- EMERGING INITIATIVES
- ABOUT MassCEC
How it Works and Available Incentives
How It Works
Solar electric systems, also known as solar photovoltaics or solar PV, convert sunlight into electrical energy through an array of solar panels that connect to a building's electrical system or directly to the electrical grid.
Solar electricity is often a cost-effective way for property owners, developers, and businesses to reduce their energy costs, while also reducing their environmental impact. As you consider whether solar electricity is right for your building or business, you can familiarize yourself with how the technology works.
You can also see photos of commercial solar electric systems installed in Massachusetts on MassCEC’s Flickr page.
In a grid-connected solar electric system, a building’s solar panels are connected to the local utility’s electrical grid, where electricity is either sourced from the solar electric system or provided in part or full by the utility based on whether the building requires more or less electricity than the solar electric system is creating at a given time.
Panels are made up of a series of individual solar cells that convert sunlight into direct current (DC) electricity. The higher the intensity of the sunlight striking the panels, the more electricity they produce. Once the electricity is produced, it is sent to the inverter.
The inverter is responsible for converting the DC electricity produced by the panels into alternating current (AC) electricity, which can be used in the building. Inverters include a range of technologies, from central inverters that convert the electricity from many solar panels, to microinverters that are attached to each individual panel in a system. In grid-connected systems, inverters are designed so that if power from the utility goes down, the solar electric system will shut down as well - a critical safety precaution for utility workers and public safety personnel.
The electrical panel is where electricity enters a building from either the solar panels or the utility. The electrical panel will automatically draw additional power from the utility when the solar system is unable to meet the building’s electricity demand. If the solar electric system is producing more electricity than needed, the electrical panel will send the excess electricity to the utility grid through a device called a net meter.
Energy Storage (Optional)
An energy storage system can provide short-term storage for the power produced by your solar electric system. Several on-site technologies for energy storage, most notably lead acid and lithium ion batteries, are now being offered as add-ons to a solar installation. Energy storage systems help ensure power reliability during extreme weather events or power outages and can provide opportunities for improved on-site energy management, such as shaving peak demand. Primary factors to consider when evaluating a storage system include price, capacity, voltage, and life cycle.
There are many incentives available for commercial solar installations, detailed below. Note the solar installer will generally assist customers in applying for and/or providing information on available incentives.
Federal Investment Tax Credit - A credit of up to 30 percent of qualifying project costs.
Modified Accelerated Cost Recovery System (MACRS): Business owners can depreciate solar electric systems over a five-year schedule.
Solar Renewable Energy Certificates (SRECs) - Tradeable certificates that can be sold to retail electricity suppliers who are required to meet state renewable energy targets. Please see the DOER SREC-II page for more information. Once your solar electric system is installed, we recommend checking out this guide to registering and reporting in the SREC II program. Note that the SREC-II program is being replaced, likely in 2018, with the new Solar Massachusetts Renewable Target (SMART) program. Please see the DOER SMART website and the program administrator's SMART website for more information and a downloadable calculator to estimate SMART project incentives.
Net Metering - Allows customers to receive credits on their utility bill for excess generation in any given month. The credits can then be applied during times when the system is not generating electricity. Net metering credit values depend on a number of factors including system size. Businesses can learn more about net metering from the Department of Public Utilities.