Connecticut - Energy tax credit, solar rebates and incentives
Connecticut Renewable and Solar Energy Incentives
Property Tax Exemption for Renewable Energy Systems (Residential/Commercial)
- The state of Connecticut offers property tax exemptions for renewable energy installations. Qualified technologies include wind, solar, biomass, methane gas, hydroelectric, fuel cells and geothermal.
Use and Sales Tax Exemption for Solar and Geothermal Systems (Residential/Commercial)
- Installation and equipment costs linked to a renewable energy system are 100% exempt of use and sales tax.
- Exemption benefits do not expire.
Energy Conservation Loan – Connecticut Housing Investment Fund, Inc. (CHIF) (Residential)
- Loans are offered to residential customers to help pay for installation and equipment costs for renewable energy systems.
- Families who seek a loan must meet the criteria regarding location and family size.
- The amount of loan quantities range from $400 to $25,000.
- Interest is dependent upon a family’s income and size.
- Loans must be repaid within 10 years.
Solar Photovoltaic Rebate Program – Connecticut Clean Energy Fund (CCEF) (Residential)
- The CCEF offers homeowners who are customers of United Illuminating Co. or Connecticut Light and Power with PV installations connected to the grid.
- Rebate awards start at $1.75/kW for the first 5 kW and move to $1.25/kW for remaining kilowatts (up to additional 5 kW).
- A modification of payment schedule may be possible, however it depends on anticipated system efficiency.
- The capacity for PV system size is 10 kW for this program and installation and inverters must have a warranty of at least 5 years. Photovoltaic systems must have a warranty of at least 20 years.
- Incentives are capped at $15,000 for residences.
Geothermal Rebate Program – Connecticut Clean Energy Fund (CCEF) (Residential/Commercial)
The Connecticut Clean Energy Fund is offering an incentive for homeowners and commercial businesses that install geothermal heat pumps on their property.
This program is concomitant with pre-existing rebate programs administered by Connecticut Light and Power and United Illuminating Co.
Under this program, rebate amounts are as follows:
- Residential - $1,200/ton of cooling capacity for new residencies, $2,000/ton of cooling capacity for older residencies.
- Commercial - $1,200/ton of cooling capacity for profit-oriented organizations, $2,000/ton of cooling capacity for non-profit organizations.
- Residential – 6 tons of cooling capacity per household
- Commercial – 100 tons of cooling capacity per building
- Schools – 150 tons of cooling capacity per building
Heat pumps are required to have a closed-loop circulation design and must be rated by Energy Star.
Systems must accommodate at least half of the overall heating capacity of the building.
Geothermal systems must be emplaced by either IGSHPA affiliated installers or GeoExchange-certified installers.
Solar Thermal Incentive Program – Connecticut Clean Energy Fund (Residential/Commercial)
Connecticut offers homeowners and commercial businesses that install solar thermal heating systems on their property a substantial rebate to help pay for equipment and installation costs.
- Residential and commercial buildings are granted $500/MMBtu during the winter months (October – March). Non-profit organizations will receive $900/MMBtu throughout the winter months.
- Rebate awards are capped at $4,800 for residencies housing 5-6 individuals, $3,600 for residencies housing 3-4 individuals and $2,400 for residencies housing 1-2 individuals. Awards for commercial buildings are capped at $50,000 and non-profit organizations are capped at $82,500.
- Solar thermal units must accommodate for 50% to 80% of a building’s yearly hot water heating consumption.
- Systems must be rated by the SRCC or a private testing firm.
CT Solar Lease (Residential)
- Residential customers may lease a PV system with fixed monthly payments for up to 20 years.
- Residential customers who lease a photovoltaic system maintain responsibility for upkeep and repair costs during the 20-year period.
- Energy produced by PV systems that are leased lowers the resident customer’s monthly electric bill.
- At the end of the 15th leased year, customers may either lengthen the lease for another 5 years, buy the system at a reduced price or have it removed at the leaser’s expense.
Net Metering (Residential/Commercial)
- For customers of United Illuminating Co. or Connecticut Light and Power, net metering is offered if systems adhere to “Class I” specifications. System size is capped at 2 MW.
- If there is net surplus electricity generated by a system during a monthly billing period, it is transferred over to the subsequent month in the form of credit.
Federal Tax Credit (Residential/Commercial)
- Taxpayers are granted a personal tax credit of 30% of the total expenses, which include installation of residential solar-electric systems, solar thermal systems, fuel cells and labor expenses. Residential wind energy installations and geothermal pumps are also subject to a tax exemption.
- Systems installed after 2008 have no limit to the tax credit.
- If there is excess federal tax credit, it may be carried over to the subsequent taxable year only if it surpasses tax liability.
- This may continue on through consecutive years until 2016, under which unused credit may or may not be expunged.
Federal Energy Conservation Subsidy Exclusion (Residential)
- Public utilities provide residential purchasers with an exemption of 100% of energy conservation subsidies.
- The overall worth of an installation or renewable utility regardless of the energy conservation capacity, will be excluded from the buyer’s gross income.
- Customers who participate in a utility company’s energy conservation program may be given a reduced rate of electricity utilized or a nonrefundable credit of the price of electricity on the customer’s monthly electric bill.
Energy-Efficient Mortgages (Residential)
- With this federal loan program, homeowners may utilize energy-efficient mortgages (EEM) to either supplement or completely fund renewable energy systems.
Example: 4KW System – Residential Installation Cost
Average Electric Bill: $250/mo
Projected Annual Bill Escalation: 5%
Cost Per Watt: $6.50
- Estimated System Cost: $26,000
- Federal Tax Credit: $5,795
- State/Utility Rebate: $6,684
- Net Cost: $13,521
- Cumulative Lifetime Savings (25 Years): $41,594
- Investment Return: 12.2%
Savings of 48% on the total cost of your solar system through incentives