2025 Solar Incentives Guide for East Lyme, CT - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in East Lyme.
You'll learn about:
- Local & State Solar Incentives
- Federal Tax Credits (Updated for 2024 and beyond)
- Ways to optimize your solar investment
Solar installers are experts in maximizing your solar tax credits and rebates.
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What Solar Tax Credits, Incentives, and Rebates are Available in East Lyme?
Local Option - Property Tax Exemption for Renewable Energy Systems
Property Tax Exemption for Renewable Energy Systems
Sales and Use Tax Exemption for Solar and Geothermal Systems
Residential Solar Investment Program
Up to 10 kW PTC: $0.358/W
10 to 20 kW PTC: $0.207/W
Incentive is reduced accordingly for Design Factors below 75%. Minimum design factor is 60%.
Third-Party-Owned (PBI):
Up to 20 kW PTC: $0.03/kWh for 6 years
Minimum Design Factor 60%
Connecticut Green Energy Building Solutions
Smart-E loans
Sales and Use Tax Exemption for Energy-Efficient Products
Energy Conservation Loan
Landlord Loan: $40,000
The United Illuminating Company - Small ZREC Tariff
Eversource - Small ZREC Tariff
(Electric and Gas) Residential Rebate Program
Refrigerators/Freezers, Room A/Cs, Dishwashers, Clothes Washers, Dehumidifiers: Incentive Included in Retail Price
Central A/C: $200
Air Source Heat Pumps: $500
Heat Pump Water Heater: $750
Lighting: Incentive Included in Retail Price
Geothermal Heat Pumps: $500-$1,500
High Efficiency Furnace, Natural Gas Boiler, and Boiler Circulator Pump: Instant Discounts of $25-$800
Local Option - Residential Sustainable Energy Program
Federal Residential Renewable Energy Tax Credit
Source: https://www.dsireusa.org/
Solar incentives are intended to make renewable energy usage more affordable via financial incentives to help people install solar panels on their homes. The incentives may 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. You might qualify for any of the following types of solar incentives:
- Net Metering: Don't forget to talk with your East Lyme utility company about signing a net metering agreement. This will allow you to receive credit towards your utility bill every month for the value of excess energy your solar panels generate. You may receive either a dollar-for-dollar credit or a percentage of the value.
- Tax Credits: Tax credits are dollar-for-dollar reductions that lower the amount of income tax you owe the federal government. (A tax credit is different from a tax deduction.)
- Rebates: Solar rebates may be provided by your local utility company, or by your county or state. These rebates are essentially partial refunds that are applied after you purchase solar panels and before tax credits are calculated.
- Tax Exemptions: These can come in the form of property tax exemptions, which allow you to exclude the value of your solar system when calculating the taxes you pay on your home. They may also include exemptions on sales tax at the time of purchase.
Best Regional Coverage
Momentum Solar
- Great warranty coverage
- Representatives are experts on local policies
- Concierge service ensures steady communication
- Slightly limited service offerings
Best for Leasing
Sunrun
- Expansive service area
- Many financing options
- Some reported issues with customer service
- Some reported issues with door-to-door sales
Federal Solar Incentives
Federal incentives are the type of incentives that you are most likely to have some familiarity with. A federal incentive that most people are likely familiar with is the Federal Solar Investment Tax Credit (ITC). This is a tax credit for a certain percentage of the cost of your solar system.
The ITC applies to solar panels installed on your primary or secondary residence in the United States. The solar system has to have been installed after January 1, 2006, on a property owned by you for you to claim the credit. Originally, the ITC covered 30% of all system costs (panels, labor, equipment and accessories), although the covered amount has fluctuated slightly over the last few years between 26-30%. The amount you qualify for will depend on when your solar system was installed. There is no cap on the claim amount.
To find out exactly how much money the ITC could save you, talk to your local East Lyme solar panel installer.
In August 2022, the Inflation Reduction Act laid out new provisions for the ITC, now titled the Clean Energy Credit. For solar systems installed between January 1, 2022, and December 31, 2032, homeowners can apply for a credit for 30% of the total cost. The percentage will then decrease annually until the Clean Energy Credit expires in 2035. Starting in 2023, it will also be easier to get credits for energy storage systems under the new laws.
More information about the new Inflation Reduction Act can be found here. Your local East Lyme solar panel installation expert is the best person to answer your questions about the new Clean Energy Credit and how it applies to you.
State & Local Solar Incentives
Some solar incentives may be provided at the state and local level. As with federal incentives, these can include rebates, tax credits and more. Some incentives are offered for only a limited time, while others are ongoing. Your local solar incentives could come from your county or municipality, or from the Connecticut government.
Next Steps for Installing Solar in East Lyme
Solar incentives may come from the federal government, the Connecticut government or your local utility company. The variety of solar incentives available has helped nationwide use of solar energy increase greatly in the last 15 years. We suggest talking to your local East Lyme solar installer to learn more about these incentives and to be sure that you're getting the largest number possible for your solar panels.
EcoWatch's East Lyme, CT Solar Incentives FAQs
My home already has solar panels. Do I qualify for any incentives?
An excellent idea would be to talk to the company that installed your solar panels – or get in touch with a local East Lyme solar installer — to clarify which incentives you might qualify for. If your system was installed after January 1, 2022, you likely qualify for the newly increased 30% tax credit under the Inflation Reduction Act. Solar panels installed between 2006 and 2021 may qualify for a tax credit of 26-30%.
How much will solar panels save me on my electric bill in East Lyme annually?
Typically, homeowners in East Lyme who install solar panels save about $1,216.96 per year, or about $23,122.19 over 20 years after making the switch.
When does the federal solar tax credit end?
The federal solar tax credit, formerly known as the ITC and now called the Clean Energy Credit, is set to end on January 1, 2035. The current 30% credit will end in 2032, replaced by a 26% credit in 2033 and a 22% credit in 2034.
Can I qualify for incentives both towards the up-front cost of solar panels, and later as reimbursement?
Yes, you can claim both tax credits and rebates towards the cost of your solar panels. Depending on which incentives you are applying for, they may apply in a different order. Make sure that you speak with your solar installer or a local tax professional to verify that you are claiming the correct incentives and getting the most money you can.
Can I use solar and another type of renewable energy in combination to power my home?
You can use multiple types of renewable energy, or a combination of renewable and non-renewable energy, to power your home. Make sure you talk through your ideas with your local East Lyme solar installation expert. They can help you as you plan for your project and give you an understanding of various incentives that you will or won't qualify for.
Our goal is to reach as many people as we can with sensible solutions like solar energy. Our team of full-time local researchers collects solar price and installation data for every city in America then compiles it to create these digestible city guides. If you want to read our solar expert's opinion on the top solar companies featured here, follow this link.
Solar incentive research was conducted by Melissa Smith and Karsten Neumeister. Local data analysis was conducted by James Savino. See something we missed or could do better? Email the editor.