Hedging Your Bet on Massachusetts Solar Incentives
Solar energy incentives in Massachusetts have never been better. Between federal and state tax credits, rebates, and SRECS, the average payback on a residential solar installation in the state is six years (for an ideal site). If you want to pursue solar power for your home or business, these incentives won’t be around forever. The time to act is now.
They are also not likely to improve in the future. Incentives andrebate programs are funded by the state and federal governments and areconstantly under budgetary scrutiny. The purpose of these incentiveinitiatives is to spur deployment of renewable power. As more and moresystems are installed, the rebates will phase out. In addition, solarmanufacturers are finding ways to make components at cheaper prices andto improve the efficiency of solar photovoltaic equipment. Incentiveswill disappear as solar subsidies won’t be necessary to compete withfossil fuels.
But you don’t have to trust my opinion. They say history alwaysrepeats itself, right? California was the first state in this countryto make large investments in solar energy. They were also one of the first to introduce a solar rebate. California’s once generous rebate has declined from $2.50 per watt to$0.35 per watt as the state has reached an installed solar capacity ofmore than 215 megawatts.
As many people know, Germany leads the world in solar installations, providing more than 15% of the country’s electricity needs. Its generous feed in tariff has spurred increased solar energy generation from 1.3 billion kilowatt hours in 2005 to over 5 billionkilowatt hours today. This year, German solar subsidies have been cutby 16% for rooftop installations, 15% for farmland, and 11% for openspaces – this is quicker than originally planned. Germany is realizingthey don’t need generous incentives to continue investments in solartechnology.
In regards to Massachusetts, there are no guarantees that incentives will stay the same. The Commonwealth Solar rebate program is in its second iteration. The price per watt rebate stepped down in its evolution to Commonwealth Solar II (CSII). The fourth and final block of CSII will come to a halt by December 31, 2010 or when funding is exhausted(whichever comes first). This means we may have a new rebate structure starting January 2011, and there’s no telling how generous the rebatewill be.
The marketplace for Massachusetts Solar Renewable Energy Credits (SRECs) opened in January 2010. SRECs, or Solar Renewable EnergyCredits, are tradeable certificates that represent all the positiveenvironmental attributes of electricity generated from a solar electricsystem. Each time a solar system generates 1,000 kilowatt hours (1megawatt hour) of electricity, an SREC is issued which can then be soldor traded separately. Homes or business with solarelectricity-generating systems can participate in this program via an“opt-in” agreement, which guarantees participation for a set number ofyears. In 2010, the “opt-in” arrangement is for 10 years and can beadjusted downward by 2 years annually. You have the opportunity toreceive the most benefit this year since you can sign on to a 10 yearterm. In addition, the Solar Carve-Out will only support 400 MW of newsolar capacity in Massachusetts. Once the goal is reached, the opt-interm for all solar generators has expired, and SRECs will no longer begenerated.
One other thing to consider is the uncapped 30% federal tax credit on solar investments will expire in 2016. If the federal tax credit exceeds the taxliability, the excess amount may be carried forward to the next taxableyear. The excess credit can be carried forward until 2016, but it isundetermined if the unused tax credit can be carried forward afterthen. If you have concerns about consuming the tax credit by 2016, itmay be in your best interest to move forward on your solar projectsooner rather than later.
The moral of this story is if you’re interested in solar energy in Massachusetts; don’t wait to pull the trigger on the project. It is in your bestinterests to work with your solar contractor on completing yourapplication for the Commonwealth Solar II rebate immediately to securethe largest incentive. Rebates are not available for do-it-yourselfprojects and you will have to involve a solar professional to qualify. Brightstar Solar is a licensed Massachusetts solar installer with experience working with the Mass Clean Energy Center (MassCEC)solar rebate programs. Please reach out to us if you’re interested in acomplimentary solar evaluation and free estimate for your home or business in Massachusetts.
Brightstar Solar is a New England-based company that markets, designs, and installs phtotovoltaic systems which provide measurable and meaningful benefits to our customers, our country, and our environment. We enable our residential, commercial, and non-profit customers to create their own clean electricity safely, dependably, and with an attractive return on investment. Our blog covers the latest topics in the solar electric (PV) industry - technology, legislation, incentives, etc. Bloggers include husband and wife team and co-founders of Brightstar Solar, Jon Reese and Mona Reese.
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