In addition to the Solar Rebate Program, there are both federal and state tax credits to offset an additional 30+% of the cost of your solar panel system. Note that these are tax credits, not deductions – which means they can be applied to what you owe the IRS or received as a refund and are equivalent to putting money in your pocket.
Note that these are non-refundable tax credits, which just means that they must be less than your total tax liability in order to receive them in a refund. However, they carry forward until at least 2016 so even if you have a very low tax bill, odds are you will still get the full amount back over time.
The federal Residential Renewable Energy Tax Credit covers 30% of project costs for solar systems and expires 12/31/2016. You would need to complete IRS Form 5695 to receive this credit.
At the end of both 2010 and 2011, it looked like this program would be cut but that never happened. So keep your fingers crossed and don’t delay! Visit the solar company ratings page and get your project started before this tremendous incentive perishes.
The Massachusetts Solar Wind and Energy Credit is a 15% tax credit for Massachusetts residents, but unfortunately is capped at $1,000. You would need to report this on Massachusetts Tax Schedule EC.
Now that we’ve covered reductions to the cost of your system, let’s take a look at the benefits of investing in solar panels. And the biggest of those is the thousands of dollars in annual income you’ll receive from generating Massachusetts SRECs. Or if you'd like to get started now, visit the solar company ratings page to claim up to $500 in savings.
DISCLAIMER: While this information is believed to be accurate and reliable, you should consult with a tax professional.