Why choose solar?
There can be several benefits associated with going solar. Many customers seek to go solar to reduce their total energy costs or to help the environment.
What are my solar options in Massachusetts?
There are three main solar options in the Commonwealth—direct ownership, third-party ownership, and community shared solar. Below is an introduction to each type of product.
Direct ownership is where a customer pays an installer up-front, through cash or loan, to install a solar energy system on the customer’s property. This option requires upfront cash or a loan and a quality roof with appropriate solar access. With direct ownership, the customer owns, operates, and is typically responsible for maintaining the system. The customer also typically retains sole ownership over the energy, environmental incentives, and tax credits that the customer’s system generates.
Third-party ownership is where a third-party installs, owns, operates, and maintains the system on a customer’s home or business. Third-party ownership can be a good option for customers who are unable to pay up front for a solar energy system. There are two types of third-party ownership: solar leases and power purchase agreements (PPAs). With a solar lease, the customer makes a monthly payment to the solar company for the right to use the electricity or credits that the system generates at no extra cost. With a PPA, the customer purchases the electricity that the system produces at an agreed upon price that usually increases over the term of the contract. Although there are typically no up-front costs for system installation under solar leases or a PPA, obligations under these contracts can last a very long time—some last twenty years or more. The third-party owner retains the rights to any environmental attributes and tax credits.
Community shared solar is an option for customers who want to take advantage of and support solar energy without installing solar panels on their roofs. Community shared solar customers can include customers who rent or whose roofs or property cannot host a solar energy system. With community shared solar, residents can subscribe to a share of a large solar energy system. In return for paying a fee for the subscription to the solar system, customers receive net metering or solar credits to reduce their utility bills. Community shared solar allows multiple residents and homes to share in the benefits of a single large solar system.
Which solar option is right for me?
There are pros and cons of each option. It is essential to research your options, understand the products, and find a reputable solar company before selecting a solar product. While not inclusive of all information you should consider, the chart below provides key information about each option to help get you started:
|Direct Ownership||Power Purchase Agreement (PPA)||Lease||Community Shared Solar (CSS)|
|Location of System||Rooftop of residence or business||Rooftop of residence or business||Rooftop of residence or business||Large off-site solar system|
|Ownership, Operation & Maintenance of System||Customer owns the solar energy system||Typically, the solar company owns, operates, and maintains the system||Typically, the solar company owns, operates, and maintains the system||Solar company owns, operates, and maintains the system|
|How it Works||Customer uses the electricity the system produces and can sell excess energy back to the utility||Customer purchases the electricity or credits generated by the system at an agreed-upon per-kWh price that typically increases over the course of the contract||Customer pays a pre-determined monthly fee and receives electricity or credits generated by the system at no extra cost||Customer subscribes to the CSS site and receives credits on their utility bill for the energy produced by their subscribed allocation of the CSS|
|Recipient of Tax Benefits and State Environmental Incentives*||The homeowner or building owner||Third-party owner typically receives any tax benefits and incentives||Third-party owner typically receives any tax benefits and incentives||
Third-party owner receives tax benefits and incentives. Customer receives credits towards their utility bill.
|Payment Structure & Term||
Upfront: Cash or home equity or other loan
Ongoing: Loan payments, if applicable, maintenance costs.
Upfront: There are low or no upfront costs
Ongoing: Fixed or escalating rate to buy power generated by the system for the term of the lease (typically 15-20 years)
Upfront: There are low or no upfront costs
Ongoing: Monthly lease payment, often an escalating payment structure for the term of the lease (typically 15-20 years).
Upfront: There is not an upfront cost
Ongoing: Monthly fixed subscription payment for the contract term (up to 15-20 years). May be able to cancel with a fee or required to find replacement customer.
*Federal /State Tax Credits, RPS/SREC credits, MA SMART Incentive Payments, and Net Metering Credits.
No matter which product you choose, make sure that you find a reputable company and review all of the contract terms, conditions, and any and all fees before you sign. When the AGO receives complaints from Massachusetts consumers regarding solar products, they often come from consumers who feel that they did not get what they signed up for. Moreover, as noted above, lease, PPA, and community shared solar contracts have obligations that can last for decades—even if you move from the residence where you originally signed up for a solar product. It cannot be overstated how important it is to review and understand a contract for any solar products before you sign.
While you should be sure to understand the entire contract, important terms include: your financial obligations and any automatic escalators on your financial obligations, length of the contract, what your responsibilities are and what happens to the system at the end of the contract, what happens if you want to move prior to the end of the contract, cancellation fees, operations and maintenance responsibility, and any and all warranties.
What do I need to understand about savings claims?
In addition to understanding your contract terms and conditions, ask questions about any savings claims by a solar company. Ask about any of the assumptions that underlie any savings claims such as estimates about future utility rates. Similarly, be sure that savings claims take into account your entire energy bill—that means your utility bill and any payments that you are required to make for a particular solar product under your contract.
If you are on your utility’s low-income discount rate, make sure that any savings estimates account for your utility’s low-income discount rate. Any customer savings from participating in solar should be viewed in comparison to a customer’s bill after the low-income discount is applied to the whole bill. If you are not sure whether you are on your utility’s low-income discount rate (or if you qualify), contact your utility company or look at your bill to see if you are on the R2/R4 rate.
Will my utility try to sell me solar products?
No. Do not respond to any salespersons claiming that they are affiliated with or employed by your utility company. If a salesperson contacts you about a solar product, this person most likely works for a solar or marketing/sales company. At this time, no electric utility can offer solar products to customers, although this may change in late 2022.
Is there a "government program" for solar?
No. Solar companies cannot claim to be offering services as part of a “government program.” While the state Department of Energy Resources does qualify projects for payment of credits by the electric companies, there are no government funded or sponsored solar program currently available.
How should I respond to aggressive sales tactics?
Be on the lookout for aggressive door-to-door or other sales tactics. Do not allow a salesperson to pressure you into signing up for a solar product. If a solar company’s sales agent refuses to take “no” for an answer or refuses to leave your home, contact local law enforcement authorities.
What do I do if my system maintenance provider is unavailable or goes out of business?
Solar facilities require maintenance during their lifetime for a variety of reasons and your panel installer should identify for you the company available for necessary maintenance, regardless of whether you own or lease your system. When a company goes out of business or is sold, customers should consult any contracts and warranties provided at installation for required maintenance steps. If there are no successor companies listed, customers should seek out another service provider or file a complaint with the Attorney General’s Office.