Massachusetts has a new incentive to help get more solar panels up on residents’ rooftops.
Governor Charlie Baker’s administration on Thursday started providing $30 million to a number of local banks and credit unions for the state’s new Mass Solar Loan program. The goal: To make it easier for homeowners to obtain loans to install panels and own them afterwards, rather than lease them from a big panel installer.
The money will be used by the banks in three different ways: reducing interest rates for homeowners who are borrowing money to install the panels, establishing reserve accounts to encourage loans to borrowers with lower credit scores, and reducing the principal of loans to borrowers with low and moderate incomes.
The goal is to ensure that homeowners enjoy more of the benefits of solar panel systems, such as federal and state tax credits, payments from renewable energy certificates, and savings on electricity bills. Some of those benefits are forfeited when homeowners lease a solar panel system from a company such as SolarCity Corp. and Vivint Solar Inc., two of the country’s largest installers.
All participating lenders will offer loans ranging up to $35,000, and some will offer loans up to $60,000. The participating lenders include Bank Five, First Citizens’ Credit Union, North Brookfield Savings Bank, Shrewsbury Federal Credit Union, UMassFive Credit Union, and Weymouth Bank. More are expected to join in the coming weeks.
The money for this program comes from what are known as “alternative compliance payments.” Electric utilities and suppliers are required by state law to buy a certain amount of renewable energy each year, an amount that escalates every year. The companies that fall short of the state’s goal need to make these compliance payments to the state.
Residential projects are unaffected by the state’s caps on net metering, a way that solar panel owners are reimbursed for sending their excess energy onto the region’s grid. The caps apply only to systems that are larger than what’s used by a typical homeowner. The fate of the state’s net metering system remains up in the air: Lawmakers adjourned from formal sessions for the year last month before they could reach an agreement.