Connecticut is one of the best states in the country for solar, both in terms of potential savings and access to solar incentive programs. The average price of a solar system in Connecticut is $21,000 before incentives and $14,700 after incentives. While this is a major cost for most homeowners, the average Connecticut homeowner will save more than $42,000 throughout their solar system’s life, making it more than worth the initial cost.
The good news for Connecticut residents is that the state has several incentive programs that reduce the up-front costs of going solar, making it more feasible for homeowners to make the switch. In this article, I cover Connecticut’s solar incentives, explaining how to make the most of the state’s incentives and how much you can save.
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How Does Connecticut Rank for Solar Incentives?
Connecticut offers more solar incentives than most states, which is good news because the cost per watt of going solar in Connecticut is $2.80, $0.14 higher than the national average of $2.66. Connecticut residents also have more to gain by switching to solar than the residents of most states since the average monthly utility bill is a staggering $161.55, about $44 higher than the national average.
Even though the benefit of installing solar panels in Connecticut is undisputed, not everyone who wants to go solar can afford to due to the high up-front costs. Connecticut’s solar incentives help reduce these initial costs and make solar more accessible than it initially seems, just going by the sticker price.
The table below summarizes all the solar incentives available in Connecticut, including a rough estimate of how much money it can save you, where possible. In the following sections, I describe each incentive in detail, explaining how to tell if you’re eligible for each program and how to apply for it.
| Solar Incentives Available in Connecticut | What Is It? | When Can You Get It? | How Much Can It Save You? |
| Federal Solar Investment Tax Credit (ITC) | Credits 30% of your entire system price to your income tax burden | One time: Gets applied when you file your taxes after installation | $6,300 via tax credits on average in Connecticut |
| Smart-E Loans | Low-interest financing for energy-efficient home improvements like solar panels | One time: Applies when you purchase your solar energy system | Varies depending on system size and loan details |
| Property Tax Exemption for Renewable Energy Systems | Avoids property taxes increasing after installation | Ongoing: Applies every year your system holds value | Varies depending on your system’s size and your property tax rate |
| Sales Tax Exemption for Solar Systems | Solar panels are exempt from sales tax in Connecticut | One time: You don’t have to pay sales tax when you purchase your solar system | Varies, but averages out to $1,334 for a 7.5-kW system |
| Net Metering (Residential Renewable Energy Solutions) | Allows you to earn energy credits for all overproduction | Ongoing: Always in effect | Varies based on system size, energy needs and credit rate |
Featured Video: Why Are Solar Batteries Important and Will CT Pay You To Install One?
Federal Solar Tax Credit (ITC) – How It Impacts Connecticut Residents
My Take: The ITC is one of the best solar incentives in the country, potentially reducing effective system costs by 30%.
The federal ITC Program in Connecticut. It reduces your tax burden by 30% of the total cost of your solar system.
The federal government runs the federal ITC and lets you claim 30% of the total cost of your solar system to reduce your federal tax liability for the year when you have the system installed. You can roll the credit over to subsequent years if you owe less than your credited amount.
An important point that some people miss about the ITC is that it is a tax credit, not a tax rebate. That means that you must owe taxes to take advantage of the incentive.
As of 2023, the federal ITC is scheduled to phase out by 2034. While that gives you a lot of time to claim the tax credit, I recommend taking advantage of it sooner rather than later. The longer you wait, the lower the amount you can claim.
The current plan is to phase out the ITC by 2034:
- 30% of your total system value for solar photovoltaic (PV) systems installed before 1/1/2033.
- 26% of your total system value for solar PV systems installed after 12/31/2032 and before 1/1/2034.
- 22% of your total system value for solar PV systems installed after 12/31/2033 and before 1/1/2035.
- ITC discontinued for systems installed after 12/31/2034.
Steps to Claim the Federal Solar Tax Credit in Connecticut
It’s relatively easy to claim the federal solar tax credit in Connecticut. Still, I recommend consulting a certified public accountant (CPA) to be safe. Here are the steps you need to take to claim the federal ITC:
- Download form 5695 from the IRS website.
- Fill out part 1 of the form to calculate your tax credit. Solar systems go under “qualified solar electric property costs.” Your system’s cost goes in line 1, and calculations 6a and 6b determine the credit you receive.
- Go to line 13 unless you have other qualifying renewable energy additions to your home or rollover credit from previous years.
- Use the Residential Energy Efficient Property Credit Limit Worksheet found here to calculate your tax liability limitations.
- Use the information from step 4 to complete the calculations on lines 15 and 16.
- Don’t forget to include your tax credit from line 15 on line 5 of your 1040 when you file your tax return for the year.
Don’t forget that this credit only applies to any federal taxes you owe. If your credit is worth more than the amount you owe in the year you have your panels installed, you can roll over the credit and apply it to your tax liability in the following year.
Which Solar Incentives Are Offered at the State-Level in Connecticut?
Connecticut residents are lucky to live in a state with competitive solar incentive programs. The federal ITC is the largest incentive available to residents of the Constitution State, but Connecticut’s state-level incentives help reduce the cost of going solar even further.
The three main solar incentives available at the state level in Connecticut are:
- Smart-E Loans
- The Property Tax Exemption
- The Sales Tax Exemption
I cover each incentive in detail in the sections below.
Smart-E Loans for Connect Solar
My Take: Since solar loans can be expensive, these loans are great for making renewable energy more accessible and more affordable over time.
Connecticut’s Smart-E Loans program makes it much easier for the state’s residents to afford a rooftop solar system. The program is administered by Connecticut Green Bank in partnership with Energize Connecticut.
Connecticut’s biggest barrier to going solar is the high up-front cost of solar panels. Most homeowners have to finance their solar power system with a solar loan, but finding financing programs with reasonable rates can be challenging. Connecticut’s Smart-E Loan program makes it much easier to get low-interest loans, and its low rates will save you money compared to a traditional loan from a private financial institution.
To be eligible for the Smart-E Loan program, Connecticut residents must own and live in a single-family or multi-family home with no more than four units. They must also have a minimum credit score of 580 or a minimum credit score of 640 if they’re applying for a loan of $25,000 or more.
Smart-E Loans are available from $500 to $40,000 with rates between 4.49% and 6.99% and terms between five and 12 years. Here are the current rates and terms offered by the program:
- 4.49% for 5 years
- 4.99% for 7 years
- 5.99% for 10 years (minimum loan size of $5,000)
- 6.99% for 12 years (minimum loan size of $5,000)
Solar photovoltaic (PV) systems are eligible for Smart-E loans, as are solar hot water systems, electric vehicle (EV) charging stations, and many other non-solar energy efficiency upgrades.
This solar incentive doesn’t save you money directly, but it reduces the cost of capital compared to other financing options, which makes solar much more accessible to a wider range of Connecticut’s demographic.
Steps to Claim Connecticut’s Smart-E Solar Loan
I already covered the eligibility requirements for the Smart-E Loan program, so make sure you’re eligible before you apply. If you meet the requirements, here are the steps you need to take to apply for a Smart-E Loan:
- Head to the Capital for Change website and fill out the application form found here.
- Make sure you have the details of your solar project from your solar installation company. Renewable energy projects must meet certain efficiency requirements to be eligible for a Smart-E Loan.
- Choose the loan term and rate combination that works for you and wait for approval.
- Once approved for the project, Capital for Change will set up your payment plan and work out payment with your solar installer.
Property Tax Exemption for Renewable Energy Systems in Connecticut
My Take: This is a pretty standard incentive in the U.S., but it can save thousands of dollars in the long run, making it a great option in CT.
Connecticut homeowners don’t have to pay property taxes on the increased value of their home due to installing solar panels. This amounts to savings of a few thousand dollars throughout your solar system’s life span.
Solar panels typically increase the value of your home, which would normally mean your property taxes would increase when you install a solar array. However, Connecticut offers a property tax exemption that excludes the value of your solar system from your property tax assessment.
Zillow conducted a study that found that average solar panels increase a home’s value by about 4.1%. The average home in Connecticut costs approximately $375,000, so installing solar panels increases the average home’s value by about $15,000. Connecticut’s average effective property tax rate of 1.96% means paying an additional $294 per year in property tax. Over 25 years, avoiding this increase effectively saves the average Connecticut homeowner $7,300.
Steps to Claim Connecticut’s Property Tax Exemption for Renewable Energy Systems
Connecticut handles property tax exemptions at the local level, even though the solar property tax exemption is a state-wide policy. Unfortunately, that means that the process of claiming the exemption differs depending on where you live.
In general, you’ll have to apply for the exemption by filing the necessary paperwork with your local tax assessor. You should file your exemption claim before 1 November if you want the exemption to apply to the current tax year. If you’re having trouble finding your local tax assessor, you can use the spreadsheet at this link to find it.
The good news is that once you apply, you don’t have to reapply every year. You’re done once your system has been inspected and deemed eligible for the property tax exemption.
Connecticut Solar Sales Tax Exemption
My Take: Another pretty standard incentive, but with average sales tax in CT at over 6%, this can save you hundreds and is automatically applied to your costs.
You can save between $1,200 and $1,400 on a solar system in Connecticut since the state doesn’t charge sales tax on solar PV system purchases.
Connecticut is one of the many states that doesn’t charge sales tax on solar panels. This helps lower the out-of-pocket cost you’ll have to pay up-front, which can help more people afford to make the switch.
The average cost of solar panels in Connecticut — before any incentives or rebates — is $21,000. At Connecticut’s 6.35% sales tax rate, the average solar customer saves about $1,334 on sales tax when they purchase a system in the state.
While this probably won’t make or break your ability to purchase a solar energy system, it is an easy incentive to claim, which makes it a no-brainer that all Connecticut residents should take advantage of.
Steps to Claim Connecticut’s Solar Sales Tax Exemption
You might think your solar purchase is automatically exempt from sales tax, but unfortunately, that’s not the case. To claim the solar sales tax exemption, you must submit Certification Form CERT-140, which you can find on the Connecticut Department of Revenue Services website here.
- Print out Certification Form CERT-140 from the Connecticut Department of Revenue Services website.
- Fill out the form. Your solar contractor will help you fill out the “Description” section.
- Present the form to the seller when you purchase the system. In practice, your solar contractor will walk you through the process, and since they’re the seller, the process is very easy.
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Which Solar Incentives Are Offered at the Local Level in Connecticut?
Connecticut’s state-level incentives are great, but they’re not the end of the story. Connecticut also has several local incentives that are administered by local governments and are available to the residents of certain municipalities.
Here’s a quick rundown of Connecticut’s best local incentives:
- PACE Financing Programs: Property Assessed Clean Energy (PACE) financing lets Connecticut residents go solar with zero up-front costs using a government loan. The loan gets paid back through increased property taxes, which means that the loan gets transferred to the new owner if you sell your house. Local governments handle these programs, so the details and application process varies based on where you live.
- Building Permit Fee Waivers: The State of Connecticut allows local governments to pass laws exempting Class I renewable energy projects from permitting fees. These fees can cost anywhere between $50 and $150, depending on where you live. Your solar installation company should be able to help you determine whether your local government waives permit fees for home solar projects.
- Shared Clean Energy Facility (SCEF) Program: Connecticut public utilities providers Eversource and United Illuminating administer a community solar program that makes solar power accessible to residents who cannot or choose not to install rooftop solar on their homes. These shared facilities help reduce the state’s reliance on fossil fuels while simultaneously saving homeowners money on energy costs by letting them purchase energy from localized shared solar installations. The availability of SCEF programs and community solar varies throughout the state.
Net Metering in Connecticut – Can You Profit?
Net metering, or net energy metering (NEM), is a program that lets you sell the excess energy your solar panels generate back to the grid for a credit. You can then use that credit it offset your electric bill when your panels aren’t producing energy, like at night or on cloudy days.
The best net metering programs pay customers at the retail rate, which is the going electricity rate you pay when you purchase energy from your electric company. Unfortunately, many states, including Connecticut, are moving away from full retail rate net metering as local governments react to increased interest in the solar industry.
Connecticut is changing its net metering policy, which it calls the Residential Renewable Energy Solutions program. Anyone who installs a solar energy system from now until 31 December 2027 can choose between two different compensation schemes: Buy-All or Netting.
How much you get paid for your system’s excess energy production depends on what electric company you have, which rate structure you choose, and whether or not you live in low-income households or a distressed municipality. The following table breaks down the various combinations:
| Buy-All Rates ($/kWh) | Netting Rates ($/kWh) | ||
| Incentive Rate | REC Rate | ||
| Eversource | $0.2943 | Retail Rate | $0.0318 |
| United Illuminating | $0.2943 | Retail Rate | $0.0000 |
| Low-Income Adder | $0.030 | $0.025 | |
| Distressed Municipality Adder | $0.0175 | $0.0125 | |
Interpreting the information in the above table can be confusing, so it helps to have a concrete example. If you choose the Buy-All rate structure and have Eversource or United Illuminating, you earn $0.2943 per kilowatt-hour (kWh) your system produces above your home’s energy consumption. The average 7.5-kW system produces roughly 625 watts per month, which means you earn $183.94, minus how much energy your home uses.
Connecticut’s decision to replace its net metering program with the Residential Renewable Energy Solutions tariff program is causing some residents to consider adding energy storage to their system by installing a solar battery. It is unclear what the net metering or net billing policy will be in Connecticut after 2027, so having your own battery storage solution is a great way to guarantee that you’ll continue to be able to use any excess energy your system produces.
Steps to Enroll in Net Metering in Connecticut
Connecticut used to offer a net metering program, but it was replaced with the Residential Renewable Energy Solutions Program I described above in 2021. Your solar installer will connect your solar panels to the electric grid and sign you up for the program, so you don’t have to do anything yourself.
If you’re interested in seeing what the interconnection process entails, you can find the relevant information here for Eversource and here for United Illuminating.
Watch Out For Solar Incentive Scams in Connecticut
As residential solar continues to grow in popularity, you must be more careful to avoid the increasing number of solar incentive scams. Most scams are easy to avoid if you know what to watch out for, so I’ll briefly describe the three types of scams you’re most likely to encounter in Connecticut.
- Fake incentives: The easiest fraud to perpetrate — and therefore the most common type of scam you’ll see — is a fake incentive scam. The scammer solicits solar customers to apply for an enticing incentive, charging a small application fee. Of course, the incentive doesn’t really exist, and you never hear from the scammer again after you pay the application fee. You can avoid this scam by researching solar incentives and going through official channels for any incentives you apply for. Your solar installer should help you find and apply for the incentives you qualify for (find out how to avoid solar panel scams).
- Overcharging for equipment: Some low-quality solar companies charge exorbitant prices for solar installations, preying on homeowners who don’t know any better. The average cost of a solar panel array in Connecticut is $21,000 before incentives. If you get a quote much higher than that amount, you should shop around to see if you can get a better deal elsewhere. I recommend getting quotes from this curated list of the best solar installers in Connecticut.
- Exaggerated incentives: This is less insidious than a fake incentive scam, but it’s also more difficult to detect if you don’t know what to look for. Some companies will exaggerate the amount of money you can save with solar panels by misrepresenting the price of their solar systems to include the money you’ll save after incentives. Make sure you get a detailed breakdown of the total cost of your solar system — including installation costs — before you sign any contracts.
Bottom Line: Do the Incentives in Connecticut Make Going Solar Affordable?
Solar incentives help keep the cost of going solar in Connecticut manageable. Solar systems are more expensive in Connecticut than most states on a dollar-per-watt basis, so it’s essential to take advantage of the state’s many solar incentives and financing programs to keep costs down.
After the federal ITC, Connecticut’s average solar panel system cost drops from $21,000 to just under $15,000. You can then use one of the state’s solar financing programs to get a no-money-down low-interest loan or take advantage of the state’s sales tax exemption to purchase your system in full with cash.
Paying cash will save you more money in the long run, so it’s the method I recommend to anyone who can afford it. Solar leases and power purchase agreements (PPA) lower up-front costs but limit lifetime solar savings, so they’re best avoided unless they’re your only option. Connecticut has enough state incentives to make leases and PPAs avoidable for many residents.
Read also: How to Afford Clean Energy with Incentives
FAQs about Connecticut’s Solar Rebates and Incentives
What are the solar incentives for CT?
Connecticut has several solar incentives available to its residents, including the federal ITC, property tax exemption, sales tax exemption, the Residential Renewable Energy Solutions program, and several state and local solar financing programs.
Does Connecticut have a net metering policy?
Yes, sort of. Connecticut had a net metering policy until 2021, when it transitioned to the Residential Renewable Energy Solutions program. The net billing program lets residents choose between two different rate structures that determine how they get compensated for the extra energy their systems produce. The compensation for the excess energy your panels produce varies depending on the rate structure you choose and the utility company you have.
What is the cost of solar in Connecticut?
Connecticut’s average 7.5-kW solar system cost is $21,000 before any incentives. The federal ITC lets you claim 30% of the total cost of a solar system as a tax credit, which effectively brings the cost down to $14,700. Solar panel purchases are exempt from sales tax in Connecticut, which saves you an additional $1,300 compared to what you’d have to pay in a state that doesn’t have a solar sales tax exemption.
