Connecticut Solar Incentives
Installing solar power is an effective way to reduce electricity costs
as a resident in Connecticut.
Solar power installation costs are dropping at tremendous rates in the U.S. These prices have dropped steadily by 12% from 2015 to 2016 and 66% from 2010 to 2016. Affordable financing models and Connecticut solar incentives make it easy for homeowners to install solar power.
The Connecticut Green Bank provides incentives to offset the cost of solar power investments. They provide low-cost, long-term financing support to clean and renewable energy projects by using a variety of financial mechanisms. The Connecticut Green Bank explains three very popular financing models to install a solar power system:
- Homeowner purchase: Solar PV systems may be purchased in cash or through a loan. The average solar loan term ranges between 15 to 20 years with flexible rates. After the payback period, solar owners can see greater benefits from their upfront investment.
- Solar lease: With a solar lease, a third party developer owns and maintains the solar PV system. Lease terms range from 15 to 25 years, during which the homeowner pays a series of predetermined payments. Payments are set ahead of time, so monthly costs are stable and predictable. For example, the average monthly cost could be $93.88 based on
20 year fixed term.
- Power Purchase Agreements (PPA): With a solar PPA, a third party owns and maintains the solar PV system. PPA terms range from 15-25 years, during which the homeowner pays a fixed or escalating rate per kWh. Because solar costs will vary based on production, bills are typically higher in the summer and lower in the winter. The average solar energy cost is approximately 16.4¢ per kWh, based on 20 year fixed term.
Solar incentives for Connecticut’s continue to make it easy for solar power to flourish. The U.S. Solar Energy Industries Association (SEIA) ranked Connecticut 17th for top states for solar installations in 2015. With electricity prices so high in the state, installing a solar power system makes sense and will continue to be great for a long time.
Connecticut has a wide variety of incentive programs that incentivize homeowners to install solar power systems. These programs range from tax rebates, tax exemptions and tax credits.
- State Solar rebate programs: Officially known as the Residential Solar Investment Program (RSIP) and administered by the Connecticut Green Bank, this rebate is worth $0.54 per watt of solar installed (up to 10kW). So, a homeowner who invests in a 5kW system would receive $2,700 right off the bat.
This Residential Solar Investment Program (“RSIP”) offers two types of incentives:
- The Expected Performance-Based Buydown (“EPBB”): Provides the homeowner with an upfront cost reduction based on the major design characteristics of the solar power system, such as panel type, tilt, shading, and orientation. The incentive is paid directly to the Eligible Contractor on the homeowner’s behalf when the system is complete. This program pays $0.487 per Watt PTC for systems that are up to 10 kW PTC in size. So to put this in perspective, a 7.5 kW PTC (or 7,500 Watt PTC) system would be calculated at 7500 * 0.487, equaling an estimated $3,653 rebate, as an upfront cost reduction paid to the homeowner’s contractor when the system is complete.
- Performance-Based Incentive (“PBI”): Designed to allow homeowners to benefit from solar power systems for little to no upfront cost. Under this model, an Eligible Third-Party Solar Power System Owner owns the system and enters into a contract with the homeowner. The PBI is paid to the Owner based on performance over the course of 6 years and is used to reduce the homeowner’s monthly cost. Incentives are available for systems up to 20 kilowatts PTC. For example: A 7 kW PTC (or 7,000 Watt PTC) system that is estimated to produce 8,100 kWh in its first year would receive an estimated $1872 Performance-Based Incentive over six years. This incentive is paid directly to the system owner and is reflected in the homeowner’s lease or PPA price.
- Energy Conservation Loan Program: On top of the solar rebate, the state may also provide the homeowner with a low interest loan for the solar power system. Thanks to the Energy Conservation Loan, eligible families can borrow up to $25,000 for 10 years at low interest rates between 0 percent and 6 percent. Applications and deadlines for this program can be found here.
- Tax exemptions for renewable energy equipment: One of the most popular and long-standing incentives in Connecticut is the Solar and Use Tax Exemption for solar. To put it plainly, homeowners don’t have to pay any taxes on new solar panels. Furthermore, the Property Tax Exemption for Renewable Energy Systems keeps them from having to pay any additional taxes on the increased value of their home. To learn more about the Sales and Use Tax Exemption for Solar including application process and deadlines please click here.
- The solar tax credit (ITC): The federal government also provides some significant incentives to help U.S. homeowners install solar power systems. The federal Investment Tax Credit (ITC), one of the most significant subsidies for solar, is a rebate worth 30 percent of the system cost, and will be deducted from your federal income tax. That said, the ITC applies only to those who purchase their solar panels systems upfront (either with a cash purchase or solar loan like the Energy Conservation Loan), and that they must have enough income for the tax credit to be worthwhile. To learn more about the ITC, please click here.
Today there are over 50,000 solar power systems installed on homes in the state of Connecticut, according to 2017 statistical data from the SEIA. Currently there is over 366 MWs of solar capacity installed – a 300% jump from 2016’s modest 105 MW solar capacity. For more information regarding Connecticut Solar Statistics, click here.
Whether installing a solar power system makes sense for you depends on various considerations, from the home’s location and the direction it faces to the age of the roof and tree cover on the property. For states located in the Northern hemisphere of the U.S., these properties are very important and highly dictate the power production of the installed system.
Go solar with Trinity today
These solar incentives for Connecticut make going solar more affordable than ever before. Make your move toward a lower energy bill today and rest assured knowing that Trinity will be there every step of the way – see if you qualify here
. Champion your community—follow this link
and for every family you help go solar through our referral program, you get cash.