Commercial Solar Financing & Incentives

Solar Incentives for Businesses in Massachusetts

Investment Tax Credit (ITC) 

The Investment Tax Credit is an upfront tax credit that reduces your business’s federal income tax liability by 30% of your solar installation costs. It’s one of the best commercial solar incentives available to Massachusetts businesses and will significantly reduce your solar installation costs. If your project meets certain labor requirements and/or is located in a designated energy community, you may be eligible for bonus credits on top of the 30% ITC. 

Direct Pay ITC for Tax-Exempt Organizations

Tax-exempt organizations including governments, non-profits, and rural electric cooperatives can benefit from the ITC thanks to a new direct pay option created as part of the Inflation Reduction Act. The direct pay (also known as elective pay) option allows qualified organizations to receive a refund worth 30% of their solar installation costs in place of the federal solar tax credit. 

MACRS Depreciation

The Modified Accelerated Cost-Recovery System (MACRS) is a tax depreciation system available to businesses that install commercial solar panels. Under MACRS, tax law offers 100% first-year ‘bonus’ depreciation for qualified commercial solar energy systems. Taxpayers may opt out of the first-year depreciation and choose a 5-year MACRS schedule instead if they wish. MACRS depreciation makes it easier for your business to quickly recover the costs of your solar installation investment.

Net Metering 

Most commercial solar projects are eligible to participate in net metering in Massachusetts. Net metering allows you to export the excess electricity your solar panels generate to the electric grid. You earn credit with your utility company for the power you send to the grid and you can use your credit to offset the cost of electricity you buy from the grid when your solar panels are not producing power, like at night or when it’s too cloudy. In Massachusetts, net metering policies vary based on system size, project type, and other factors. My Generation Energy can help you determine whether your project qualifies and what your rate will be. 

Solar Renewable Energy Credits (SRECs) 

Solar Renewable Energy Certificates (SRECs) are tradable certificates that represent the environmental benefits of generating solar energy. In Massachusetts, utilities are required to source a certain percentage of their electricity from renewable sources, and they can meet this requirement by purchasing SRECs from solar system owners. For every 1 megawatt-hour (MWh) of electricity a solar system produces, the owner earns one SREC, which can then be sold on an open market for additional revenue.