Incentives at the federal, state and local level can enable customers to reduce the cost of going solar by as much as 50 percent, allowing property owners to achieve a 2-5 year simple payback and then benefit from “free” electricity for the next 15-20 years. Typically, these results are achieved through a mix of government tax incentives, Solar Renewable Energy Certificates (SREC) and electric cost avoidance.
Massachusetts has various incentives and programs in place to help support and grow the solar photovoltaic (PV) system marketplace in the state. There are four incentives in particular of interest to prospective commercial solar energy system owners in Massachusetts:
Solar Renewable Energy Certificates – Solar Renewable Energy Certificates (SRECs) are a tradable, non-tangible energy commodities in the United States that represent proof that 1 megawatt-hour (MWh) of electricity was generated from an eligible renewable energy resource. SRECs became available in Massachusetts due to the creation of a Renewable Portfolio Standard (RPS) with a specific allocation for solar energy. This program provides a means for SRECs to be created on behalf of solar energy system owners and sold to Massachusetts electric suppliers to meet the solar RPS requirement. Electric suppliers are required to use the SREC program to show compliance with this part of the state’s Renewable Portfolio Standard.
SRECs are separate from the value of the electricity itself and permit the owner or purchaser to claim the benefits of clean energy production by effectively subsidizing the cost of the installed system. SRECs are designed to provide individuals and/or businesses with an economic incentive to invest in solar electric systems. They represent the renewable attributes from a solar facility, bundled in minimum denominations of 1 megawatt hour (MWh) of production. The additional income received from selling the solar certificates increases the economic value of an investment. Instead of up-front subsidies from the state, solar system owners can recover their investment by selling SRECs to electric utilities that use them to fulfill their portion of the state mandate.
Net metering is defined as a method of crediting customers for electricity generated via on-site solar PV systems in excess of their electricity consumption. Building owners with their own solar generation capability offset the electricity they would have purchased from the utility. When these building owners generate more than they use in a billing period, their electric meter turns backwards to indicate their net excess generation. In Massachusetts, net-metered electricity is credited at the full retail generation cost.
Local Loan Program
The Boston-based non-profit organization New Generation Energy offers low-interest loans for the installation of solar electric and solar water heating systems via its Community Lending Program. The solar loans are available to companies (including sole-proprietorship) and non-profits in New England (Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, and Vermont), with an emphasis on those located in low- and middle-income communities. For more information, visit their website at http://newgenerationenergy.org.
Property Tax Incentive
Massachusetts law provides that solar-energy systems and wind-energy systems used as a primary or auxiliary power system for the purpose of heating or otherwise supplying the energy needs of taxable property are exempt from local property tax for a 20-year period. This incentive applies only to the value added to a property by an eligible system, according to the Massachusetts Department of Energy Resources (DOER). It does not constitute an exemption for the full amount of the property tax bill.
The Database of State Incentive for Renewables & Efficiency (DSIRE – www.dsireusa.org) lists specific details for these and other programs.
Solar power has never been more economical and the Massachusetts state government has taken a policy stance by providing incentives designed to reduce costs and grow the renewable energy portfolio in the area. Professional solar project developers such as Solect can help determine which incentives are appropriate and will maximize a customer’s return on investment.