Residential Solar Power in Connecticut

We've dug deep into CT's state incentives and built a complete guide to solar power options for the residents of Connecticut

Solar Power in Connecticut

Though Connecticut is one of the smaller states, it was ranked 14th nationally for solar installation capacity increases in 2015. The associated 91 MW of solar capacity increase brought the total capacity in the state to 265 MW, an amount that can power 36,000 households. The state supports just under 150 solar-oriented companies within its borders, including 38 manufacturers and 36 installers.

General support throughout state government is high, making it easier for homeowners to experience the benefits associated with going solar for their energy needs. And higher utility costs associated with electricity, it is no surprise that many individuals are considering making the switch.

However, going forward with a solar installation is a serious matter. Installation costs are notable, including expenses related to equipment and installation. Often, this means it is an investment decision that shouldn't be taken lightly.

But the initial startup costs shouldn't be the only factor when it comes to deciding if installing a solar energy system is right for you. To help you make a sound decision, here are some details about the solar power industry in Connecticut, as well as incentive programs that might make it the right choice for you.

Support for Solar throughout State Government

The state of Connecticut has decided to make increasing the available of alternative energy sources a priority. In fact, their goal is to achieve a rate of 27 percent by the year 2020. Since the standards for creating renewable energy are high, many utility companies offer strong incentives to homeowners to help them meet the minimum Renewables Portfolio Standard.

Connecticut Local Rebates & Credits:

Local RebatesUp to $9,400
Tax CreditsNone :(
Performance PayoutsPayments for ZRECs
Property Tax Exemptions100%
Sales Tax Exemptions100%
To get specific data on your home, enter your zip code:

Solar energy is part of the Class I category for alternative energy within the state, making it a fairly high priority for companies that need to meet the standards set forth by the government. And this fact can produce favorable conditions for homeowners looking to make the leap.

While there is no RPS solar carve-out specifically in place, so utility companies are welcome to explore other renewable energy sources, such as wind power, to meet the Class I requirement of 20 percent by 2020, solar is often an easier choice for homeowners looking to pursue alternatives to traditional utility services for their electricity needs.

Incentives Offered by the State of Connecticut

To meet renewable energy objectives, Connecticut offers a variety of programs designed to make solar energy systems more affordable for citizens of the state. One program involves the Smart-E loan, a no money down, low-interest loan program that can be used towards the costs of qualified installations.

Additionally, there are two incentive models to help mitigate costs even further. For those looking for upfront cost reductions, the Expected Performance Based-Buydown (EPBB) provides funds based on the anticipated characteristics associated with an installation. These payments are sent directly to the qualified contractor involved with the installation, so the reduction in cost is experienced immediately.

The exact incentive available through the EPBB program depends on the tier of service you will be expecting. For example, an installation of up to 10 kW can receive an incentive of $0.513/watt depending on consumption levels during the previous 12 months. In addition, some installations that feature components manufactured in the state may receive an additional five percent bonus or higher for parts manufactured in specific areas in the state that are deemed distressed municipalities. The details of the calculations are available online, so a homeowner can determine the estimated size of the incentive prior to beginning a project.

A second program involves a Performance-Based Incentive (PBI) that can help interested homeowners complete an installation with limited if any, upfront cost. Installations are completed and owned by an approved third-party. Effectively, the homeowner rents their property, or roof, to this third-party. The homeowner enters into a contract with the business that results in lower utility costs. It is important to note that the homeowner does not own the system that is installed, so the full benefit of its solar capacity is not realized by the homeowner.

The state also exempts the value of solar energy systems when determining a homeowner's property taxes, and sales tax are generally not owed for purchases related to the installation.

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Local Connecticut Homeowner Incentives

Additional incentives may also be available from local sources, including individual utility companies and municipalities. Most utility companies support interconnectivity agreements, making it easy to integrate your solar power installation into the larger power grid. This means any excess power that is not needed for your home can be sent to the grid for compensation. Often, this system is referred to as net metering.

Net metering measures the amount of energy you use versus what your solar energy system produces. Amounts in excess of your usage give homeowners access to payments from the utility company as compensation for the access to your additional power. As of 2017, Connecticut supports full-price credits for all energy generated by your solar system. For those who produce power in excess of their needs, the payment from the utility company can actually get quite high, especially based on the higher energy costs for those living in the state.

Federal Incentives for Residential Solar Installations

While the state of Connecticut does not offer tax incentives, the federal government does. And these tax credits are available to any qualified homeowner located throughout the country. As of 2017, the federal tax credit equals 30 percent of the qualified costs, and the tax credit is not limited to a maximum. That means you will receive the full 30 percent regardless of how high the total ultimately reaches.

Additionally, homeowners who do not use the full value of their tax credit during the first tax year can carry it to the subsequent tax year. This means that individuals with low tax liabilities have the opportunity to enjoy their benefit over two tax years.

However, it is important to point out that the federal tax credit is only available for homeowners who install qualifying solar energy systems on the primary residence. Vacation homes and rental properties do not qualify for the incentive.

Further, while the tax credit is set at 30 percent for 2017, the percentage will change in the coming years. Installations that occur between January 1, 2019, and December 31, 2020, will receive a tax credit in an amount equal to 26 percent of the costs associated with a qualifying installation. Then, between January 1, 2021, and December 31, 2021, the tax credit value falls to 22 percent.

Beyond December 31, 2021, there is no specified tax credit for homeowners who install solar power systems. While that doesn't mean an incentive won't be approved for installations after that date, there is no guarantee one will be available.

Connecticut Electric Bill Savings

Since the state of Connecticut has the 2nd highest average electricity prices in the nation, it's no wonder many residents consider alternative energy solutions for their homes. As of 2017, the average rate charged was $0.21 per kWh. Based on the average amount of electricity consumed in a household over the course of a year of approximately 10,812 kWh that equals an annual utility bill of over $2,270 for electricity alone.

Figures that high make it easy to understand the potential value of solar to the average household. For example, if a homeowner installs just one 250-watt panel that receives four hours of full sun every day, they will generate 1 kWh each day, or 30 kWh in a 30 day month. That equals a savings of $6.30 over 30 days from that single panel, or $76.65 each year.

For installations that include five panels, the 30-day savings reaches $31.50, or a total of $383.25 on a yearly basis. Increase that installation to 20 panels, and the savings are $126 and $1,533 respectively. For a homeowner interested in covering all of their electrical needs, based on the average consumption rate across the U.S., 30 panels can save $189 during a 30 day month, or a full $2,299.50 every year.

Now, these numbers are just provided as estimates, so each homeowner's actual savings can vary. Different solar panels have varying ranges of efficiency, and the exact location of one's home can easily impact the amount of full sun each panel receives during the day. Often, a qualified installer can help you review the potential for your system based on the idiosyncrasies associated with your property and the available panels for your installation.

Further, you will need to review your electric bills to determine your actual usage over the course of a month or year to determine the size of installation needed to meet your needs.

Return on Solar Investment in Connecticut

A homeowner's return on investment depends on a variety of details regarding their installation, as well as the value of incentives for which one may qualify. However, if you consider the cost savings on utility bills alone, you can see how many years are required to cover the costs associated with an installation.

For example, if your household uses the average amount of electricity (based on the national average) and your installation costs $15,000, it would take approximately six and a half years to recoup the costs. However, if you qualify for additional incentives, you may realize profits much earlier even after factoring costs related to maintenance.

Considering the average solar energy system can last 20 or more years with only minimal maintenance, it is easy to see the appeal of solar in Connecticut. The potential savings will quickly rise into the tens of thousands of dollars over the life of your system if your usage is similar to averages. Still, the decision remains a personal one. Review your electricity usage and speak with a qualified contractor. Then, hopefully, you will feel suitably equipped to make that decision.

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