Key takeaways
- An energy community is an area the federal government ties to fossil fuel jobs or coal closures. Solar built in one qualifies for a 10-percentage-point bonus on the federal clean energy investment credit, on top of the base 30%, which can mean a lower price for you.
- The bonus works for you through a lease, power purchase agreement (PPA) or prepaid PPA, where it can mean a lower payment, rate or prepaid price. If you buy your system, your incentives come from state programs instead.
- In 2026, Worcester, Berkshire, Franklin, Barnstable, Dukes, Nantucket and Hampden counties qualify in Massachusetts, New Haven and Windham in Connecticut, and much of Pennsylvania and southern New Jersey. Rhode Island has no qualifying areas.
- New leases and PPAs face a deadline: systems that began construction after July 4, 2026 must be in service by December 31, 2027 to qualify for the credit and its bonus.
What is an energy community?
An energy community is a place the federal government has identified as economically tied to fossil fuels. The idea, written into the 2022 Inflation Reduction Act, is to steer new clean energy investment toward the areas most exposed to coal, oil and gas job losses. Clean energy projects built there can earn a larger federal tax credit.
A location qualifies in one of three ways:
- Statistical area. A metropolitan or rural county grouping where at least 0.17% of jobs have been in fossil fuels at some point since 2010 and where unemployment last year was at or above the national average. This list is updated every year.
- Coal closure. A census tract where a coal mine closed after 1999 or a coal-fired power plant unit retired after 2009, plus every tract that touches it.
- Brownfield. A specific contaminated or formerly industrial site. These qualify one property at a time, so they rarely matter for a home.
Why does it matter for solar?
The clean energy investment credit for businesses (Section 48E of the tax code) starts at 30% of a solar system's cost. A system located in an energy community earns a 10-percentage-point bonus, raising the credit to 40%. For systems under one megawatt, which includes every home system, the full 10 points applies. A separate 10-point bonus exists for systems built with enough U.S.-made content.
On a home system, that bonus is real money. On a $30,000 sample system, ten extra percentage points is $3,000 of additional federal credit, value that can come back to you as a lower price.
How does the energy community bonus help you?
It lowers what you pay for a lease, PPA or prepaid PPA. Those are the options where the bonus applies, so they decide what your result from our ZIP code lookup means for you.
| How you get solar | Does the bonus apply? | Your benefit |
|---|---|---|
| Lease | Yes | Can lower your monthly payment |
| Power purchase agreement (PPA) | Yes | Can lower your rate per kWh |
| Prepaid PPA | Yes | Can lower your one-time price |
| Cash purchase | No | State programs such as SMART 3.0 apply instead |
| Solar loan | No | State programs such as SMART 3.0 apply instead |
With a lease or PPA, the system qualifies for the commercial credit, bonus included, and that value often comes back to you as a lower monthly payment or a lower price per kilowatt-hour. Ask how it's reflected in your quote. Buying works differently: the residential credit (Section 25D) never had an energy community bonus and covered installations completed by December 31, 2025, so owners rely on state programs instead.
That is why the energy community question belongs in any comparison of ownership options. Our guide to paying for solar in 2026 walks through how each option works and which incentives it unlocks.
Which areas qualify in 2026?
The current lists come from IRS Notice 2026-39, released June 10, 2026. They apply until the next update, expected in June 2027. Here is how they land in the states Evergreen Solar serves.
| State | Whole counties (statistical area) | Coal-closure tracts in |
|---|---|---|
| Massachusetts | Barnstable, Berkshire, Dukes, Franklin, Nantucket, Worcester; Hampden (newer groupings) | Parts of Bristol, Essex, Hampden and Hampshire |
| Rhode Island | None | None on land |
| Connecticut | New Haven, Windham | Parts of Fairfield and New London |
| New Jersey | Atlantic, Burlington, Camden, Gloucester, Salem; Cape May (newer groupings) | Parts of Atlantic, Burlington, Cape May, Gloucester, Mercer, Salem and Warren |
| Pennsylvania | 47 counties, including Philadelphia, Bucks, Chester, Delaware and Montgomery | Hundreds of tracts, mostly in the west and coal regions |
Two notes on the table. "Newer groupings" means a county qualifies under the 2020-census version of the metropolitan area boundaries, which the Treasury began publishing alongside the older version in 2025. A county that qualifies under either version is eligible. And coal-closure tracts cover only part of a county, often the neighborhoods around a former power plant, so a county listed in the last column does not qualify as a whole.
What about Greater Boston and Rhode Island?
Suffolk, Middlesex, Norfolk and Plymouth counties are not on the 2026 list, and Rhode Island has no qualifying areas. The statistical-area list depends on last year's unemployment rate, so this can change in June 2027.
What deadlines apply to leases and PPAs?
The 2025 federal budget law put an end date on the commercial solar credit. Solar projects that began construction on or before July 4, 2026 keep the old, longer timeline. Projects that began construction after that date must be placed in service, meaning installed and operating, by December 31, 2027. A system that misses the date gets no federal credit at all, base or bonus.
July 4, 2026 has passed. For most new leases and PPAs signed today, that makes December 31, 2027 the date that matters, unless the solar company set aside qualifying equipment before the cutoff. If you are comparing leases or PPAs, ask each company how its pricing depends on meeting that date. For the full list of federal and state programs and their deadlines, see the 2026 solar incentive landscape.
How do you check if your home is in an energy community?
Start with the Evergreen Solar energy community lookup. Enter your ZIP code and it checks the census tracts inside that ZIP against both current Treasury lists. You get one of three answers: yes, no, or part of the ZIP qualifies. ZIP codes don't follow county or tract lines, so a partial answer means your exact address decides.
A ZIP lookup is a first answer, not a tax determination. The company that owns the system confirms eligibility from the exact address when it designs and finances the project. If you are in Massachusetts, a home system can also earn the state's SMART 3.0 incentive, which has nothing to do with energy communities. It is paid to whoever owns the system, so you receive it directly when you buy.
Frequently asked questions
Can I claim the energy community bonus on my own tax return?
You don't need to. The bonus is part of the commercial clean energy investment credit, so with a lease, PPA or prepaid PPA its value comes to you through a lower price, with nothing to file. The company that owns the system handles the credit. If you buy a system yourself, state programs such as SMART 3.0 and the Massachusetts state tax credit are the incentives that apply.
Is all of Massachusetts an energy community?
No. For 2026, the counties that qualify under the statistical-area test are Barnstable, Berkshire, Dukes, Franklin, Nantucket and Worcester, plus Hampden under the newer county groupings. Parts of Bristol, Essex, Hampden and Hampshire counties also qualify through specific coal-closure census tracts. Boston, Middlesex, Norfolk and Plymouth counties do not qualify under the current list.
Will my area still qualify next year?
The statistical-area list changes every year when the Treasury Department publishes new unemployment data, usually in June. The coal-closure list only grows. A solar project generally keeps the energy community status it had when its construction began, so the list in effect at that point is the one that counts.
Does an energy community lower my lease or PPA price?
It often does. The bonus raises the federal credit your system qualifies for, and that extra value can show up as a lower payment or rate. Ask any company quoting you a lease or PPA whether your address qualifies and how that is reflected in the rate, then compare offers on the total cost over the contract.
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How we wrote this
This page was written by the Evergreen Solar team, which designs and installs home solar across Massachusetts, Rhode Island, Connecticut, New Jersey and Pennsylvania. Program rules and rates change, so we check every figure against the primary source listed below and note the date we last did. If something has changed, tell us at our contact page.
Sources
- U.S. Treasury: energy communities data sets (Notice 2026-39 appendices, June 10, 2026)
- IRS: guidance for energy communities and the bonus credit
- IRS FS-2025-05: changes to the residential clean energy credit (August 21, 2025)
- Eide Bailly: energy credits under the One Big Beautiful Bill Act
- Troutman Pepper: Treasury and IRS release updated energy community guidance for 2026