Federal and state subsidies for renewable energy systems have been in effect for many years. Thanks to the recently extended Residential Renewable Energy Income Tax Credit, these credits will be available until December 2016!

The federal credit is for 30% of qualified expenditures for solar electric (photovoltaic) systems and solar hot water heating systems. It also applies to fuel cell technology and small wind power systems of $500 per half kilowatt, and geothermal heating and cooling systems of up to $2000 cost.

The Commonwealth of MA also allows tax credits for renewable energy systems. The MA Residential Renewable Energy Income Tax Credit provides a tax deduction of 15% of the cost of renewable systems up to $1000. Any excess that is greater than your tax liability can be carried forward three years. The tax credit applies to solar hot water, solar space heating, and wind energy systems.

In addition to tax credits, the Commonwealth of MA offers rebates for renewable energy systems through the Massachusetts Technology Collaborative. The MTC allows rebates for grid-tied photovoltaic, small hydroelectric, wind projects and small hydroelectric projects. For grid-tied photovoltaic systems, a base incentive of one dollar per unit for the first five kilowatts is allowed. Additional incentives called “adders” are allowed for equipment manufactured in MA of $0.15 per watt. Moderate home values can add $2 per watt and moderate income can add $1.25 per watt.

Rebates for small hydroelectric projects of $2 to $6 per watt are allowed up to $50,000. Wind projects can receive rebates of $2.25 per watt while microhydro- projects can receive $4 per watt. More specific details are provided at masstech.org

In addition to subsidies provided by the MA Technology Collaborative, loans can be obtained for geothermal heating and cooling systems and solar hot water systems through the MASS SAVE HEAT LOAN program. The heat loan program provides loans of up to $10,000 with interest rate as low as zero for up to seven years.

The combination of tax credits, subsidies, and loans can put the cost of renewable energy systems well within reach for most homeowners. These subsidies can cut the cost of most renewable systems in half.