Ask who receives the SMART payments
SMART payments are made directly by the utility company to the system owner, and for residential systems under 25 kW they last a fixed term of 10 years at a rate determined when the participant enrols.
Under a lease or a power purchase agreement you do not own the system. A third-party owner does, and who receives the incentive payments over that decade is set by the agreement. In Massachusetts that is a substantial amount of money, so it is worth asking about explicitly.
Ask the provider directly and in writing: who is the system owner for SMART purposes, who receives the payments, and how is that reflected in the rate I am offered. A provider who keeps the incentive may still be offering a reasonable deal, but you should be pricing it knowing that.
Ask the same about Section 48E, which survives at 30 percent and is available to third-party owners under leases and power purchase agreements. Ask what they claim and what of that value actually reaches you, and confirm with a tax advisor rather than with the sales material.
What each structure gives you and costs you
If you buy outright you own the system, it is part of the house when you sell, and you carry the maintenance and the risk. If you finance with a loan you own it on the same terms, with the debt as a separate obligation that generally has to be settled at closing.
Under a lease or power purchase agreement a buyer of your home generally has to qualify for and assume the agreement, or you buy it out. Ask in writing what a transfer involves, what a buyer must qualify for, and what a buyout would cost, before signing rather than when you list.
Compare on total cost over the full term rather than on the monthly payment. Ask about any escalation rate if the payment rises over time, what maintenance is included, what happens at the end of the agreement, and what the exit terms are.
Ask also who is responsible for maintaining and repairing the system including roof penetrations, and what happens if the provider leaves the market. Those obligations run for decades.
What the state offers either way
Massachusetts credits exported solar through net metering at or near the retail or basic service rate, and that applies regardless of how the system is financed.
Under 830 CMR 62.6.1 an owner or tenant occupying a residential property as their principal residence is allowed a credit against personal income tax equal to fifteen percent of the net expenditure for renewable energy source property, or $1,000, whichever is less, claimed on Schedule EC. How that interacts with a third-party ownership structure is a question for a tax advisor.
There is also a property tax exemption of 100 percent for 20 years for solar installations, and a sales and use tax exemption for equipment used as a primary or auxiliary energy source in a principal residence.
Confirm your SMART eligibility before comparing anything, since the programme is provided to customers of Eversource, National Grid and Unitil and customers of municipal light plants are not eligible.
Three state benefits, and the federal one that ended
Under 830 CMR 62.6.1 an owner or tenant of a residential property who occupies it as their principal residence is allowed a solar and wind energy credit against personal income tax equal to fifteen percent of the net expenditure for renewable energy source property, or $1,000, whichever is less, claimed on Schedule EC. It being available to a tenant as well as an owner is unusual and worth knowing.
Massachusetts also provides a property tax exemption of 100 percent for 20 years for solar installations, so the improvement does not raise your property tax bill the way a renovation of similar cost would.
And equipment for a solar system used as a primary or auxiliary energy source in a principal residence is exempt from sales and use tax. Check that your quote reflects that rather than assuming, and ask your municipal assessor what if anything they need for the property tax exemption at your address.
On the federal side, the 30 percent Residential Clean Energy Credit under Section 25D expired for property placed in service after December 31, 2025, so a cash or loan purchase now receives no federal credit. Section 48E survives at 30 percent for third-party owners under leases and power purchase agreements, so ask any such provider what they claim and what of that value reaches you, and confirm with a tax advisor.