Federal Solar Tax Credit Changes: What Massachusetts Homeowners Need to Know
If you’ve been following the news, you’ve probably heard by now about the damage the recent budget ...
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If you’ve been following the news, you’ve probably heard by now about the damage the recent budget bill has caused towards our vital and inevitable push toward clean energy. Among the most significant setbacks is the scaling back of the federal solar tax credit, a program that has helped thousands of Massachusetts homeowners transition to solar energy. As a local realtor passionate about sustainability, home energy efficiency, and helping clients make smart long-term decisions, I want to break down what these changes mean and why solar still makes sense, especially here in Massachusetts.
Key Takeaways:
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The 30-40% Federal solar tax credit is being eliminated at the end of 2025.
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Massachusetts incentives remain strong, including up to $1,000 in state tax credits and 10 years of SMART payments.
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MA electric rates are among the highest in the U.S., making solar even more valuable for long-term savings.
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Mass Save offers rebates and 0% financing for heat pumps and insulation that pair well with solar. These will continue for years to come and are not effected by the changes to Federal incentives.
What’s Changing with the Federal Solar Tax Credit?
Until recently, homeowners could claim a 30% federal tax credit on the total cost of installing a solar energy system. That included not just the solar panels, but also batteries, inverters, racking systems, and installation costs. This credit was one of the most effective incentives for making solar financially feasible and attractive. For a typical solar project this could be a saving of between $10-20k.
However, the recent federal budget changes have effectively destroyed these incentives for any residential project completed after December 31st, 2025 (this year).
If you’re considering solar, now is the time to act. The sooner your system is installed and activated, the more you stand to benefit from any remaining federal support. But don’t let this news discourage you. Massachusetts continues to lead the country in solar incentives, and the local landscape still makes solar a very smart investment.
Why Solar in Massachusetts Still Makes So Much Sense
Massachusetts consistently ranks among the top states in the nation for solar energy, not just because of policy support but because of how our electricity market works.
1. We Have Some of the Highest Electricity Rates in the U.S.
Massachusetts residents pay some of the highest electric rates in the country. Utility rates here are regularly 50 to 100 percent higher than the national average. With the recent federal changes pulling back support for clean energy infrastructure, the factors that drive rates even higher, like aging grids and fossil fuel volatility, are likely to get worse.
This makes solar even more valuable. Every kilowatt-hour you produce on your roof is one you don’t need to buy from the utility at premium prices. As rates rise, the return on your investment in solar grows even faster.
2. State-Level Incentives Are Still Strong
Massachusetts has built one of the most comprehensive support systems for solar in the country. These programs remain in place and continue to offer real savings for homeowners:
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Massachusetts Residential Renewable Energy Income Tax Credit: Up to $1,000 or 15% of your total system cost, whichever is less.
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SMART Program: Monthly payments from your utility company for ten years, based on your system’s energy production.
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Net Metering: Credits on your electric bill for any excess electricity you export back to the grid. This allows you to use summer overproduction to offset winter usage.
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Sales and Property Tax Exemptions: Your solar system is exempt from sales tax, and the added home value doesn’t increase your property taxes. Please keep in mind that owned solar adds a lot to the value of your home and a Green Realtor like me can help you calculate that - it's more than just the project cost. A typical solar system can save you $50-150k over the course of 30 years.
These benefits are in addition to the ongoing utility savings you’ll see each month, which adds up significantly over the life of the system.
As a Green Realtor, environmentalist and passionate proponent for a faster energy transition, I make a point to stay informed about the world of home energy efficiency and production. I can give you the information you need and the right contractors to talk to about your next project. Click Here to Connect about your Solar Questions
How Mass Save Can Help You Use Solar Power Even More Effectively
Installing solar panels is a great step, but pairing that clean electricity with energy-efficient upgrades is where the real transformation happens. That’s where Mass Save comes in.
Mass Save is a statewide energy efficiency program that offers no-cost home energy assessments, rebates, and zero-interest loans for improvements that help you get more from every kilowatt-hour you use.
- Heat Pumps and Electrification: Mass Save provides generous rebates and financing for air-source and ground-source heat pumps. These systems offer both heating and cooling, all powered by electricity. If your electricity comes from your solar panels, you're reducing your heating and cooling costs while also cutting fossil fuel use. It's a win on every level.
- Home Weatherization: The program covers 75 to 100 percent of the cost of insulation, air sealing, and other improvements that help your home retain heat in winter and stay cool in summer. These upgrades lower your energy demand and make your solar system even more effective.
- Battery Storage Support: While not directly funded through Mass Save, other state-level programs offer incentives for battery storage. Pairing batteries with solar helps you avoid peak pricing and keep your home powered during outages. It’s another big step toward energy independence. You can even benefit from this type of storage without the help of an electrician using products like EcoFlow's batteriers.
Real Estate Benefits of Solar and Efficiency
From a real estate perspective, solar and energy efficiency are no longer niche features. Buyers are increasingly looking for homes that are cost-effective to operate and resilient to future energy price spikes.
Homes with solar sell faster and often at a premium. As a Green realtor, I make sure my listings highlight solar systems and any related efficiency improvements clearly, because they add real value.
If you’re thinking about selling your home, adding owned (not leased or PPA) solar could increase its marketability and sale price. If you're buying, I can help you find homes that already have solar, are solar-ready, or are eligible for the remaining incentives.
The Bottom Line
Yes, the federal rollback is frustrating. It slows national progress on clean energy and makes things harder for homeowners who were hoping to rely on federal help to go solar. But here in Massachusetts, the story is different.
We still have excellent state-level support. We still pay some of the highest electric rates in the country, which means the value of solar has never been higher. And we still have tools like Mass Save to make our homes cleaner, cheaper, and more efficient.
If you're interested in solar, don't wait. Every month you delay could mean higher costs and missed opportunities. Whether you're planning a major upgrade, buying a home, or just starting to explore your options, I’m here to help you navigate the process.
Let’s talk about how to make solar and energy efficiency part of your real estate strategy. The incentives may be changing, but the sun is still shining, and Massachusetts is still one of the best places in the country to go solar. I work with an amazing provider that services all throughout our area, if you'd like me to connect you with my personal solar company, email me or fill out the form here.
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