2025 Solar Incentives Guide for Madison, CT - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Madison.
You'll learn about:
- Local & State Solar Incentives
- Federal Tax Credits (Updated for 2024 and beyond)
- Ways to optimize your solar investment
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What Solar Tax Credits, Incentives, and Rebates are Available in Madison?
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/
The term "solar incentives" covers a range of financial incentives implemented to make installing and using solar panels more affordable. This is done to encourage people to switch to renewable energy. Solar incentives may include cash back, upfront discounts or credit towards your monthly utility bill. Some incentives are offered by the federal government, some by the Connecticut government and some by your utility company, county or municipality. Categories of solar incentives include:
- Net Metering: Net metering factors in once your solar panels are up and running. If you have a net metering agreement with your Madison utility company, it will subtract the value of the excess energy produced by your solar system from your monthly utility bill. In some places, this is a dollar-for-dollar credit, while in others you might make back a percentage of the value.
- Rebates: A solar rebate is a partial refund credited to your account after you've paid for your solar panels. Rebates might be offered by your local utility company, your state or your county. The rebates are usually applied before calculating tax credits.
- Tax Exemptions: These can come in the form of property tax exemptions, which let you exclude the value added by your solar panels when paying taxes on your house. You could also look for exemptions on sales tax at the time of purchase.
- Tax Credits: Tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the government. (This is different from a tax deduction.)
Federal Solar Incentives
Federal solar incentives are likely to be the first thing that you think of when thinking about solar incentives. The solar incentive that you're most familiar with is probably the Federal Solar Investment Tax Credit (ITC), which gives you a credit on your taxes equal to a specified percentage of your solar system's cost.
The ITC was originally for 30% of the cost of installing solar panels, although it has fluctuated slightly over time between 26-30%. The installation date of your solar system will determine what percentage you qualify for. The total cost of installation includes the panels themselves as well as the cost of labor, equipment and accessories. There is no maximum claim amount. The ITC can be applied to solar panels installed after January 1, 2006, on your primary or secondary residence. The residence must be in the United States and owned by you.
Your local Madison solar panel installation expert can give you more information about the ITC and how it might apply to your situation.
In August 2022, the Inflation Reduction Act made revisions to the ITC, now titled the Clean Energy Credit. Homeowners can now qualify for a credit equal to 30% of the total solar system installation costs for projects started after January 1, 2022, and completed before the end of 2032. The percentage will then begin to decrease annually until the Clean Energy Credit ends in 2035. Beginning in 2023, it will also be easier to get credits for energy storage systems under this new program.
Click here to learn more about the new Inflation Reduction Act. Your local Madison solar panel installation expert is the best person to answer your questions about the new Clean Energy Credit and how it will apply to you.
State & Local Solar Incentives
Rebates, tax credits and more can be provided at multiple levels. In addition to federal solar incentives, there are often state and local ones, too. Certain incentives are offered for only a limited time, while others are ongoing. These local incentives could come from the Connecticut government, or from your specific county or municipality.
Next Steps for Installing Solar in Madison
Solar incentives can come from the Connecticut government, the federal government or your local utility company. The large number of solar incentives available has contributed to a large increase in solar energy use in the last 15 years. If you're ready to make the change to solar energy, calling your local Madison solar panel installation expert is an excellent place to start.
EcoWatch's Madison, CT Solar Incentives FAQs
My home already has solar panels. Does my system qualify for any incentives?
If your solar panels were installed after January 1, 2022, you may qualify for the newly increased 30% tax credit under the Inflation Reduction Act. If you installed your system between 2006 and 2021, you may qualify for a tax credit between 26% and 30%, depending on the date of installation. Speaking with the company that installed your solar system, or any local Madison solar installer, can help you learn what incentives you might want to apply for.
How much will solar panels save me on my electric bill in Madison annually?
Once you add solar panels to your Madison home, you can expect to save about $1,193.58 per year, or about $22,677.98 over the next 20 years.
How long until the federal solar tax credit ends?
The federal solar tax credit, previously called the ITC and now named the Clean Energy Credit, is set to end January 1, 2035. The current 30% credit will end in 2032, replaced by a 26% credit in 2033 and a 22% credit in 2034.
I want to switch my appliances out for ones that are more energy-efficient. Are there any benefits I can claim?
The new Inflation Reduction Act creates a variety of new financial incentives that are available when you make eco-friendly improvements to your home. More details regarding these incentives, including information about incentives for purchasing new appliances, can be found here.
Can I receive incentives both towards the initial 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 precisely 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 incentives correctly and that you're getting the most money you can.
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