Connecticut Solar Rebates and Incentives

How Much Can You Save on Solar in Connecticut?

Key Details

• In 2023, Connecticut generated up to 1,161 megawatts of solar power.
• As of 2021, over 2,000 solar jobs had been created in the state.
• Installing a 6kw system in Connecticut costs approximately $15,540
• Solar energy makes up 75% of the state's renewable resources
• Connecticut provides a property tax exemption for renewable energy sources, including solar panels

Connecticut Energy Profile

Connecticut is one of the least sunny states in the US, receiving an average of about 3,500 hours of sunlight annually. As of 2023, the state had 72 solar installations generating a total of 1,161 megawatts of solar power, enough to power almost 170,000 homes.

Overall, Connecticut ranks 22nd among all US states in terms of the amount of solar energy installed. However, the state is projected to add 973 megawatts of solar power by 2030.

As of 2021, over 2,000 solar jobs had been created and filled in Connecticut.

Connecticut Solar Tax Credit and Incentives at a Glance

How Cheap or Affordable is Solar Energy in Delaware?

Connecticut has one of the higher grid electricity retail costs in the US with an average cost of 18.32 cents/kWh. The same goes for the average cost of solar panels per watt, with solar panels costing $2.86pW on average.

To install a 6kw solar energy system in Connecticut will cost $15,540. However, with the federal tax credit, homeowners will be saving up to $3,419.

Connecticut Household Profile

The total energy used in Connecticut annually is 185.3 million BTUs per capita. This ranks it at 46th among all the states in the US. The state consumes 63.7 million BTUs in residential energy per capita, which places it 32nd out of all the states. The state's commercial sector, on the other hand, ranks 37th in the US for energy use with about 47.2 million BTUs per year.

Connecticut supports 1,527,039 housing units, with 1966 serving as the average year of construction. Moreover, there are 1,397,324 inhabited dwelling units in Connecticut, of which their residents own 66.23% and 33.77% are rented out.

Energy Generation in Connecticut

According to 2022 statistics published by the US Energy Information Administration, approximately 55% of Connecticut's total net electricity generation was powered by natural gas in 2021.

The amount of natural gas-fired generation grew by more than half from a decade earlier. This is a result of 2,000 megawatts of new natural gas-fired generating units coming online.

70% of the largest power plants in the state are powered by natural gas. In 2021, nuclear power generated 38% of the state's electricity, which was the sixth-highest share of any state. Around 5% of Connecticut's net power generation in 2021 came from renewable resources at utility-scale and small-scale plants.

Majority of the state's renewable electricity was produced by solar energy, with biomass accounting for around one-third. A small portion came from wind energy, and around one-seventh came from hydroelectric sources.

Formerly, all utility-scale renewable electricity generation in Connecticut came from hydroelectric power and biomass. This changed in December 2013 when a small amount of utility-scale solar photovoltaic (PV) output came online. In 2021, small-scale, customer-sited facilities like rooftop solar panels provided three-fourths of the state's solar energy. It was projected that around 1,000 megawatts of solar power-producing capacity would be constructed by the summer of 2022.

Federal Solar Tax Credit in Connecticut

The Federal Solar Tax Credit, also known as the solar Investment Tax Credit (ITC), is a solar energy incentive aimed at growing solar energy in the US. The ITC is a 30 percent solar tax credit available to individuals who install solar power systems in their homes.

The nationwide usage of solar energy and the solar industry has grown rapidly since its inception. For instance, the U.S. solar industry has expanded by more than 200x since the ITC was implemented in 2006.

The solar industry has also had an average annual growth of 33% since its inception. It has also facilitated the generation of hundreds of thousands of jobs. The introduction of the ITC has also injected billions of dollars into the country's economy in the process.

What you Need to Know about Federal Solar Tax Credit in Connecticut

The solar tax credit is claimed against the tax liability of residential and commercial and utility investors in solar energy properties. It allows the homeowner to apply the credit to his/her personal income taxes. This credit is used when homeowners purchase solar systems and have them installed in their homes.

Businesses that install, develop, and/or finance solar projects can claim the credit. The Inflation Reduction Act, which was passed in August 2022, was one of many expansions of this important tax credit for which the Solar Energy Industry Association (SEIA) successfully lobbied.

When does Net Metering End in Connecticut

Initially, it was anticipated that the credit rate would decrease to 26% in 2022, 22% in 2023, and 0% in 2024. The Act, however, retroactively added ten years to the credit tax. In addition, by 2033, 2034, and 2035, the tax benefit will drop to 26%, 22%, and 0%, respectively.

Eligibility

To be eligible for Connecticut tax credit for solar panels, you must fulfill the following requirements.

• If your solar system is brand new or if it is being used for the first time between January 1, 2006, and December 31, 2023, you are eligible for the federal tax refund.
• Your solar energy system must be yours outright.
• Your solar energy device must be installed in the US. It could either be at your primary residence or secondary residence in the United States. It could also be at an off-site community

How do I claim the Federal Solar Tax Credit in Connecticut?

Claiming your Connecticut solar tax credit is very simple. You can complete it while filing your taxes as it only takes a few extra minutes. You can use a variety of tax preparation software to simplify your job. You can apply for the federal tax credit for solar energy in Connecticut by taking these steps:

• Visit the Internal Tax Service website and print out the IRS form 5695.
• Complete the necessary information regarding your solar energy system, your home, and your contractor.
• You have two options for filing the paperwork: either do it yourself or mail it to your accountant.

Net Energy Metering in Connecticut

Net metering has long been regarded as one of the best renewable energy incentives for solar customers, according to the Solar Energy Industries Association (SEIA). For instance, it raises the value of your solar panels, which raises the value of your house. Additionally, it allows long-term electricity savings for homeowners.

Net metering is where solar energy system owners who export any of their output to the electrical grid are compensated through a billing system. "Customer-generators" is the name given to these individuals. It makes it possible for customer-generators to even out the amount of electricity they draw from the grid over the length of a billing cycle. They cover the cost of the net energy used from the power grid.

In the event the customer-generator produces more electricity than they can consume, the extra is sent to the grid. However, if the customer-generator consumes more energy than they produce, they are still responsible for paying the standard retail rate. For extra electricity sent to the grid, the customer-generator is usually compensated on a per-kilowatt-hour (kWh) basis.

Various levels of compensation are applicable in different locations depending on the state and local laws currently in effect. In some instances, customer-generators may be compensated for surplus generation at the entire retail rate or a lower sum. In some cases, there may be no compensation.

Energy charges received and credits for energy exported by the customer-generator are netted against one another. This is carried out after the billing period. If a customer receives more electricity than they export, they will be charged for the difference.

However, if exports during a billing cycle outnumber imports, the customer-generator can typically continue the balance into upcoming cycles. This is commonly known as a rollover credit. The balance may either be carried forward indefinitely or it may expire at a specific moment.

It would be important to note that net energy metering systems are no longer as helpful in some US states. While some states completely drop the requirement, other jurisdictions implement a credit rate that is lower than the retail rate. For instance, the NEM 3.0 net metering rule, which greatly lowers the credit rate, was recently passed in California.

How to Enroll for Net Energy metering in Connecticut

Connecticut homeowners who solicit a qualified solar installer will probably be eligible for net metering. A representative will typically assist in submitting a net metering application. However, if you wish to apply on your own, you can take the following steps.

• Step 1: Ask your electricity provider if a bidirectional meter has been placed. If not, your provider is required to implement one without charging you extra.
• Step 2: Check with your electricity provider to see if net metering is a possibility.
• Step 3: Contact a reputable solar expert in your region if net energy metering is a possibility. Confirm with the salesperson that the company will manage the application process. If not, find out how by contacting your electric provider.
• Step 4: Initiate the installation process.
• Step 5: It is advised that you audit your energy expenses for a few months after installation. Do this to confirm that your system is producing points as expected.

Connecticut Property Tax Exemption

Connecticut's property tax exemption excludes solar energy systems that produce electricity for private residential use from property taxes. This exemption is available to homeowners who own solar systems that were installed on or after October 1, 2007. This includes systems that serve farms, single-family homes, or multi-family buildings with a maximum of four units.

Additionally, "any passive or active solar water or space heating system or geothermal energy resource" is exempt from paying property taxes. It also does not matter what kind of facility it services.

To qualify for the exemption, the solar facility must have been installed on or after January 1, 2014, and its nameplate capacity cannot be greater than the load for the location where the system is installed.

An application for an exemption must be submitted to the town's assessor or board of assessors. This application must be submitted no later than the first day of November during the relevant assessment year. As long as the solar energy system is not significantly altered, applications are not necessary every year. For more information, get in touch with your local tax assessor's office.

Sales and Use Tax Exemption for Solar and Geothermal Systems

In June 2007, Connecticut passed House Bill 7432 legislation establishing a sales and use tax exemption for solar and geothermal resource systems. The bill added to the roster Solar-electric systems, passive and active solar space heating systems, and passive and active solar water heating systems.

The equipment associated with eligible systems and the services associated with their installation is both covered by the sales and use the exemption. The exclusion has no time limit. Customers must provide the seller form CERT-140 when they make an eligible equipment or service purchase. On the website of the Connecticut Department of Tax Services, you can find the certification form CERT-140.

Connecticut Property-Assessed Clean Energy (PACE) Financing

Connecticut has a PACE (Property-Assessed Clean Energy) financing program. It allows homeowners to have access to affordable, long-term funding for eligible clean energy and energy efficiency improvements. The PACE financing program provides an avenue to reduce energy costs and improve the comfort of homes.