If you live in Massachusetts, you may be considering installing a residential solar panel system because, unfortunately, energy costs are only rising. As the years go on, residential home energy costs increase by as much as 3% annually. Over the years, that really adds up.
This is especially the case as the weather grows more extreme. Residents of Massachusetts are using more power for heating and air conditioning each year.
To help offset or eliminate these energy costs, installing a solar panel system is an option. That said, many people are concerned about the cost of solar panel systems. After all, they aren’t cheap. However, the price of solar panels in the US has dropped by 80% in the last decade. This alone has helped make solar power more feasible.
This article discusses the average cost of solar panels in Massachusetts. We also want to determine the payback period for these solar panels. In other words, how long will solar panels in Massachusetts take to pay for themselves?
We will determine this by analyzing various factors, including how much energy you use on average, how much you pay for it, and how much sunlight you get. We will also look at both state and federal solar incentives and rebates.
Solar Panels Costs in Massachusetts
The first step is determining how much solar panels will cost. In Massachusetts, the cost of solar panels per watt is $2.87.
This is a reasonable price, as the national average in the US is $3.00 per watt, making the cost of solar panels in Massachusetts comparatively low in terms of the national average.
Potential buyers need to keep in mind that bulk pricing applies; the larger the solar system, the less it costs per watt.
For example, a 10-kilowatt system will still cost more than a 5-kilowatt system to purchase and install. However, the larger system is the more cost-effective option on a per watt basis. Below is a list of how much it will cost for solar panels per watt based on system size. Remember that we haven’t yet factored in state or federal incentives.
- 4kW – $3.14 per watt – $12,560
- 5kW – $3.01 per watt – $15,050
- 6kW – $2.87 per watt – $17,220
- 7kW – $2.85 per watt – $19,950
- 8kW – $2.90 per watt – $23,200
- 9kW – $2.78 per watt – $25,020
- 10kW – $2.76 per watt – $27,600
The Cost of Solar Panels in Massachusetts After Federal Rebates
There are incentives to consider for anyone living in the US who wants to install solar panels. The main incentive is the ITC. or investment tax credit. This is also known as the federal solar rebate. This rebate currently sits at 26%. In other words, you are paying only 74% of the costs. So, what does the cost of solar panels look like after this 26% deduction has been applied?
- 4kW – $9,294
- 5kW – $11,137
- 6kW – $12,742.80
- 7kW – $14,763
- 8kW – $17,182.80
- 9kW – $18,514.80
- 10kW – $20,424
However, be aware that this federal solar tax credit will not last forever. It is set at 26% through the end of 2022. Then, until the end of 2023, this credit will drop to 22%.
After 2023, at this time, there is no federal plan to renew this solar rebate. However, with more and more people going solar, it would make sense for the government to do so.
That said, Massachusetts also has state incentives that will further reduce the price of solar panels.
Massachusetts State Solar Incentives
As mentioned above, Massachusetts has a renewable energy income offer. This provides coverage of 15% on your solar system up to a maximum of $1,000.
This can be applied to your Massachusetts income tax. So, what does the cost of solar panels in Massachusetts look like after this tax credit has been applied? First, let’s factor that $1,000 incentive into the equation.
- 4kW – $8,294
- 5kW – $10,137
- 6kW – $11,742.80
- 7kW – $13,763
- 8kW – $16,182.80
- 9kW – $17,514.80
- 10kW – $19,424
Massachusetts Solar Tax Exemptions
It is also worth noting that Massachusetts has other solar incentives available regarding sales and property tax. For example, solar panels do not have any sales tax in Massachusetts. Moreover, the addition of solar panels to your home will raise your property tax. These are both some pretty great incentives.
Payback Period for Solar Panels in Massachusetts
So, now that we’ve determined how much solar panels in Massachusetts will cost, we can discuss the payback period. To do this, we need additional information – how much energy those solar panels will produce and much you pay on average for your electricity.
How Much Energy Solar Panels Produce – Peak Sunlight in Massachusetts
On average, a 5kW solar system will produce 20 kWh of electricity per day. This equates to 600 kWh per month. On that same note, a 10kW system will produce 40 kWh per day or 1,200 kWh monthly. However, this calculation is based on peak sunlight hours, with the standard being 4 hours.
The issue here is that, on average, you can expect to get 3 hours of peak sunlight per day around the year in Massachusetts, which needs to be factored in. This means that a 5kW system will produce only 15 kWh per day or 450 kWh per month. On the other hand, a 10kW system will produce 30 kWh per day or 900 kWh per month.
Residential Energy Costs in Massachusetts
Residents of Massachusetts use an average of 627 kWh of electricity per month. The current cost in Massachusetts is 14.91 cents per kWh. So at the end of the day, residents pay $94 per month for their electricity or $1,128 annually.
The Solar Payback Period in Massachusetts
With all this information, we can now figure out the payback period. The most common solar installation size is 5kW, so this is what our calculation is based on.
- A 5kW system in Massachusetts will produce roughly 450 kWh per month
- 450 kWh per month is 71.7% of the electricity used per month (627 kWh)
- 71.7% of $1,128 is $808.77 (annual savings). Remember that the cost of a 5 kW system is $10,137.
Based on the cost of the panels and annual savings, the payback period for a 5kW system would be 12.53 years.
The SMART Program
There is one more incentive to consider in Massachusetts, which is the SMART solar incentive. This provides customers with roughly 30 cents per kWh produced with solar panels for 10 years, a fantastic rate.
A 5kW system in MA produces 450 kWh per month. This would equate to $135 per month or $1,620 annually. This is perhaps the most important of all incentives as it will significantly reduce the payback period for your solar panels.
The payback period drops to 4.17 years when you combine the $808.77 saved on yearly energy costs and the $1,620 for energy produced. So, all things considered, a 5kW solar system in Massachusetts will take just over 4 years to pay for itself.