2023 Solar Incentives Guide for Derby, CT - Tax Credits & Rebates

What Solar Tax Credits, Incentives, and Rebates are Available in Derby?

Source: https://www.dsireusa.org/

The phrase "solar incentives" generally refers to financial incentives that are in place to encourage increased use of renewable energy by making solar panels more affordable. Solar incentives might include upfront discounts, cash back or credit towards your monthly utility bill. Some incentives are provided by the federal government, some by the state of Connecticut and some by your utility company, county or municipality. Some solar incentives you might qualify for are:

• Tax Credits: These credits are dollar-for-dollar reductions (not deductions) in how much income tax you owe the federal government.
• Tax Exemptions: These may come in the form of property tax exemptions, which would allow you to exclude the value of your solar system when calculating the taxes you pay on your home. You may also qualify for an exemption on sales tax at the time of purchase.
• Rebates: Rebates, or cash back after a purchase, are typically applied before any solar tax credits are calculated. Rebates might be provided by your local utility company, by your state or by your county.
• Net Metering: Net metering becomes relevant after your solar system is up and running. If you have a net metering agreement in place with your Derby utility company, they will subtract the value of the excess energy your solar system produces from your utility bill each month. In some places, this is a dollar-for-dollar credit, while in others you might make back a percentage of the value.

Federal Solar Incentives

Federal solar incentives are likely the first thing that you think of when thinking about solar incentives. The Federal Solar Investment Tax Credit, or ITC, is likely the best-known federal solar incentive. The ITC provides a tax credit for a set percentage of the cost of your solar system.

The ITC can be applied to the total cost of installing solar panels, including the panels themselves as well as accessories, equipment and labor. You can claim this credit for panels installed after January 1, 2006 on a primary or secondary residence that you own, as long as it is located in the United States. The tax credit ranges from 26-30% of total costs depending on when your project was completed. There is no maximum claim amount.

To more fully understand how the ITC will apply to your situation, contact your local Derby solar panel installation expert and ask for more information.

In August 2022, the ITC (now called the Clean Energy Credit) was bolstered by the passing of the Inflation Reduction Act. The new Clean Energy Credit is valid until 2035. American homeowners are now eligible for a 30% credit for solar systems installed between 2022 and 2032. The total credit will then see a slight annual decrease until the date of expiration. The expansion to the program also makes claiming credit for energy storage systems easier than ever before, starting in 2023.

Click here to learn more about the new Inflation Reduction Act. Your local Derby solar panel company is the best resource for answering your questions about the new Clean Energy Credit and how it will apply to you.

State & Local Solar Incentives

There are more than just federal solar incentives; rebates, tax credits and more might also be offered at the state and local level. These incentives might be distributed by the Connecticut government, or by your county or municipality. Some are available for a limited time, while others are ongoing.

Next Steps for Installing Solar in Derby

The variety of available solar incentives has helped tremendously increase the use of solar power nationwide over the last 15 years. You might qualify for solar incentives from the Connecticut government, the federal government or your local utility company. If you're prepared to make the change to solar energy, talking to your local Derby solar panel installation expert is an excellent place to start.