Massachusetts electricity rates rose about 70% over the last decade, faster than any common solar escalator. But rates don't always climb, and the latest federal forecast expects them to roughly hold steady after inflation.
That's why the escalator you pick matters. A 1.99% escalator usually stays below utility rates for the life of a lease. A 2.9% or 3.5% escalator can pass them if rates slow down.
Here's how Massachusetts rates got here, where they're expected to go, how 1.99%, 2.9% and 3.5% escalators compare over 25 years, and what that means for whether solar is worth it for you.
Which electric companies in Massachusetts set your rates?
Three utility companies serve over 90% of Massachusetts homes, according to the state:
- Eversource, the largest, covering much of eastern and western Massachusetts
- National Grid, covering much of central Massachusetts and parts of the east
- Unitil, a smaller utility in north central Massachusetts
The other homes get power from one of 41 municipal light plants, run by towns like Hudson and Shrewsbury. Your electric utility delivers your power no matter what. Many homes buy the supply part from a town aggregation plan or a competitive supplier instead of the utility's basic service.
How Massachusetts electricity rates and utility bills have changed
In 2015, the average Massachusetts home paid about 18.5 cents per kWh, according to U.S. EIA figures reported by the Fall River Reporter. By 2022, the all-in price was about 26 cents. Today, bills shared with EnergySage average roughly 36 cents per kWh once supply and delivery are both counted. Overall, rates rose about 70% from 2015 to 2025, according to Third Way.
It hasn't been a straight line. Supply prices spiked in 2022 when natural gas prices jumped, then fell sharply in 2023. On August 1, 2026, they jumped again: Eversource's basic service supply rate went from 15.63 to 17.32 cents per kWh, and National Grid's fixed option went from about 15.37 to 17.19 cents, according to Boston.com.
Why Massachusetts rates are so high
- Natural gas. Gas sets much of the price on the New England grid, so gas price swings hit your bill.
- Grid upgrades. The utilities plan about $5 billion in grid modernization over five years, and that cost shows up in delivery charges over time.
- A shared regional market. Massachusetts buys power on a grid shared with the rest of New England.
Where Massachusetts utility rates are headed
Nobody knows for sure, and forecasts have been wrong before. The U.S. Energy Information Administration's 2026 outlook projects New England residential electricity prices to stay roughly flat through 2050 after adjusting for inflation, according to a summary of the forecast.
Here's why that matters. "Flat after inflation" still means your bill goes up in everyday dollars, roughly at the pace of inflation, often around 2% a year. Your solar escalator is in everyday dollars too. So if that forecast holds, an escalator above about 2% would slowly catch up to utility rates. If rates keep rising the way they did over the last decade, no common escalator would.
How 1.99%, 2.9% and 3.5% escalators compare over 25 years
Here's what a $150 monthly solar lease payment looks like at each escalator:
The gap starts small and grows fast. By year 25, the 3.5% payment is about $100 a month higher than the 1.99% payment, from the same starting point. For the details on each rate, see what a 1.99% escalator, a 2.9% escalator and a 3.5% escalator cost over the life of a lease.
Solar escalators vs. Eversource and National Grid rates, year by year
The real question is how your solar price per kWh compares with what you'd pay the utility. This table uses two utility scenarios: rates rising about 2% a year, close to the federal forecast, and about 5% a year, close to the last decade.
| Price per kWh | Utility +2%/yr | Utility +5%/yr | Solar 1.99% | Solar 2.9% | Solar 3.5% |
|---|---|---|---|---|---|
| Year 1 | 36¢ | 36¢ | 31¢ | 31¢ | 31¢ |
| Year 5 | 39¢ | 44¢ | 33¢ | 34¢ | 35¢ |
| Year 10 | 43¢ | 56¢ | 37¢ | 40¢ | 42¢ |
| Year 15 | 48¢ | 71¢ | 40¢ | 46¢ | 50¢ |
| Year 20 | 52¢ | 91¢ | 44¢ | 53¢ | 59¢ |
| Year 25 | 58¢ | 116¢ | 49¢ | 61¢ | 70¢ |
Assumes a utility rate of 36¢ per kWh today, all-in, and a solar price that starts 15% lower (about 31¢). Illustration only. Your rates will differ.
If utility rates rise 5% a year, every escalator stays well below them. If they rise 2% a year, the 1.99% escalator stays below the utility the whole time, while 2.9% passes the utility around year 20 and 3.5% around year 13. After that, those leases cost more per kWh than the utility.
See where your escalator lands
Enter your starting payment and escalator and compare every year of your contract.
Run my numbersWhich utility rate should you compare?
Use the full price per kWh on your own electric bill, supply plus delivery. Basic service rates get the headlines, but only about a quarter of Massachusetts homes are on basic service. The rest pay a town aggregation or competitive supplier rate, which can be higher or lower.
How net metering affects the comparison
Most homes with solar still get a small utility bill for fixed charges and nighttime power. Net metering helps: when your solar panels make more electricity than you use, the excess solar energy goes to the grid and your utility provider gives you net metering credits for later. Here's why you'll still have an electric bill with solar.
Is solar worth it in Massachusetts?
For most homeowners in Massachusetts, yes. Massachusetts solar has a lot going for it, and high utility rates are exactly what make solar worth it here. Homeowners who installed solar years ago have watched each kWh their panels make become more valuable as rates rose. The more you'd pay the utility, the more each kWh your solar panels make is worth.
How you pay decides how much you keep. If you buy, your cost is set up front and there's no escalator, so rising utility rates only work in your favor. If you lease, the escalator decides whether solar is worth it over the long run.
When solar is worth it with a lease
A lease can still pay off if the starting price is well below your utility rate and the escalator is low. With a 1.99% escalator, your price stays under the utility even if rates only rise about 2% a year. With 2.9% or 3.5%, you're counting on rates rising faster than the forecast.
How much do solar panels cost in Massachusetts?
Average cost of solar panels and installation
As of October 2026, the average cost of solar in Massachusetts is about $2.90 per watt for solar panels and installation, according to EnergySage. The average solar system size in the state is about 11 kW, so a typical residential solar system costs roughly $32,000 before incentives. Prices vary across systems in Massachusetts based on size, roof and equipment. An 8 kW solar system would run about $23,200.
The payback period for solar in Massachusetts averages about 7 years when you buy. That's short compared with most states, and the reason is the same high utility rates covered above.
Solar incentives in Massachusetts
Massachusetts offers several solar incentives, according to EnergySage:
- State tax credit: 15% of the system cost, up to $1,000, for a system on your primary home.
- Sales tax exemption: no sales tax on residential solar equipment.
- Property tax exemption: for 20 years, the value solar adds to your home isn't taxed.
- SMART 3.0: the Solar Massachusetts Renewable Target program makes incentive payments for the energy your system produces. The base rate in 2026 is $0.03 per kWh, and rates reset each year.
- Net metering: credits on your bill for excess solar energy.
The federal tax credit for homeowners who buy solar ended on December 31, 2025. And with a lease or PPA, the solar company usually keeps the state tax credit and SMART payments, while you get the net metering credits.
Going solar in Massachusetts: lease, PPA or buy
- Buy with cash or a loan: you get the incentives and the shortest payback, and there's no escalator.
- Lease or PPA: no upfront cost, but the company keeps most incentives, and many contracts include an escalator.
Here's whether a solar payment increase is normal or worth it.
Before you go solar: what to ask a solar installer
- What's the total cost of the solar panel system, with and without incentives?
- Is the system size based on a full year of my energy consumption?
- If I lease, what's the escalator, and what will I pay in year 10 and year 20?
- Who receives the state tax credit and SMART payments?
- Who handles repairs after the solar installation, and for how long?
Get the answers in writing before installing solar panels or signing anything.
The benefits of solar energy for Massachusetts homeowners
- Solar energy in Massachusetts lowers your electric bill and protects you from rising energy costs.
- It's clean energy and a renewable energy source, made right on your roof.
- A lower escalator, a flat payment or owning your solar panels keeps more of those savings in your pocket.
If you want to learn about solar options without the sales pitch, Mark can walk you through them.
Got a quote with an escalator?
Send it to Mark. He'll review it and find you an option with no escalator.
Mark, review my quoteFAQs About Solar Escalators and Utility Rates
How much do solar panels cost in Massachusetts?
About $2.90 per watt installed as of October 2026, according to EnergySage. The average Massachusetts system is about 11 kW, or roughly $32,000 before incentives.
Will my solar payment ever be higher than my utility rate?
It can, if your escalator rises faster than utility rates for long enough. If rates grow about 2% a year, a 2.9% escalator would pass them around year 20 and a 3.5% escalator around year 13. A 1.99% escalator would not.
Is the federal solar tax credit still available?
No. The federal tax credit for homeowners who buy solar ended at the end of 2025. Massachusetts still offers a state tax credit, plus sales and property tax exemptions.
Which electric company serves my town?
Most Massachusetts homes are served by Eversource, National Grid or Unitil. About 40 towns have their own municipal light plant instead. Your electric bill shows which one you have.
Updated October 2026. Utility companies and grid investment from the Commonwealth of Massachusetts. Rate history from U.S. EIA figures via the Fall River Reporter, Third Way and EnergySage. August 2026 basic service rates from Boston.com. Forecast from the EIA Annual Energy Outlook 2026 as summarized by the American Gas Association. Cost and incentive figures from EnergySage, and incentive amounts can change.
About Mark Featherstone
Mark has been in solar for over 12 years, working at some of the biggest solar companies in the country, before co-founding Your World Solutions. His goal is simple: help homeowners get into solar deals that actually work for them, and make sure they understand every part of it before they sign.
This article is for general informational purposes only and isn't financial, legal or tax advice. Numbers and examples are estimates for illustration. Actual payments, savings, utility rates and contract terms vary and aren't guaranteed, and rates and program rules can change over time. Review your own contract and talk with a qualified professional before making a decision.