,800 over the next 20 years — almost $3,800 a year — by purchasing and installing a rooftop solar system. This is before factoring average annual rate increases. The savings from offsetting 100% of an electricity bill with solar can add up fast! Assuming a 2.1% annual increase in electricity prices, someone in Massachusetts can expect to save a minimum of $2,400 in their first year, $12,500 over five years, $26,400 over 10 years, and $58,900-$71,800 over 20 years on electricity bills.
Massachusetts Electric Utility Retail Price is at a current level of 0.2085, up from 0.1918 one year ago. This is a change of 8.71% from one year ago. Commercial energy clients will be seeing a 26% increase in electricity rates going from 9.469 cents per KWh to 12.007 cents per KWh. For the past six years, most U.S. states have seen a steady increase in electrical rates but Massachusetts is seeing the worst of it. With the second fastest increase in electrical rates in the U.S Second to Hawaii, both residential and commercial energy clients in Massachusetts are paying more than double what they were paying a few years ago. From the perspective of the electric companies, each person that goes solar will cause a hike in the rates of those who refuse to go solar so that the electric companies will not lose profits. Simultaneously as each home adds energy to the grid and lowers the demand that actual costs for electricity will lower for the utility company so they increase profits in that way also the only loser is the consumer too slow to get solar on their home or who purchases a home without a solar panel and battery system.
While Massachusetts has recently approved efforts to source its energy from renewable sources, it will be over a decade before these solutions go into full effect. Until then, 40% of Massachusetts’ energy is currently sourced from Natural Gas pipelines. Cold winter months increase the demand for heating and electricity, which in turn put strain on existing natural gas pipelines and infrastructure. To keep up with demand, utility companies must purchase large quantities of electricity and storage it for the winter months, creating those price increases. The best interests of the energy company is to dissuade homeowners from getting solar panels, roofs and battery systems so they offer opportunities through incentives and discounts but essentially they can never compete with a system that actually pays for itself and eventually will give the homeowner free energy while simultaneously easing the demand on the grid and thus causing a reduction in everyone's costs!