Incentives and Tax Credits
for Home Renewable Energy and Energy Efficiency Improvements
The list of incentives and tax credits available to home owners for energy improvements can be confusing. This page gives a brief description of the incentives and tax credits that are available for residential renewable energy and energy efficiency improvements from Massachusetts, Federal, and National Grid and Energy StarŪ programs.
Please note: These descriptions were extracted on 2/26/2006 from information published by the relevant state and federal agencies, and may be out of date. The Energy Network does not assume responsibility for their accuracy or completeness. Incentives are limited in each category by other incentives that may apply. Please click "More Information" after each description for latest updates.
Quick Reference to Incentives - scroll past this table for details
| Federal Income Tax | Federal Tax Credit | State Income Tax | State Sales Tax | Local Property Tax | National Grid / Energy Star | Installing home energy efficient products | Up to $500 credit | 10% credit for buying qualified energy efficiency improvements | Up to 30% or $600 credit on heating products | No-cost assessment, 50% rebate up to $1500 on improvements; and discounted energy efficient bulbs |
|---|---|---|---|---|---|---|
| Solar or wind-powered renewable energy systems | Rebates from electric utilities for solar power exempt. | 30% of a solar panel or equiv. credit for solar water system | 15% or $1000 credit | Exempt | Exempt | Low income | Home heating fuel deduction up to $800 | Appliance Management Program |
| Mortgage provisions | Special mortgage provisions for solar water heating and PV systems | 0% financing up to $15,000 for recommended energy upgrades | ||||
| Automobile | $250 to $3400 credit for new hybrid | |||||
| Fuel cell power plants | 30% tax credit for purchase not to exceed $500 per .5 KW | |||||
| Builders of new energy efficient homes | Builder credit up to $2000 | Financial assistance & expertise to construct new homes to Energy StarŪ specs |
Massachusetts State and Local Tax Incentives
State Income Tax Credit
State income tax credit of 15% or $1,000, whichever is less, of the net expenditure including installation for residential solar or wind-powered renewable energy systems. More Information
State Sales Tax Exemption
State sales tax exemption on sale of equipment directly relating to any solar, wind, or heat pump system used as a primary or auxiliary power system for heating or supplying the energy needs of a person's principal residence. More Information
Local Property Tax Exemption
Exemption from local property tax of the value added to the property by a solar or wind-powered system for heating or otherwise supplying the energy needs of a residence, good for twenty years from the date of installation. More Information
State Income Tax Home Energy Efficiency Heating Credit
Owners of residential properties may claim a credit in the amount of the net expenditures for the purchase and installation of energy-efficient heating items in such properties. Items include: home insulation; new window installation; advanced programmable thermostats; fuel efficient furnaces, boilers, oil, gas, propane, or electric heating systems; solar domestic hot water systems; materials for insulation or sealing of a duct, attic, basement, rim joint or wall; pipe insulation for heating systems; and any energy-efficient item similarly related to heat conservation (as opposed to some other type of energy-efficient items). The maximum credit that may be claimed is the lesser of: 30% of the net expenditure for the qualifying purchases, or $600 ($1,000 for a multi-unit dwelling). More Information
State Income Tax Home Heating Fuel Deduction for Certain Taxpayers
Single persons whose adjusted gross income is $50,000 or less, and joint filers and heads of household filers whose adjusted gross income is $75,000 or less, who own or rent residential property located in Massachusetts, may claim a home heating fuel deduction up to a maximum of $800 for the cost of home heating oil, natural gas, and propane purchased between November 1, 2005 and March 31, 2006. More Information
Rebates from Electric Utilities
Rebates from electric utilities for residential solar systems are exempt from federal taxation.
Special Mortgage Provisions
Special mortgage provisions may be secured from federal HUD, Freddie Mac, and Fannie Mae for solar water heating and photovoltaic systems. Check with these lenders for details.
Automobile Tax Credits
People who buy or lease a new hybrid gas-electric car or truck are eligible for, and can receive, an income tax credit of $250 to $3,400 depending on the fuel economy and the weight of the vehicle. More Information
Installation of Energy Efficient Products
People who purchase and install specific products, such as energy-efficient windows, insulation, doors, roofs, and heating and cooling equipment in the home can receive a tax credit of up to $500 beginning in January 2006. More Information
Federal Tax Energy Credits for Homeowners
A tax credit to improve the energy efficiency of existing homes. 10% credit for buying qualified energy efficiency improvements, including: insulation systems that reduce heat loss/gain; exterior windows including skylights; exterior doors; metal roofs meeting applicable Energy StarŪ requirements. More Information
One credit equal to 30% of the qualified investment in a solar panel up to a maximum credit of $2,000, and another equivalent credit for investing in a solar water heating system. No part of either system can be used to heat a pool or hot tub. More Information
A 30% tax credit for the purchase of qualified fuel cell power plants, not to exceed $500 for each .5 kilowatt of capacity. More Information
Federal Tax Energy Credit to Home Builders
An eligible contractor who constructs a qualified new energy efficient home may qualify for a credit of up to $2,000. Manufactured homes can also qualify for the credit by meeting Energy StarŪ standards. More Information
National Grid / Energy StarŪ Programs (for zip code 01451)
Home Energy Assessments
Homeowners may be eligible for a no-cost home energy assessment. An energy expert will look at your home from roof to basement and identify where energy efficiency improvements can be made. Learn how to reduce energy costs, improve your home's performance, create a healthier living environment. You could receive a 50% rebate up to $1,500 to complete recommended energy efficiency improvements. More Information
National Grid 0% Loan Program
National Grid is offering 0% financing up to $15,000 for customers that qualify and make recommended energy upgrades. Eligible measures include: attic, wall and basement insulation; high efficiency heating systems and water heaters; Energy StarŪ replacement windows; duct sealing and duct insulation. More Information
Energy StarŪ Homes
National Grid provides financial assistance and expertise for builders to construct new homes to Energy StarŪ specifications which are nationally recognized for greater value, lower operating costs, increased durability, comfort and safety. More Information
Appliance Management Program
This program helps reduce energy costs for low income customers with electricity bills averaging more than $30 per month. An Energy manager from your local Community Action agency will provide an appliance analysis which indicates how much each appliance costs to operate and how much you might save. You may also qualify for other items including: Energy StarŪ refrigerators and lighting; water saving measures; insulation and air sealing measures. More Information
Residential Lighting
Purchase energy efficient bulbs at a discount price. These bulbs consume an average of 70% less energy and last up to 13 times longer than traditional light bulbs. More Information