2022 Connecticut Solar Incentives Guide (Tax Credits, Rebates & More)

In this EcoWatch guide on the solar incentives in Connecticut, you’ll learn:

  • What the Home Energy Solution Loan Program is
  • Which solar tax breaks Connecticuters can take advantage of
  • How Connecticuters can profit off of the solar energy their homes produce

This guide has helped thousands of Connecticut homeowners save time and money when going solar. Let’s get started!

Ecowatch Author Karsten Neumeister

By Karsten Neumeister, Solar Expert

Updated 9/18/2022

Why You Can Trust EcoWatch

Our solar experts have sifted through hundreds of local governments’ and utility companies’ websites to find accurate information about current solar incentives in each state. We’ve also unbiasedly ranked and reviewed hundreds of solar installers to empower you to make the right choice for your home. 

Jump to Section:

  1. What Should You Know About Connecticut’s Solar Industry?
  2. Connecticut Solar Tax Exemptions
  3. Connecticut Solar Loan Programs
  4. Net Metering in Connecticut
  5. What Should Connecticut Homeowners Know About the Federal Solar Tax Credit (ITC)?
  6. FAQs: Connecticut Solar Incentives

When you’re ready to speak with a qualified professional, follow the links below. Each of these companies can help you identify and apply for incentives available in Connecticut.

Disclaimer: This article is for informational purposes only. It should not be relied on for and is not intended to provide accounting, legal or tax advice.

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What Should You Know About Connecticut’s Solar Market?

Connecticut is a relatively solar-friendly state, so there are some state and federal solar incentives that make going solar a better investment in the long run and others that make converting to this renewable energy source more affordable. Connecticut homeowners pay around $2.80 per watt when installing solar panels, which is well above the national average.

The total average cost to go solar in the state is $21,000, and many residents will understandably look for ways to reduce their upfront costs or justify spending so much on clean energy. Below, we’ll be discussing all of the incentives and rebate programs available to CT residents and how each can improve your return on investment.

Watch Below: See Where Connecticut Ranks In Solar and Wind Production

What Solar Incentives Does Connecticut Offer?

The table below provides a brief look at the solar incentives you’ll have access to in Connecticut in 2022. We’ll provide a brief description of how each of these works, plus more information about eligibility and upcoming program changes below the table.

Connecticut Solar Incentive Description
Federal Solar Tax Credit (ITC) The federal solar tax credit is worth 30% of your entire solar panel system cost and is available to all homeowners who purchase and install their systems by December 31, 2032. The credit will decrease to 26% in 2033 and 22% in 2034.
Sales and Use Tax Exemption for Solar and Geothermal Systems Connecticut homeowners don’t have to pay sales tax on their solar equipment or installation services.1 Given the state tax rate of 6.35% and the average system total of $21,000, this equates to an average savings of $1,334.
Property Tax Exemption for Renewable Energy Systems Normally, any time your home’s value increases, your property taxes will go up as well. Although solar panels boost your home value in Connecticut — if you purchase or finance them — the property tax exemption guarantees that your taxes won’t spike as a result.2
Solar Loan Programs The average cost to go solar in Connecticut is most easily afforded with solar financing, and the state makes solar loans affordable and accessible to most homeowners. There are several solar loan programs available in Connecticut that you can use to finance your panels for little or no money down and with a low interest rate.

We’ll discuss these options in greater depth below.

Net Metering Net metering is a billing policy that utility companies offer to help customers offset electric bills using interconnection. Basically, you can overproduce power with your panels, and your account will get credited based on the energy you send to the electric grid.3

Net metering is mandated by the State of Connecticut. We’ll discuss the specifics of the policy below.

See also: Calculate how much you can save by going solar

Connecticut Solar Tax Exemptions

Connecticut only has a handful of solar incentives, but the state does its best to limit the downsides of going solar. Two of the most important policies to that end are the sales tax exemption and the property tax exemption.

First, Connecticut has the Sales and Use Tax Exemption for Solar and Geothermal Systems, which prevents you from having to pay sales tax on renewable energy equipment. Normally, the standard tax rate of 6.35% would apply to solar panels, battery storage options, inverters, mounting equipment, the installation services and any other part of your solar power system. The sales tax exemption prevents you from having to pay that tax, saving homeowners an average of $1,334 upfront.

The property tax exemption is worth even more in the long run (in most cases). Solar panels bump up your home value, which would normally cause your tax assessed value to increase — along with your property taxes. Increased taxes are a major downside of going solar in states without a property tax exemption, but Connecticut has one. This exemption ensures that your property taxes won’t go up after you install solar panels.

Connecticut Solar Loan Programs

According to the Solar Energy Industries Association (SEIA), Connecticut is relatively solar-friendly and promotes solar conversion more effectively than most states.5 While there is no statewide solar tax credit or rebate program available, there are a number of solar incentive programs you can take advantage of to reduce your cost of going solar and enjoy a more substantial return on investment. These incentives help the state meet its Renewable Portfolio Standard (RPS) goals.

One of the most effective ways Connecticut makes this renewable energy source so accessible is through state-funded solar loan programs. These often supply homeowners with no-money-down options and low interest rates to minimize the long-term energy costs of solar PV systems.

We’ll discuss the solar loan programs available below, followed by the other state incentives.

  • Smart-E Loans: The Connecticut Green Bank, Energize CT and local lenders have partnered to create Smart-E Loans, which provide a slew of benefits to those financing their solar energy systems. They have a low APR, require little money down and have no penalty for prepayment.4
  • Home Energy Solutions Loan Program: This program is geared toward “income-eligible” residents, so low-income households will likely qualify. While the loans from this program aren’t specifically for solar equipment, they can be used for energy-efficiency upgrades including new insulation and windows, which ultimately make your solar system valuable.
  • Energy Conservation Loan: Also provided by Energize CT, this loan program provides financing solutions for energy-efficiency upgrades and new construction that follows program guidelines in terms of home efficiency. You can use these loans for hot water heaters, gas water heating, HVAC equipment, new insulation and even some renewable energy technology.5
  • PACE Financing: Finally, Connecticut homeowners and business owners will have access to PACE financing. PACE loans stay with the property, not the property owner, and they’re secured by your local municipality or government bonds, so they’re generally available even to solar customers who don’t have good credit. These loans are affordable and have a low interest rate to make solar financing as accessible as possible.6

Net Metering in Connecticut

what solar incentives are available in connecticutNet metering is one of the major solar incentives in states. Most homes with solar systems will still be grid-tied, meaning you can pull electricity whenever your panels don’t produce enough to cover what you need — like on cloudy days or at night. With net metering, you can also send any excess power to the electric grid when your panels produce more than you’re using, and you can earn credits for this energy.

The net metering policy provided by your utility company states how you’ll be compensated for outgoing kilowatt-hours. Most credit your charges for incoming energy, helping you to offset or even eliminate your electricity bills. Net metering is mandated for public utilities in Connecticut.

However, while every solar customer will have access to a net metering program, the specifics vary based on your utility provider. You should check with yours before signing anything. Most Connecticut residents will be serviced by Eversource, which is a wonderful option that provides cash for excess energy production throughout the year. In effect, you could be paid by your utility company rather than the other way around!

What Should Connecticut Homeowners Know About the Federal Solar Tax Credit (ITC)?

Connecticut homeowners can take advantage of the federal solar investment tax credit (ITC), which is available statewide and is one of the most substantial financial incentives in the area. The ITC is offered by the federal government and gets credited to your federal tax liability.

If you install your system anytime before the end of 2032, the tax credit will be for 30% of the entire cost of your renewable energy system. In Connecticut, where the typical system totals $21,000, that comes out to a credit of approximately $6,300.

The ITC will drop to 26% for systems installed in 2033 and 22% for systems installed in 2034. The credit will expire in 2035 unless Congress renews it.

Read More About Going Solar

FAQs: Connecticut Solar Incentives

At EcoWatch, we frequently get questions from Connecticut homeowners about the solar incentives available in the state and how they can save money on solar conversions. Below are some of the questions we see most often. If you have specific questions that aren’t answered here, reach out to our team of solar experts at solar@ecowatch.com.

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Karsten Neumeister

Solar Expert

Karsten is a researcher, editor, writer and energy specialist focused on environmental, social and cultural development. Before joining EcoWatch, Karsten worked in the solar energy sector, studying energy policy, climate tech and environmental education. A lover of music and the outdoors, Karsten might be found rock climbing, canoeing or writing songs when away from the workplace.