The solar industry is growing at a rapid pace in Connecticut. As the cost of solar systems continues to decrease and the benefits of installing solar panels become more clear, homeowners are increasingly turning to solar as a way to save money on their utility bills.
The state has taken notice and is working on ways to support its residents’ transition toward using renewable energy sources, including through programs like the Renewable Energy Standard (RES) program and incentives for installing solar panels. Learn more about CT solar incentives!
The Previous Plan: Connecticut Green Bank Residential Solar Investment Program (RSIP)
The Connecticut Green Bank Residential Solar Investment Program (RSIP) was a rebate program that was created to incentivize the adoption of renewable energy by providing rebates to residential and commercial customers who purchase or lease solar panels.
Connecticut Green Bank Residential Solar Investment Program (RSIP) offered two different types of incentives:
For Purchased Systems: Upfront cost reduction of $0.426 per installed watt based on system size (max. size 10 kW).9
For Leased Systems: Compensation of $0.30 per kilowatt-hour (kWh) produced by the solar power system (max. size 20 kW).
However, this program was replaced by the RES program.
What is the RES Program?
Connecticut is serious about its commitment to renewable energy. In fact, the state has one of the most aggressive RES programs in America. The Renewable Energy Standard (RES) program requires that renewable energy sources make up 20% of all electricity sold in Connecticut by 2020. This means that by 2020, 20% of all electricity sold in Connecticut must come from renewable energy sources such as wind or solar power.
Previously this requirement was met through energy credits purchased from other states with more aggressive renewable energy requirements than Connecticut’s (such as California). However, this approach has proven difficult due to fluctuating prices in those other states and an inability of those states’ utilities to meet their own requirements for selling clean energy credits due to low demand from other states like ours here in Connecticut.
So how do we make sure we’re meeting our RES requirements? By installing more solar panels!
Our RES requirements are met by using a variety of strategies. We make sure that we’re meeting our RES requirements by:
- Make sure that all of our employees are properly trained to handle RES issues, so they can recognize them and take the appropriate measures.
- Incorporating RES training into the onboarding process for new employees, so they can be fully versed in how to deal with RESs from the get-go.
- Creating an environment where employees feel comfortable raising concerns about potential RESs, so that if there is something going on at work that could potentially violate our company’s policy regarding RESs, it can be reported before it becomes too big of a problem.
Federal Solar Investment Tax Credit (ITC)
The Federal Solar Investment Tax Credit (ITC) is a tax credit that allows you to deduct the cost of a solar system from your taxes. It’s available for purchased home solar systems installed by December 31, 2022.
The federal ITC is equal to 30% of the cost of your system. The maximum credit you can claim is $2,000 per kilowatt (kW) of capacity on your system. This means that if your system is 10 kW, you can claim a maximum credit of $20,000.
If you’re eligible for the full 30% credit, then it will take about four years for your investment in a home solar system to pay itself off.
Property Tax Exemptions For Renewable Energy Systems
The Connecticut Department of Revenue Services (DRS) has created a tax exemption program for homeowners who install renewable energy systems on their property. This means that the added value of your home from installing a solar panel installation is exempt from property taxes.
This means that if you install a solar panel system on your home, your property taxes will be reduced by the amount of the value added to your home by the solar panel installation.
If you live in Connecticut and have had a solar panel installed, you should contact DRS to request an exemption from property taxes on the added value of your home due to the installation of solar panels.
Sales and Use Tax Exemption for Solar And Geothermal Systems
The state of Connecticut offers a 6.35% sales tax exemption for the purchase of home solar and geothermal systems. This exemption is available on the first $10,000 of the cost of a system, up to a maximum of $6,350. It also applies to the installation costs of a new system, including labor and materials.
Call Us Today For More Information
If you’re interested in learning more about solar incentives, give us a call today. We’re happy to answer any questions you have and will be glad to schedule an appointment to come out and talk about your solar system options.