Connecticut’s Key Solar Incentives: A Breakdown

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Delve into Connecticut’s pioneering efforts in solar energy adoption through a comprehensive breakdown of its key incentives. From tax exemptions to financing options, Connecticut offers a range of initiatives designed to make solar power accessible and affordable for residents, businesses, and communities alike. Explore how these incentives work, who qualifies, and the impact they have on promoting renewable energy across the Nutmeg State. Whether you’re a homeowner considering solar panels or a business seeking sustainable solutions, understanding Connecticut’s solar incentives is your gateway to harnessing the benefits of clean energy.

Residential Clean Energy Credit

The Residential Clean Energy Credit, formerly known as the federal investment tax credit (ITC), offers a 30% reduction in the cost of your solar panel system. This incentive covers the entire system, including equipment, labor, permitting, and sales tax.

To claim this credit on your federal income taxes, you must purchase the system with cash or a solar loan—leasing the system makes you ineligible for the ITC.

Additionally, you must have a sufficiently high tax liability, though any unused credit can be carried over from year to year until the ITC expires at the end of 2034. The only exception is for tax-exempt entities, such as nonprofit organizations, which may be eligible for a direct payment instead of a tax credit.

Solar for All

• Project SunBridge aims to extend residential solar access to low-income and disadvantaged households statewide in Connecticut, with a primary focus on affordable housing units. This initiative seeks to enhance resilience, grid benefits, and economic opportunities by potentially reaching thousands of additional households through existing solar and storage programs, reducing CO2 emissions, and cutting energy costs. Residents will benefit from financial assistance, including increased incentives, accessible loans, and low-cost capital for solar and storage, alongside technical support for clean energy workforce development and community engagement. 

• The Community Power Coalition (CPC)’s SFA program, “Powering America Together,” will collaborate with and enhance the impact of the  US Department of Energy’s National Community Solar Partnership and Community Power Accelerator program. Led by Inclusive Prosperity Capital, Inc., CPC comprises seasoned community solar experts who have contributed to the Community Power Accelerator as developers, lenders, trainers, and technical assistance providers. The program aims to support the development of low-income community solar projects, reduce carbon emissions, lower energy costs, and promote quality jobs, community wealth-building, energy resilience, and equitable workforce development. 

• Teaming up with lead applicant  GRID Alternatives, a coalition of ten mission-driven nonprofit solar and affordable housing providers and allies has collaborated to develop the Solar Access for Nationwide Affordable Housing Program (SANAH). SANAH is meticulously crafted to maximize benefits for households and communities while advancing equity, reducing harmful pollution, and combating climate change. The program offers a multitude of advantages, including expanded access to solar and storage for income-qualified households, significant energy savings and relief from burdensome costs, as well as additional benefits like efficiency improvements and electrification. 

Sales Tax Exemption

Since 2010, Connecticut has implemented a sales tax exemption on all renewable energy equipment, encompassing solar, geothermal, and wind power systems. This exemption relieves purchasers from paying the standard 6.35% sales tax on these sustainable energy investments.

Property Tax Exemption

In addition to waiving sales tax on solar, Connecticut also allows municipalities to exempt homeowners from property tax increases that would result from a rise in home value due to installing solar. An exemption claim must be filed with the assessor or board of assessors in the town in which the property is placed on or before the first day of November in the applicable assessment year. Applications are not required each year as long as no major alterations are made to the renewable energy system. 

Smart-E Loans 

Smart-E Loans offer long-term, low-interest financing through participating lenders to help Connecticut residents make home energy improvements. Smart-E Loans are affordable, simple and quick to access. No matter what your goals are, investing in these improvements today can result in energy savings, greater comfort and environmental benefits for you and your family. The Smart-E loan can provide financing for more than 40 home improvements. 

Another advantage of opting for a Smart-E Loan is the flexibility to allocate up to 25% of it towards non-energy-related home improvements. For instance, if you require roof replacement or repairs before installing solar panels, you can utilize the loan to cover these expenses.

Energy Storage Solutions

Batteries can be your backup power source when the grid goes down to keep your lights on and essential appliances and medical devices running. When combined with a solar system, you can have more control over your home’s power supply.

Energy Storage Solutions helps lower the cost of buying a battery by providing upfront and performance incentives. This incentive program is overseen by the Public Utilities Regulatory Authority (PURA), is paid for by electric ratepayers, and is administered by the Connecticut Green Bank, Eversource, and UI. 

Connecticut Green Energy Building Solutions

The Connecticut Green Energy Building Solutions program offers incentives for energy efficiency and renewable energy improvements in buildings. It provides grants, loans, and other financial support to promote sustainable building practices. The program targets commercial, residential, and public sector projects, aiming to reduce energy consumption, lower greenhouse gas emissions, and foster green job growth within the state.

Local Option – Residential Sustainable Energy Program

The Local Option – Residential Sustainable Energy Program offers Property Assessed Clean Energy (PACE) financing to residential property owners for energy efficiency and renewable energy improvements. This includes upgrades such as solar panels, insulation, HVAC systems, and water conservation measures. The financing is repaid through property tax assessments, making it accessible for homeowners to implement sustainable energy projects. 

Disclaimer

The information provided herein is for informational purposes only and is accurate as of the time of publication. Please be aware that the solar energy landscape, including technology, regulations, incentives, and market conditions, changes frequently. Therefore, it is essential to consult with qualified experts and professionals before making any decisions regarding solar energy installations or investments. This will ensure that you receive the most current and applicable advice tailored to your specific circumstances.