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MassCEC - About Solar Electricity

Solar photovoltaics (solar PV) convert sunlight into electrical energy through an array of solar panels that connect to a building's electrical system and/or the electrical grid. Below, you’ll find an overview of the important policies and topics one should understand when thinking about installing solar PV.   Solar PV in Massachusetts Massachusetts is known as a national leader in solar energy and one of the best regulatory and incentive climates for solar energy. Since 2007, the number of solar installers in Massachusetts has grown from 50 to more than 270, and the Massachusetts solar market has enticed numerous businesses that offer innovative financing models that aim to make solar energy accessible for more people in the Commonwealth. For more information on how to find and compare installers, please see our Finding a Solar PV Installer page. For more information on solar financing models, please see the Clean Energy States Alliance Homeowner's Guide to Solar Financing.  Equipment Basics A solar PV system consists of a few pieces of equipment wired together and connected to a home’s or building's power distribution network. Components typically include: Solar PV Array:  When sunlight strikes the semiconductor material inside a solar cell, it frees electrons, which are then captured in an electric current.  This process converts sunlight directly into electricity.  The more intense the sunlight striking the cell, the greater the amount of electricity produced. Solar cells are aggregated together to form a PV panel or a module.  A solar array generally includes several modules wired together to achieve the desired system capacity or power producing capability. Inverter: Solar PV panels produce direct current (DC) power, which must be converted to alternating current (AC) power which is supplied by electric utilities in the United States. This is accomplished by an inverter. Typically, the inverter is located near where the electric service from the local utility enters the house (close to the electrical panel). In grid-connected systems, inverters are designed so that if power from the utility goes down, the PV system will shut down as well. This is an important safety precaution for utility workers, and the PV system will not restart until power has been restored to the grid. Shut-Off: Some Massachusetts utilities require an external shut off, or a disconnect, for the PV system so that the power company can shut down the system if necessary when workers are fixing the power lines. Visit energysavers.gov for detailed information on this and other clean energy technologies. Economics of Solar PV Massachusetts’ vibrant solar industry has a variety of ownership and financing options for residents and businesses looking to install solar PV in the Commonwealth. These options include direct ownership, solar leases, or power purchase agreement (PPA) contracts, in which a homeowner purchases solar energy from a system located on their property. Consumers should thoroughly review any solar PV financial arrangement. Below is an overview of some of the costs and benefits one should understand before signing a contract to install solar PV. Aside from the various incentives a system may qualify for, it is important to note that the cost-benefit analysis regarding solar PV is site specific and should include an analysis of a particular site’s shading, orientation and roof pitch, as well as the solar PV equipment’s efficiency, customer's electric rates, and other factors. Upfront Costs and Incentives Purchasing a solar PV system generally requires upfront installation and equipment costs, but there are significant benefits that are realized over time. Upfront costs can be offset by the following:  Federal Tax Credit – A 30% federal Investment Tax Credit (ITC) for qualified residential and commercial projects Massachusetts Personal Income Tax Credit – The lesser of 15% of the total cost of the PV system or $1,000, for qualified clean energy projects Modified Accelerated Cost Recovery System (MACRS) - Accelerated depreciation is available for eligible commercial projects For more information on incentives that are offered for clean energy projects, please visit MassCEC’s Financing Clean Energy Projects page, or the Database of State Incentives for Renewables and Efficiency (DSIRE). Long Term Costs and Incentives Solar PV system owners will also realize long term economic benefits such as: Avoided Electricity Costs: Solar PV owners can utilize the electricity produced by their system to directly offset their electricity load. Solar Renewable Energy Certificates: Solar PV owners can generate income from the sale of Solar Renewable Energy Certificates (SRECs), which are the positive environmental attribute of the clean energy produced by a solar PV system. These are tradable certificates based on the production from your solar PV system. The Massachusetts Department of Energy Resources (DOER) qualifies eligible solar projects, allowing the owner to begin selling their generated SRECs in the market. This creates a way to obtain long-term financing for your solar PV system.  For more information, visit DOER's About the RPS Solar Carve-Out II Program web page or the RPS Solar Carve-Out II Program Overview. Net Metering: Net metering is a state regulation that allows customers generating their own electricity to be credited at nearly the retail rate for the energy they generate but do not use. A customer’s electric meter will run backward whenever the home or building is producing more solar power than is being consumed, and their utility account gets net metering credits for net excess generation at the end of the monthly billing period. For more information on net metering and interconnection, please visit DOER's Massachusetts DG and Interconnection web site. As is the case with any appliance, solar PV systems require some maintenance over their lifetime. This generally includes making sure the solar panels are clean, ensuring the panels are receiving unobstructed sunlight, and replacing the inverter generally once during the life of the solar PV project, which should be between 20 to 25 years. Installers should provide a minimum five-year labor warranty to protect your equipment against defective workmanship, PV component breakdown, or significant degradation in electrical output. In addition, the solar PV equipment should have appropriate manufacturer’s warranties.