The complete list of Connecticut solar incentives and tax credits for 2023, plus how to take advantage.
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Connecticut may get a little less sun than average in the U.S., but those high electricity costs make solar a good bet for many homeowners. Going solar in Connecticut is also more affordable thanks to a state sales tax exemption, property tax exemption, and decent net metering laws. And if you install battery storage, you can sign up for extra incentives from some utilities.
Connecticut Solar Incentives
|Solar For All and Smart E-Loans||Connecticut’s Solar For All program offers low-cost solar options for low-income households. The Smart E-Loans program offers loans up to $40,000 at low interest rates.|
|State sales tax exemption||Connecticut exempts solar installations from its 6.35% sales tax|
|State property tax exemption||Connecticut offers a property tax exemption for value added by installing solar|
|Net metering||Connecticut scrapped net metering in 2021 in favor of a new system where utilities buy both energy and renewable energy certificates from homeowners with solar|
|National Grid Connected Solutions battery program and HEAT loans||National Grid solar customers who install solar battery storage systems can receive an incentive every summer based on the performance of their system. Eligible customers can also apply for a zero-interest HEAT Loan for installing solar batteries|
Connecticut grants and loans
Connecticut offers Smart-E Loans for families who want to go solar. Qualifying applicants can borrow up to $40,000 for 5-12 years, with interest rates currently set as low as 4.49-6.99%.
Connecticut also provides a Solar For All Program which helps low-income households access solar to lower energy costs and increase home affordability. The program offers a no-money-down, affordable 20-year lease and energy efficiency agreement with a savings guarantee for all homeowners, regardless of income or credit score.
State sales tax exemptions in Connecticut
Connecticut exempts home solar installations from its 6.35% sales tax. This includes solar water heat, solar space heat, solar photovoltaics, geothermal heat pumps, geothermal direct-use, and other distributed generation technologies.
With the average cost of solar in Connecticut hovering around $14,000 for a 6 kW system, this sales tax exemption could save homeowners nearly $900 upfront.
State property tax exemptions in Connecticut
Connecticut offers a property tax exemption for homeowners installing solar. The exemption helps prevent homeowners from being disincentivized from going solar because of likely increases in a property’s value and associated increases in property taxes. Research suggests that installing solar can increase a home’s value by around 4.1% on average.
Residents who want to claim the exemption in Connecticut must file a claim with the board of assessors before the first day of November in the applicable assessment year.
Net metering and SRECs in Connecticut
Connecticut used to have a strong net metering policy, but this ended in 2021. For any customers signed up to net metering prior to the change, their rates and terms are locked in until 2041. For everyone else, the replacement program sees certain utilities offering a Feed-in Tariff which is less generous than net metering.
This new Residential Renewable Energy Solutions program offers homeowners two options: Buy-all or Netting. The Buy-all option means a utility buys both the energy produced by a home’s solar array and the renewable energy certificates (RECs) generated by the array. The Netting option means the utility will purchase all RECs generated by the homeowner’s array and will provide monetary credits on the customer’s electric bill for any excess energy exported to the electric grid.
Eversource and UI both offers a Buy-all rate of $0.2943 per kWh. Under the Netting option, customers of Eversource receive retail rate for energy credits plus $0.0318 per kWh for RECs. UI customers receive just the net metering incentive, with no price set for RECs. Credits roll over month to month until the one year anniversary, at which time customers are paid out at the utilities’ avoided cost of wholesale power.
Customers are locked into their rate for 20 years. New customers can enroll through 2027, with the Buy-All and Netting rates reviewed annually for new sign-ups. Residential customers that choose the Netting option must also pay a non-bypassable charge. In 2022, this charge was set at 1.585¢ per kWh for Eversource and 1.720¢ per kWh for UI.
Both utilities also offer incentives for low-income homeowners and those living in disadvantaged communities. More information on the program is available here.
Connecticut is interesting in that it doesn’t technically have a market for solar renewable energy certificates (SRECs), even though the utilities purchase RECs from customers. This is because of the way the state structured its Renewable Portfolio Standard (RPS) in 1998. The RPS mandates that a percentage of retail electricity be renewable, and that a portion of that must come from solar, wind, and other Class 1 renewables. However, there is no specific solar carve-out, hence no SRECs. As such, selling your RECs to the utility through one of the net metering options is the only way currently to sell your RECs in Connecticut.
Utility PBIs in Connecticut
Connecticut customers served by the National Grid can take part in its Connected Solutions battery program. Customers who install solar battery storage systems can receive an incentive every summer based on the performance of their system.
Under the current rules, customers will receive an incentive of $275 per kW performed per summer. This rate is locked in for the first five summers after enrollment. The total amount of incentive will depend on your battery size, performance, configuration, internet connectivity, and other factors.
Homeowners installing solar batteries can ask their installer about the program. Some installers offer a discount on solar installation in return for the customer paying them the seasonal incentives from the Connected Solutions program.
Connected Solutions also offers eligible customers a zero-interest HEAT Loan for the equipment and labor costs associated with installing a battery storage system.
For homeowners concerned over possible drains on their batteries during the winter season, note that most Connected Solutions events occur in summer. Winter events will be cancelled if there is extreme weather, to allow customers to maintain a fully charged battery in case of outages. You can also choose to only participate in the summer event and forego winter incentives.
Final thoughts on state solar incentives in Connecticut
Connecticut is a fine place to go solar at home. A 10 kW rooftop array will meet the energy needs of most households in the state and can provide a little income from net metering and the sale of RECs. Homeowners who install solar are also eligible for the federal tax credit (at least until 2024) and can take advantage of state sales tax and property tax exemptions.
If you’re thinking of installing solar storage alongside your panels or shingles, it’s a great time to do that in Connecticut. Ask your installer about incentives for battery storage to ensure your system meets the requirements for the ConnectedSolutions program!