Many cities and towns have been receiving calls from solar installation companies saying that they need to sign up by the end of this month in order to benefit from financial incentives.

This is because many solar developers rely on a state-funded rebate program intended to deploy small solar systems (less than 10 kW), or a federal grant program to develop solar projects, or both. And these program are set to expire at the end of the year.

Although the federal grant will expire, however, the federal investment tax credit of equal value will continue to be available to solar systems of all sizes until 2016.

Many smaller solar developers do not have the financial capability to take advantage of the tax credit, and this is why they are focused on projects before the end of the year. But this is not the case for larger, more well-established solar companies.

For municipalities that are considering a solar project, now is the time to start researching solar companies, looking for those that can capture all available financial incentives from state and federal programs. Municipalities should be cautious about a “rush to sign” approach, since solar energy should continue as a viable market in Massachusetts for several years to come.

Some options to incorporate solar into a municipality’s energy strategy don’t require large upfront costs. Structuring solar projects as power purchase agreements (PPAs) involves no upfront costs and provides a municipality with fixed costs over a long term. PPAs allow municipalities to host solar systems and purchase solar energy while focusing their capital and attention on other programs in their city or town.

Some municipalities choose to purchase solar systems outright. Others choose a middle ground and lease systems. Each of these alternatives has different advantages and disadvantages; purchasing requires large, immediate capital outlays, while leases aren’t tied to a solar system’s productivity.

Constellation Energy has found that its customers prefer PPAs. But each municipality should weigh various options before committing to a specific method.

For more information about solar incentives, visit the Solar Energy Industries Association website.

Constellation NewEnergy is the endorsed supplier to the MMA’s MunEnergy program. For more information, contact MunEnergy Program Manager Emily Neill at (617) 772-7513 or emily.neill [at] constellation.com. Any energy-related questions may be e-mailed to PaulBockelman [at] MMA.org.

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