Last updated: December2024
Written by
Jamie Smith
Solar customers in Connecticut can save over $7,000 on their installation through the excellent solar rebates and state-wide solar incentives currently available.
Connecticut is a great state to invest in solar power. In fact, it landed a spot on our list of the top 10 states for home solar. Connecticut recently received millions in funding from President Joe Biden’s ‘Solar For All’ initiative, which will help establish and expand low-income solar programs.
Incentive | Estimated average annual savings | Eligibility | About |
|---|---|---|---|
Federal solar tax credit | $6,300 | All tax-paying U.S. citizens | Tax credit equal to 30% of installation costs, applied to federal income taxes |
Residential Renewable Energy Solutions (RRES) | Savings vary | Customers of participating Connecticut utilities with a solar system size of 25 kW or less | Connecticut homeowners can sell solar energy back to their utility in the form of a solar buyback program |
Energy Storage Solutions (ESS) | $3,375 upfront, $5,000+ over 10 years | Customers of participating Connecticut utilities that own battery storage | Customers with battery storage receive up-front and performance-based incentives for participating |
Connecticut sales tax exemptions | $1,089 | All tax-paying Connecticut citizens | Customers who install solar are exempt from paying sales tax for their purchase |
Connecticut property tax exemption | $570, depending on system and property value | All tax-paying Connecticut Citizens | Customers who install solar are exempt from paying any additional property tax on their homes |
Quick Facts
Value: 30% of solar installation costs
Frequency: One-time tax credit, rollover for five years
How to apply: File IRS Form 5695 with an annual tax return
Connecticut homeowners who go solar can save 30% on their solar installation through the federal solar tax credit. The credit is equal to 30% of the costs of a solar installation and is applied to federal income tax liabilities.
The average solar energy system in Connecticut will earn a federal solar tax credit of $6,300. However, it’s important to know this isn’t an upfront payment. With the way the tax credit works, you see the 30% savings as a deduction to your income tax liability, and you won’t see the benefits of the tax credit until you file your taxes for the year.
If your liability is equal to less than the value of the federal solar investment tax credit (ITC), it will be reduced to $0, and the remaining credit value will be applied to next year’s taxes. The credit can roll over for five years without an income limit.
Quick Facts:
Electric rates average $0.27 cents per kWh in Connecticut
Buy-All tariff purchases all of the solar energy you produce for around $0.30 per kWh for 20 years.
Netting tariff purchases excess energy sent to the grid equal to the full retail rate of electricity.
Connecticut solar owners save money on their electricity bills through the state’s 2022 Residential Renewable Energy Solutions (RRES) program. There are two solar tariff options for Connecticut homeowners:
Buy-all tariff: The utility company purchases all of the solar energy your solar panels produce at a fixed rate for 20 years. Buy-all rates vary by utility but are around $0.30 per kWh.
Netting tariff: Your home first uses solar energy, and excess energy is sent to the grid. The excess energy is applied as a credit to your bill equal to the full retail rate of electricity. An additional incentive for renewable energy credits can be added, but the rate is currently $0.00 per kWh. You may qualify for income-based incentive adders.
These plans operate slightly differently than traditional net metering but can still provide great electric bill savings. Homeowners can generally see the best savings through the netting tariff, as all solar energy is valued at full price.
But what works best depends on your exact circumstances and the utility rates available. Read our complete guide to Conneticut’s net metering and solar buyback programs for more information.
Quick Facts:
Value: 100% exempt from sales taxes
Frequency: Once at the time of purchase
How to apply: Fill out a tax exemption form from the Connecticut Department of Revenue Services.
Like many other states in the U.S., Connecticut offers homeowners a sales tax exemption for solar installations. This means that Connecticut residents can save the state’s 6.35% sales tax on their solar purchases. For example, if you paid $18,000 for your solar system, you’re saving $1,143 outright.
Quick Facts:
Value: 100% property tax exemption
Frequency: Annually
How to apply: File a claim with the board of assessors before the first day of November in the applicable year.
If your solar installation raises the value of your home, that’s good news! The bad news is that it can also raise your property taxes. Luckily, a property tax exemption for solar in Connecticut prevents this from happening, saving homeowners even more money.
Experts at SolarReviews have found that homes with solar sell for 6.8% more on average. Considering the median home value and the state’s average 1.96% property tax rate, the average Connecticut homeowner can save roughly $570 thanks to the solar property tax exemption.
The average cost of a solar system in Connecticut is $2.86 per watt installed, or $20,020 for an average 7 kW system. Once you factor in the federal solar tax credit, that amount falls to $14,014.
Federal tax credit: $20,020 x 30% = $6,006
Total savings: $6,006
Effective system cost: $20,020 - $6,006 = $14,014
These savings don’t include the electric bill savings from Connecticut’s solar buyback program. If you install battery storage, you can get additional savings of between $3,375 and $15,750 on your system through the state’s Energy Storage Solutions program, which also offers bi-annual performance-based payments for 10 years!
The total cost of a solar panel installation will depend on a few factors, like how many solar panels you install, the solar company used, and the characteristics of your roof.
How do solar incentives and rebates impact each other? Customers who enroll in the Energy Storage Solutions program must deduct the upfront incentive amount they receive from their battery installation before filing for the federal tax credit to receive the correct amount. We recommend consulting with a tax professional before filing for more information.
Connecticut has excellent solar incentives that make solar worthwhile – especially targeting low-income residents. Also, Connecticut has one of the highest average electricity rates in the country, making solar all the more appealing. Through lower energy costs, it can take as little as 5.5 years to pay back your solar investment in the Constitution State.
But every home is different, and your financial situation is unique. The best way to determine if solar is right for you is to speak with local solar companies and contractors. Installers in your area can quote you accurate information regarding your estimated system size based on your home’s characteristics, bill savings, and more.
Jamie is a Content Writer and researcher at SolarReviews. A recent graduate of La Salle University in Philadelphia, Jamie earned her B.S. in communications with a concentration in journalism, mass media, and public relations.
Jamie has previously worked at a marketing company where she had the opportunity to highlight and promote small bu...
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