Connecticut Solar Power Rebates, Tax Credits, and Incentives
Hartford Skyline
2012 Update
Connecticut, an easy drive from New York, New Jersey, Massachusetts, is the southernmost state in temperate, liberal New England. “Temperate” means we definitely have all four seasons here. Connecticut Winter and Spring seasons bring clouds. The Connecticut legislature makes maximum use of its modest solar resource with some dynamite incentives. Put together, the package of solar power incentives in Connecticut is enough to make some states in the sun belt look cloudy in comparison. Read on to see what’s lighting a fire under Connecticut’s solar future.
State Legislation
Connecticut is serious about clean energy, and has squirrelled away some dough over the years to make it happen, into the Connecticut Clean Energy Fund. Starting June of 2011, the Clean Energy Finance Authority (CEFIA) has a mandate to create 30 new megawatts of residential solar by the end of 2022.
Happy home owners can choose between a one-time solar incentive for expected performance based buy-down for their new system, or else opt for a performance based incentive over time. However, those who choose the one time incentive lose any credits they would have earned from excess energy production in the future.
Here’s why some shrewd Connecticuters have learned about future credits: the REC program is still weak. Relatively low Alternative Compliance Payments, a gift among other things to Connecticut coal, is expected to keep the value of a Connecticut REC below the $55 mark. A decent price for a REC should be in the hundreds, not $55. The long term payback option is therefore less attractive to many than the quick cash.
All in all, the Connecticut legislature makes up for the state’s cold and cloudy months with a strong and sunny encouragement for distributed PV.
Connecticut’s Renewable Portfolio Standard
Connecticut has an aggressive yet complicated renewable portfolio standard (RPS). The short version is that Connecticut utilities (both of them) must supply 23% of their power with renewable energy by January 1, 2020. None of that has to be solar, but some say 30 MW will likely be in the mix.
The longer version is how they classify renewable energy. They break it down into Class I, Class II and Class III renewable energy sources.
Class I contains our friend residential solar; mixed in with 10 other sources like wind, fuel cells, methane gas, and all kinds of ocean power. 20% out of 23% must come from Class I sources, and again that includes solar.
Class II and III stake out small percentages to guide the development of trash to energy; and combined heat and power systems, respectively.
Basically, the RPS standards that Connecticut has carved out for residential solar has been lumped together with so many substitutes that there is no driver there for residential solar.
Solar will find its way to Connecticut roof tops thanks to the State Rebate and Net Metering Laws, not the RPS, thank you very much.
Performance Payments
To meet their RPS goals, power companies can either pay you for the renewable energy credits (RECs) you generate with your solar panels, or they have the option of making “Alternative Compliance Payments” to the state. The real bummer is you cannot accept both the payments for your RECs and the rebates available for your system.
As of 2012, the Alternative Compliance Payments are too low to justify a your switch from receiving Connecticut’s solar rebate to getting payments for your RECs. The state’s two investor owned utilities, Connecticut Light and Power (CL&P) and United Illuminating Company (CL&P) will simply continue to keep paying those lower fees instead of line your wallet.
Stay tuned for any changes in the cost of those Alternative Compliance Payments. Until then, Performance Payments, though they exist, are kind of a moot point for Connecticut homeowners.
Connecticut Electricity Prices
Connecticut may be a relatively small state, but the electricity prices sure aren’t. The average retail price for electricity was 19 cents a kWh last December 2011, compared to a national average closer to 10 cents that same month.
The Northeast has a reputation for being a bit progressive. One of the two utilities, Connecticut Light and Power, is so progressive, in fact, that it is planning to raise peak pricing (mid-day) to a whopping $1.49 per kWh in 2012; a 10:1 ratio from off peak (late at night.)
Combine 19 cent prices, insanely aggressive time of day metering with some good rebates and we would expect some savvy customers to jump ship to solar! Fortunately, there is a photovoltaic life raft for you to swim out to – one Connecticut has created for itself in the last decade.
Net Metering
With net metering if you generate more power than you need, you’ll get a credit on your next bill. In Connecticut, they call each extra kWh a NEG (Net Excess Generation). Those NEGs keep rolling over into the next month until the customer uses them all. The utility must pay the customer annually for every NEG that makes its way to the end of the year.
Connecticut has fantastic Net Metering Laws. All classes of renewable energy systems get net metering, up to a gigantic 2 mega-watts installed capacity. So solar homeowners here will do just fine.
All the more complicated aspects of the net metering law only apply to:
- 1) Time of day customers
- 2) Customers with huge systems (10 kW and above)
When the net metering law was passed in 1998 and amended in 2007, this credit was applicable to time of day pricing.
Time of day pricing, which some residential customers may elect to have, charges (way) more money for electricity used during the middle of the day.
This same system works heavily in your favor if you can generate electricity in the middle of the day, when the sun is shining. It remains to be seen what the legislature and the utility does with this in 2012 when time of day prices in some parts of Connecticut climb to ten-fold their off-peak rates. We can hope that time of day pricing combined with net metering makes 2012 the year of the mega-NEG!
The law gets unnecessarily complicated for systems over 10kW. For average homeowners, your system probably won’t be that large.
The state of Connecticut has net metering overkill aimed at your every stray NEG. That’s a very GOOD thing for residential PV. For a standard home PV system, getting those benefits should be very straightforward.
Utility Rebates
Connecticut has generous solar power rebates for all the PV equipment you need, up to 10 kilowatts. They offer $2450 back for every kilowatt up to a 5 kW system. For those who want more, they offer another $1250 for the next 5 kW up to and including your 10th kilowatt. They max you out after you get $18,500 back on your equipment.
It probably makes the most sense to get the solar rebate up front if you can, instead of having performance payments over time. You lose the renewable energy credits, but those won’t be worth much, not until the state stops giving utilities a better option than purchasing REC’s from you.
The first round of funding for the rebate program has 7.5 million already available, with a total of 40 million to come.
That sums it up for the solar power rebate. Be sure to follow the steps to have your Connecticut solar installation certified, and the rest should be bankable.
Tax Exemptions
Connecticut has provided residents a way out of paying more property taxes for putting solar panels on their roofs since 1977, thanks to the property tax exemption. As long as you file a claim with the board of assessors before the first day of November in the applicable assessment year, none will be reassessing property taxes for said shiny new PV system. That’s a good thing! Also, your Connecticut solar installation is sales tax exempt! Another good thing.
Property-Assessed Clean Energy Financing
Connecticut is preparing to finance solar and other energy improvements for all homeowners through their local governments. The program is called the Property-Assesed Clean Energy (PACE) financing. The loan is repaid via a special assessment on the property. Nothing is in place yet, but it’s part of the June 2011 bill. Connecticut residents should contact their local governments to see when PACE financing will be available.
Example 5kW System Investment Return
Connecticut enjoys a very active and supportive legislature, making it a prime location for a home solar electric system:
- Installing a typical 5 kW system in Hartford would run about $25,000 (Don’t panic! This gets chopped down to size in a jiffy, just watch.)
- Take $12,250 off the top with the state solar rebate program, and we’re down to $12,750 for the same system! (Note: this move would be to opt out of performance payments over time, and to opt out of state RECs; neither of which we decided was worth forfeiting the cash. Perfect example of bird in hand worth two in the bush.)
- You also qualify for is the federal 30% solar tax credit, which chops $3825 out of the remaining $12,750.
- The first year in energy savings will be around $1112, since your 5kW system will generate about 5850 kwh per year. Vis a vis Connecticut power prices, that’s enough to cut $93 from your monthly power bill!
- At the existing rate of electricity price increases after the federal solar tax credit, we estimate it would take only 6 years for your solar panel system to pay for itself in Connecticut: a truly excellent accomplishment for a Northeastern state.
- Now your net cost after just one year is less than $8,000, down from over $25,000!!!
- What’s more, your home value would increase by 20 times your annual savings (about $20,000), and that’s a tax free increase!
To find out how the numbers work out for you, click here and we’ll connect you to experts we trust in Connecticut calculate realistic estimates for you based on your unique energy usage, location, shading, roof orientation, and roof type. They’ll even do it for free!
Consensus
Connecticut has made the right size commitment to create a solar power market. Having the funding for solar energy was no accident. Connecticut set up the CCEF in 2000 for that aim, and started putting money away, out of everyone’s utility bill, to make that possible today. The utility rebate has 7.5 million available for today’s round of funding, with a total of 40 million coming.
Although Connecticut’s legislation around solar is nearly unassailable, there is still some room for improvement. The incentives they provide residential solar customers overlap somewhat with utility scale renewable energy applications, leaving the code more complex for home owners than it needs to be.
When it comes to performance payments, Connecticut could make them more attractive by increasing the price of the REC. If utilities didn’t have sweet Alternative Payments to turn to, they would be looking to buy them from solar powered home owners every time. To the utilities’ credit, they are looking at a steep increase for time of day use, which so far they plan on extending to each NEG, each kilowatt hour that a homeowner overproduces. That would be an appropriate reward for Connecticut’s faithful solar pioneers.
Well done Connecticut!! In the meantime, we urge you to get personalized solar quotes so you can see how the numbers pencil out for you!
Click here to get hooked up with a local solar installer for your home or business
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My thoughts are that the Connecticut Solar Grant program has been subverted by the agency that administers it.
There is NO provision for owner installed systems- without regard for the skill level of the owner and there is no suggestion of inspection.
I’m not even sure it’s legal to restrict it in this way.
Considering the costs, it looks like a cash cow for the “approved” installers.
It should be the person who is put to the expense that receives the incentive.
Guy gpr123@chartewr,net
Well, not sure it will be all that comfortable for me when I make this statement, but when it comes to installing PV systems there is a great deal of danger to life and property at play. If an installer has not gotten the training in electrical code it is very likely that the installation will not be safe. But it really can be seen as a fine installation anyway, until someone dies or an installation causes damage due to fire or systems damage due to improper handling of the demands that conditions of use, ampacity, voltage place on the installation.
Getting the light bulb to come on is the easy part. Having the light working 24/7 and never putting life, limb or property at risk under every condition an installation will be exposed to during its lifetime is another matter entirely.
There is a reason why the electrical trade is an apprenticing trade and not a book learning trade. The state that I work in requires that I had to be trained for 8,000 hours directly under the supervision of a single licensed person, plus an additional 600 hours of theory and code instruction before I could sit for the written test, then take a practical one on top of that.
With so much more energy, no pun intended, going into PV and other energy alternatives, the numbers of installations that will take place will surely make it clear how dangerous the average untrained person can be, the odds of failure and harm to life, limb and property go up as does the number of projected installations.
There are absolutely some folks who are pure genius when involved with these kinds of things, but they are not the “average” and the population size is looking like it will be increasing so radically that those that are of the genius type will be insignificant compared to the needs of the many that will be wanting these systems. The pioneers of PV all pretty much earned their PHD’s though community exploration, with out worry of a law suite because of their own installations. What about the general public? It is a pain, but consumer protection is a very realistic need. To allow someone to install these systems as a “friend” or for hire with out appropriate training is, in my opinion, far to dangerous to allow.
Whew… didn’t realize “my two cents” was going to be so long winded. Mean no offense to anyone, hope none taken.
Guy is right just another way for the state gov to regulate income earned for a few. But the thing is we don’t need the CCEF there are other rebates and insentives to be had by a home owner. An as for Contractors all is legal as long as a Lic electrition is on staff. Money can be made all around and money can be saved for the home owners. But the way I see it is the people in the Biz now do not want the compatition of new Biz. It’s called greed.
We are a CT State registered, privately owned training school that teaches various greening classes including solar energy, wind generators and other energy efficiency subjects and also trains energy auditors for residential and commercial properties. How and to whom do we apply for supporting grants in CT?
Having lived in Connecticut for 43 years i find it difficult to understand that Ct dones not have Connecticut Solar Rights laws. We have it in Florida and no one can stop one from installing solar systems. http://WWW.Floridarightlaws.com Ct needs to step up to the plate and protect the homeowners and business. No one can stop the installation…
Cost Comparisons
Lease Monthly Costs
42 panels 9.7 KW DC = will produce about 10,078 Kwh per year
Estimated CT Rebate $35,780.00
Lease Payment 15 years fixed $181.39 per month
Lease Payment Year 15-20 $54.42 per month
5KW DC = will produce about 5195 Kwh per year
Estimated CT Rebate $19,944.00
Lease Payment 15 years fixed $82.41 per month
Lease Payment Year 15-20 $25.00 per month
there is a company in New Haven that is involved in that program. no down payment. win win win situation
John, thanks. We actually did cover the CT Solar Lease in two post series and will one day combine. But for those interested in reading, see:
http://www.solarpowerrocks.com/affordable-solar/ct-solar-lease-basics/
Please provide sources for grant money, for CT solar energy projects, for an elderly woman, who lives alone, and on fixed income. Thank you!
Hi, Joyce,
Not sure about grant money, but Connecticut has a terrific solar lease program that we’ve written about. See:
http://www.solarpowerrocks.com/affordable-solar/ct-solar-lease-basics/
and the follow up:
http://www.solarpowerrocks.com/affordable-solar/ct-solar-lease-get-it-while-you-can/
This a good deal that costs 0 down and is restricted to individuals that earn LESS than $250,000 a year. Hope that helps.
I’m a licensed Electrician in MA & CT where could i find training for the installation end. Thank You.
Connecticut is due to end the solar lease program January 29th 2010. This is a moving target date due to people signing up and dropping off.
Hello…I’m trying to get more info about the CT REC program. The link provided in the lead post above to “Mass Energy Renewable Energy Certificate Incentive” says that program covers Massachusetts and Rhode Island. Does it cover CT as well?
Thank you for the great example of a Residential Solar System Installation and Cost analysis, but it does not seem to take in to account any RECs received by the homeowner. Do CT residents get REC’s? And are they valued at 3 cents per kWh for the first 3 years? If I’m calculating that correctly, that means each REC, which is 1000 kWh, is worth 3000 pennies, or $30. That calculation doesn’t seem right, given the general value of SRECs in other states (upward of $600). Can someone clarify this for me?
Kevin-
You have done your calculations correctly.
RECs are traded on a MW scale. In CT, you can get up to $30/MW ($0.03/kWH), while in NJ they are worth almost $700/MW ($0.70/kWH).
NJ did this by carving out a portion of their RPS that had to be fullfilled in-state.
CT tried to do this in the spring ’10 legislative session, but Gov. Rell vetoed the bill.
I think the state should reconsider the approved vendor list given Clarian Energy’s upcoming product that basically just needs to be plugged into a wall socket. Saw it on CNN today.
Which are the options and incentives for commercial PV Systems in Connecticut?
We want to install a PV system in our property in CT (not residential) but I can’t find clear information about incentives and RECs. Where may I look?
Thanks,
Pablo.-
The economics of investing in a solar electric system for your home or business varies depending on a number of factors, including:
• Solar system performance – a function of orientation, pitch (slope) and shading issues of your location
• Electric rates – depends on your individual utility rates (note that rates in CT has increased from as little as 7.7% to nearly 40% for some rate payers — the economics below assume these new rates)
• Utility or state subsidies (usually referred to as rebates) Visit CCEF on the web to learn more and apply for the CT Solar Lease program.
• 30% federal investment tax credit, uncapped for residential
• Income tax credit for CT residents, with a cap of $5,000
Below are the economics for typical 5000-watt residential solar systems in Connecticut, on fully-sunny, south-facing roofs. The calculations include an assumed 5% average annual escalation in electric rates.
5KW SYSTEM CONNECTICUT SOLAR REBATE PROGRAM
System Price $38,000
Rebate $25,000
65.8% Savings
System Price less Rebate $13,000
Fed Investment Tax Credit (30%) $3,900
Year 1 Solar Electricity Savings $990 32.6%
20 Yrs Electric Savings $42,574
Years to Break-Even: 8.3
Internal Rate of Return (20-Yr): 18.5%
Ultimately, the best way to get a clear understanding of a potential solar energy system is to speak to Sundoor Solar. We are specifically trained in the intricacies of building the most efficient system leveraging all possible local incentives. There are some Solar Calculators and estimators you can find online that leverage a satellite picture of your house to estimate the size of the system. This is how we will offer you the preliminary view of your potential solar purchase. This might be a good start, but it’s still not as accurate as measurements taken right from your site. We encourage a site evaluation.
In the end – only a proper site evaluation can tell you if you’re a good candidate for solar and what your final costs vs. benefits are. Please contact the Sundoor Solar team of solar experts if you’re interested.
We need to thoroughly review.
Equipment: The type of solar equipment (solar panels, inverter) you use can increase or decrease the efficiency of the entire system. Each solar calculator may have a different measurement of what they think this average efficiency will be, but they do not allow you the choice of choosing equipment. Equipment choice can also move the price needle up or down.
Shading: It would not be in your financial best interest to install a solar energy system that has significant shading because of the loss in production. In addition, some rebate programs are contingent on reaching a certain production target to receive the full compensation.
Orientation – The best orientation for a solar array is south, but you can cheat it to the southeast or southwest and still receive good production. If your roof has the wrong orientation, you may still be a bad candidate for solar and may not reach production targets for rebates.
Size of your system: Most solar folk’s measure the size of your system based on your electric bill and the percentage of your usage that you want to offset. In the real world, the size of solar energy systems is limited by either budget or the amount of unshaded roof space you have with the right orientation
Sundoor Solar is a licensed designer and installer of photovoltaic (Solar Panel) power systems in Connecticut.
The opportunity to power your home or business with clean, affordable solar powered energy has never been better. With Solar rebates, tax incentives and improvements in technology, solar energy is now not only affordable, but also often the most economical choice for homeowners and businesses. In fact, Connecticut residents have the opportunity to purchase a solar system with no up front costs. Sundoor Solar will work with the Connecticut Clean Energy Fund and CT Solar Lease program to set your home or business up with a solar energy system for a fixed monthly payment. The experts at Sundoor will make sure that you take advantage of all of the incentives, rebates and tax incentives that are available.
The Benefits of Solar Power
• Environmental Benefits: Solar systems are reliable, pollution-free, and use a renewable source of energy preserving our planet’s finite fossil fuel resources.
• Homeowner Benefits: Solar systems allow owners to add an energy-producing improvement to their property at a fixed cost. Over time homeowners recover that cost through reduced monthly electric bills. In addition, homeowners add to the resale value of their homes.
• Savings Benefits: Solar energy systems make owners less vulnerable to future increases in the price of electricity. Imagine, having your electricity at a fixed cost, minimally affected by the inevitable annual increases in electric rates.
• Peace of Mind: Solar Panels are a proven durable technology. Most solar panels are guaranteed for 25 years, protecting your investment.
Call today to schedule a solar site analysis and see how you can benefit from solar energy
Pablo,
Commercial rebates incentives in Connecticut are competitive bidding and must have money for soft cost such as engineering, structural and electrical, have permitting started and your application in by December 31st ODG it is called. However is you want a 30% federal tax grant you must start the process by Oct 1 or it becomes a federal tax incentive, you also get 100% bonus depreciation this year next year it is downed by 50% bonus deprecation.
for Connecticut
http://www.ctcleanenergy.com/default.aspx
federal
http://www.dsireusa.org/incentives/index.cfm?state=us
Pablo,
Also the ZREC market is not decided what and how things will take place yet
The assessor in our town in Connecticut is denying our Geothermal property tax exemption. She claims she is still allowed to tax us for a conventional HVAC system, even though we do not have one. The statute (12-81(57)) does not say she is allowed to do this, instead giving NO limits or restrictions. Nearby statutes (56) and (62) do have this clause, but not (57), which means (to me) that it should be 100% exempt. She is also claiming that no assessor in the state is allowing this exemption. Can any installers contact their clients and find out whether they are receiving any kind of reduction in their property tax for their Geothermal systems? What towns and with what limits?
This should be of critical interest to installers and residents who have installed Geo.
Thanks – Mike
There is some confusion on what rebates, tax credits or incentives are availible for residential installations of solar photo-voltaic and geothermal systems. I would like to install both this summer or earlier and need to understand the cost implications. It seems that most of the programs are in flux. My goal is to move towards zero fossil fuel consumption this year if possible. Thanks
I am interested in having solar installed in our stratford office. I like a local provider.