How to Combine the 30% Federal ITC With SMART for a Faster Payback
Ferrius Energy · 2026-06-10 · 5 min read
The Federal ITC and Massachusetts SMART are designed to stack. Used together, they can pull commercial payback toward the low end of the range.
Two incentives, two jobs
The 30% Federal Investment Tax Credit cuts your net cost up front, and MACRS depreciation lets you write down the asset quickly. Massachusetts SMART then pays you over time for the energy the system produces. One reduces the price, the other adds revenue.
Why stacking works
Because they operate on different mechanisms, they combine rather than cancel. The ITC and depreciation shrink the effective investment in year one, while SMART builds a predictable income stream on top of your electricity savings. That is the math behind a sub-five-year payback for many commercial systems.
Getting it right
Claiming the ITC and depreciation is a tax matter, so your CFO or accountant should be in the loop from the proposal stage. On the engineering side, the system should be designed to maximize eligible production, since that is what SMART pays for.
Key takeaway. Treat incentives as part of the design, not an afterthought. Modeling the ITC, depreciation, and SMART together is how you find the real return.