Connecticut has become one of the leading states for solar energy in recent years. Abundant sunshine, high electricity rates, and state policy incentives have made going solar an attractive option for many homeowners and businesses. One of the most common questions from solar shoppers is whether the state offers a tax credit or other incentives like neighboring states. Here is an overview of the Connecticut solar incentives available.
Connecticut Solar Rebate Program
As we broaden our horizon to explore Connecticut solar incentives, it is worth noting the substantial benefits offered by the Connecticut Solar Rebate Program. This initiative, spearheaded by the Connecticut Green Bank, aims to make solar installations more affordable for residential and non-residential entities.
- Rebates are based on system size and cover 10-20% of the total installed costs of a solar array.
- For a typical 5 kW residential system, homeowners can qualify for a rebate of around $2,500.
- Non-residential solar projects up to 250 kW are also eligible for tiered production-based incentives.
- The CT solar rebate typically covers 10-15% of total system costs.
Federal Solar Tax Credit
While exploring the financial avenues available to mitigate the costs of solar installation, it is imperative to highlight the federal solar tax credit, a significant incentive available to homeowners. Despite the absence of a state tax credit for Connecticut solar incentives, the Federal Investment Tax Credit (ITC) is a lucrative option, offering substantial tax deductions on solar installations.
- This federal solar tax credit allows you to deduct 26% of installed costs from your federal taxes in 2023.
- A $15,000 solar system would mean a tax credit of $3,900.
- It can be carried forward if the credit exceeds your tax liability for a given year.
- This federal solar tax credit will decrease to 22% in 2034 and 10% in 2035 before it phases out completely.
Don’t forget about the Connecticut solar incentives and policies that bolster solar energy adoption through the net metering policy. This policy, mandated by the state, ensures that solar panel owners are credited fairly for the excess energy they contribute to the grid, fostering a system of mutual benefit and encouraging sustainable energy practices.
- Connecticut requires full retail net metering credit from utilities for excess solar generation.
- This means that if your solar panels produce more electricity than your home uses during sunny hours, excess energy gets fed back to the grid.
- Your utility will then credit your account at the same rate they would charge you for that electricity consumption.
- At the end of the month, you only pay the utility for your net usage minus solar production.
Solar Renewable Energy Credits (SRECs)
Finally, in the realm of solar incentives in Connecticut, Solar Renewable Energy Credits (SRECs) hold a notable place, albeit on a smaller scale compared to other states. This voluntary program allows solar system owners to earn credits, enhancing the state’s economic viability of solar investments.
- Connecticut has a small-scale voluntary SREC program. SRECs can provide added solar incentives by earning you credits for solar production.
- However, without a binding RPS mandate, the CT SREC market lacks the scale and prices in nearby SREC markets like Massachusetts and New Jersey.
- Income from SRECs typically makes up a very small percentage (5% or less) of the total economic value of a CT solar system.
Steps to Claim CT Solar Incentives
It is crucial to follow a structured pathway to ensure that you are leveraging all the available incentives for your solar installation. Here, we outline a series of steps that can guide you in maximizing the benefits of various Connecticut solar incentives:
- Apply for the CT Green Bank Solar Rebate
Before installing your solar system, make it a point to apply for the solar rebate offered by the CT Green Bank. Doing this can significantly reduce the initial costs associated with the installation, making your solar transition more affordable.
- Claim the Federal Investment Tax Credit
After your solar system is up and running, remember to claim the Federal Investment Tax Credit on your next tax return. This initiative allows you to deduct a substantial portion of your installation costs from your federal taxes, enhancing your overall savings and reducing the financial burden of the switch to solar.
- Sign Up for Net Metering
Engage with your utility provider to sign up for net metering. This essential step ensures that you receive full credit for any excess solar energy your system generates, reducing your utility bills and allowing you to make the most of your solar installation.
- Research SREC Registration
If you are interested in further optimizing the economic returns on your solar investment, consider researching the SREC registration process. While the SREC market in Connecticut is relatively small, participating in this voluntary program can still offer additional financial benefits, albeit on a smaller scale than in other states.
Outlook for Future Programs
While Connecticut lacks a robust state tax credit like many neighbors, the CT Green Bank solar rebate combined with federal tax credits and net metering still allows homeowners to recover 30-40% of their solar equipment and installation costs. Connecticut also recently passed a new Residential Solar Incentive Program beginning in 2024 that will further support rooftop solar adoption for homes and small businesses. Reaching out to a reputable solar provider will help you take full advantage of the programs available today while staying current on any new solar incentives.