Don't miss out on the opportunity to save money with the Massachusetts tax credit for solar panels - apply before the deadline!
The Deadline for Massachusetts Solar Panel Tax Credit Approaches: Here's What You Need to Know
If you live in Massachusetts and are considering installing solar panels on your property, time is of the essence. The deadline for the state’s solar panel tax credit is approaching, and it’s important to understand the benefits and requirements before it’s too late.
Why Install Solar Panels in Massachusetts?
Massachusetts is known for its forward-thinking approach to renewable energy. The state has set aggressive goals to reduce greenhouse gas emissions and transition to a clean energy future. As a homeowner, installing solar panels not only helps the environment but also provides numerous financial incentives.
The Solar Investment Tax Credit (ITC)
The solar panel tax credit, also known as the Solar Investment Tax Credit (ITC), is a federal incentive that allows homeowners to deduct a portion of the cost of their solar panel system from their federal taxes. The credit can be claimed by both residential and commercial properties and is available for a limited time.
The federal ITC currently provides a 26% tax credit for solar panel installations. This means that if your solar panel system costs $20,000, you could potentially receive a tax credit of $5,200. However, it’s important to note that the percentage will decrease over time, so taking advantage of the credit sooner rather than later is highly recommended.
The Massachusetts Solar Renewable Energy Credit (SREC)
In addition to the federal tax credit, Massachusetts offers its residents the Solar Renewable Energy Credit (SREC) program. This program allows homeowners and businesses to earn credits for the clean energy their solar panels produce.
Under the SREC program, for every 1,000 kilowatt-hours (kWh) of electricity your solar panel system generates, you earn one SREC. These credits can then be sold to utility companies or other entities that need to meet their renewable energy quota. By participating in the SREC program, homeowners can potentially earn a significant income over the course of their solar panel system’s lifespan.
The Massachusetts Residential Energy Credit
To make solar panels even more enticing, Massachusetts also offers the Residential Energy Credit. This credit allows homeowners to claim a deduction on their state income taxes for a portion of the cost of their solar panel system.
The Residential Energy Credit is calculated by multiplying the cost of the solar panel system by the corresponding percentage for the year it was installed. For example, if your solar panel system costs $25,000 and you install it in 2021, you would multiply $25,000 by 15% to get a credit of $3,750.
Important Deadlines to Keep in Mind
Now that you know about the various tax credits and incentives available, it’s crucial to understand the deadlines associated with them. The federal Solar Investment Tax Credit is currently set to decrease to 0% for residential systems by the end of 2022. While there is a possibility that this deadline may be extended, it’s not guaranteed and could be a significant financial loss if missed.
To claim the Massachusetts Residential Energy Credit for the current tax year, you must have your solar panel system installed and in operation by December 31st. This means that if you want to take advantage of the tax credit this year, time is running out.
The Bottom Line
Installing solar panels on your property is not only a smart financial investment but also a way to contribute to a greener future. The tax credits and incentives available in Massachusetts make solar panel installation even more appealing. However, the clock is ticking, and it’s important to act quickly to meet the upcoming deadlines.
By taking advantage of the federal Solar Investment Tax Credit, the Massachusetts Solar Renewable Energy Credit, and the Residential Energy Credit, you can significantly reduce the overall cost of your solar panel system while earning additional income for the energy your panels produce.
Don't let the deadline pass you by – contact a reputable solar installer today to get started on your solar panel installation and take advantage of these fantastic incentives while they last.