The Massachusetts state tax credit and exemptions
Beyond SMART and net metering, Massachusetts offers a state income tax credit and two valuable tax exemptions. Here's what each one is worth in 2026.
Massachusetts backs solar with three distinct tax benefits at the state level. None of them is the (now-expired) federal credit — these are separate, and they still apply in 2026.
1. The state income tax credit — $1,000
Massachusetts offers a residential renewable energy income tax credit worth 15% of system cost, capped at $1,000. For nearly every residential system, that means a flat $1,000 credit on your Massachusetts state return. If your tax liability is lower than the credit in a given year, the balance can generally carry forward. You claim it on your state return with documentation from your installer.
2. Sales tax exemption — ~$2,000 saved
Solar equipment is exempt from the 6.25% Massachusetts sales tax. On a typical $33,100 system, that's roughly $2,069 you simply don't pay. There's no application — your installer shouldn't charge sales tax on qualifying equipment. If one incorrectly does, request the refund from the installer, not the state.
3. Property tax exemption — 20 years
Solar typically adds $15,000–$20,000 to a home's assessed value. Massachusetts exempts that added value from property tax increases for 20 years — one of the longest such exemptions in the country. So your home is worth more, but your property tax bill doesn't rise because of the panels. No application is required.
The 30% federal residential solar tax credit expired December 31, 2025. Some tax-savings estimates online still include it. For a 2026 cash or loan purchase, your federal credit is $0 — here's the full explanation. The Massachusetts credits above are separate and still apply.
How they stack with everything else
These tax benefits are on top of SMART production income and net metering. The tax credit and exemptions reduce your upfront and holding costs; SMART and net metering pay you over time. Together they're what make Massachusetts one of the strongest solar states in 2026.
How to actually claim the state credit
Claiming the $1,000 Massachusetts residential renewable energy credit happens on your state income tax return, using the documentation your installer provides for the system's cost. The credit is worth 15% of the system cost up to the $1,000 cap, so nearly every residential system reaches the full amount. If your Massachusetts tax liability in the year of installation is less than the credit, the unused portion can generally be carried forward to future tax years, so you do not lose it. As with anything tax-related, it is worth confirming the specifics with a qualified tax professional who can look at your full return.
Understanding the tax exemptions in practice
The sales-tax and property-tax exemptions are valuable precisely because they require no effort on your part. The sales-tax exemption means your installer simply does not charge the 6.25% state sales tax on qualifying equipment — on a typical system, that is roughly $2,000 you never pay, with no form to file. The property-tax exemption means that although your home's assessed value rises with solar, that added value is excluded from your property tax for 20 years, again automatically. Together these exemptions quietly remove thousands of dollars of cost and future expense without any paperwork burden.
How these stack with the ongoing incentives
It is worth being clear about how the tax benefits relate to SMART and net metering, because they work differently. The tax credit and exemptions reduce your upfront and holding costs — they lower what you pay and what you owe. SMART and net metering, by contrast, pay you over time for the energy your system produces and exports. A complete picture of your solar economics includes both: the one-time tax benefits that reduce cost, and the ongoing income streams that build return year after year. Any quote that shows only one side is incomplete.