There are both State and Federal credits available to you.

Richard A Muhammad
Lead Consultant
Eureka Energy Solutions Inc

There are several credits or rebates that you may help with the cost of your solar hot water heater replacement.

If you are a customer of Fitchburg Gas and Electric Light (Unitil), National Grid, NSTAR or Western Massachusetts Electric, you may be eligible for a solar hot water rebate through the Commonwealth Solar Hot Water Pilot program. Rebate values are equal to $25 per collector multiplied by the Solar Rating and Certification Corporation (SRCC) rating of the water heater installed. Rebate values are capped at 25 percent of the equipment cost or $3,500 (whatever is lesser), and rebates are funded by the Massachusetts Clean Energy Center (MassCEC). Your installer will submit all paperwork for you.

You may also be able to take advantage of the MassSAVE HEAT Loan program to help pay for your new solar water heater. The program offers a no-interest loan of up to $25,000 to residential customers of MassSAVE member utility companies (Berkshire Gas, Blackstone Gas Company, New England Gas Company, NSTAR Electric and Gas, Cape Light Compact, Unitil, Columbia Gas of Massachusetts, Western Massachusetts Electric and National Grid). Both secured and unsecured loans are available, and the terms for the loan last up to seven years. Before applying for the loan, you must have a free MassSAVE energy assessment.

Also, Massachusetts offers a state income tax credit equal to 15 percent of the equipment and installation cost (minus any federal tax credits or rebates) of the solar water heater, up to $1,000. If the credit is greater than your tax liability, the remaining credit can be used until it is exhausted over the next three years.

Finally, solar water heaters qualify for a renewable energy tax credit equal to 30 percent of the equipment and installation costs. To qualify, at least half of the energy generated must come from the sun and the system must be certified by the SRCC. Like above, any credit beyond your tax liability can be carried forward to future years.