Connecticut Solar Power Rebates, Tax Credits, and Incentives

Solar Legislator Score:

STATE LEGISLATION
The Connecticut Clean Energy Fund was created by PA 98-28, an act which restructured the state’s electrical utility industry to permit retail competition. A provision in the act established a small surcharge to be added to consumer electric bills, providing funding for grants and other incentives to promote renewable energy technologies. It was also felt that Connecticut businesses would be important participants in evolving technologies, and supporting them with money for R&D would be good for the state’s economy. A third objective was to educate consumers about the benefits of clean energy, and to encourage the use of renewable/sustainable energy sources. The CCEF was created in 2000, but that was neither the beginning nor the end of Connecticut’s significant efforts to address its energy needs with solar power and other renewables. A host of rebates, grants, and other incentives, and their continuing progress on the solar front earn the state’s legislators a solar rating of “Excellent”.

STATE INCENTIVE PROGRAMS, UTILITY REBATES, UTILITY LOANS, and UTILITY INCENTIVES

Mass Energy – Renewable Energy Certificate Incentive is a program under the Energy Consumers Alliance of New England (ECANE) which purchases Renewable Energy Certificates from solar-electric power generation in Connecticut’s commercial, industrial, residential, nonprofit, schools, and institutional sectors. ECANE will purchase the RECs for 3 cents/kWh for a period of three years, and become a marketable item thereafter. The program is described here.
Effective October 1, 2007, Connecticut offers a Property Tax Exemption for Renewable Energy Systems applicable to just about everything under the sun: passive solar space heat, solar water heat, solar space heat, photovoltaics, landfill gas, wind, biomass, hydroelectric, fuel cells, geothermal heat pumps, tidal energy, wave energy, and ocean thermal. This is an exemption of 100% available to the following sectors: commercial, industrial, residential, multi-family residential, and agricultural. (Note: exemption for Class I resources applies only to 1-4 unit residential.) Details here.
The CCEF – On-Site Renewable DG Program provides state grants to support the installation of systems that generate electricity at commercial, industrial and institutional buildings, including schools and local and state governments. Photovoltaics, landfill gas, wind, biomass, fuel cells, small hydroelectric, tidal energy, wave energy, and ocean thermal systems qualify for grants up to $4 million (plus other incentives) out of a program budget of $32.75 million. Onsite Renewable DG provides further info.
A program initiated in December of 2004, the CCEF – Project 100 Initiative also provides grants from the Connecticut Clean Energy Fund for solar thermal electric, photovoltaics, landfill gas, wind, biomass, fuel cells, small hydroelectric, tidal energy, wave energy, and ocean thermal installations. Commercial, renewable energy project developers are eligible. Terms and conditions at Project 100.

The DPUC - Capital Grants for Customer-Side Distributed Resources, was established in July of 2005. This program rewards retail end-user customers of electric distributors who (A) install photovoltaic and other clean energy generators on their premises, and (B) who reduce energy consumption through conservation and other methods. This applies to commercial, industrial, residential, nonprofit, schools, agricultural, and institutional sectors, as well as local, state and federal governments. Awards can be up to $500/kW on installations with a 65 mW maximum capacity. More details here.
Another grant program is offered by the Connecticut Office of Policy and Management to encourage and reward the commercial sector for the development of virtually any type of new clean energy technology:

The OPM – New Energy Technology Program. The grant is limited $10,000, and the fund that supports is $50,000. Further information on the program is available at OPM.
Several State Loan Programs are listed below, with links to the Dsire database which will provide program details:

• CCEF – Operational Demonstration Program
• CHIF – Energy Conservation Loan
• DPUC – Low-Interest Loans for Customer-Side Distributed Resources

A CCEF – Solar PV Rebate Program provides generous rebates on Photovoltaic systems up to 10 kW in size to residential, nonprofit, local and state government, multi-family residential, and institutional sectors. Maximum rebates are $46,500 for residential installations and $50,000 for government and non-profit organizations. Details here.
A Sales and Use Tax Exemption for Solar and Geothermal Systems applies to solar water heat, solar space heat, photovoltaics, and geothermal heat pumps. The 100% tax exemption, available to commercial, residential, and general public/consumer sectors, became effective July 1, 2007. HB 7432 (Sec. 68, 69) provides the applicable statutes.
Net Metering Rules have been in effect since 1998, and apply to solar thermal electric, photovoltaics, landfill gas, wind, biomass, fuel cells, municipal solid waste, small hydroelectric, tidal energy, wave energy, and ocean thermal installations up to 2 mW in generating capacity. Eligible sectors include commercial, industrial, residential, general public/consumer, nonprofit, schools, local, state, and federal governments, multi-family residential, agricultural, and institutional. Utility customers receive a credit for excess power generation that is applied to the next month’s bill; or purchased by the utility at the end of a 12-month billing cycle at an avoided-cost rate. Section 16-243h contains provisions of the act.

EXAMPLE RESIDENTIAL SOLAR INSTALLATION

The Dominion of New England in America (1686-1689) was an unpopular government imposed by King James II, who attempted to impose a tighter control over the Colonists. The Connecticut Colony stood alone in refusing to surrender its charter, a hard-won document from James’ predecessor, King Charles II, granting the Colonists an unusual degree of self-government. According to legend, the Connecticut Colony’s charter was hidden, at least temporarily, in a large oak tree. This became known as the “Charter Oak Incident”, and its importance is marked by the image of the Charter Oak on the 1999 Connecticut commemorative quarter. Although the tree fell during a violent storm in 1856, a monument now marks the spot where it once stood in the city of Hartford.

Hartford has served as state capital several times since Connecticut statehood in 1788, but continuously since 1875. It is the third-largest city in Connecticut and in the heart of the state’s largest metro area containing a population of over one million.

We’ll consider a residential solar installation here, where Connecticut Light & Power is the major provider. The state’s customers use an average of 9,660 kWh of electricity at a rate of 13.64 cents/kWh, numbers which argue favorably for the economics of solar power. To cut conventional power usage by half, a solar installation will require about 450 square feet of roof area and will cost $40,500 (a midrange price estimate that includes both equipment and installation charges). That may sound high, but the benefits of going solar in Connecticut far outweigh the cost, as you will note below:

• Expected state rebate: $18,225
• Federal tax credit: $2,000

Estimated NET cost: $20,275

• Exempt from property taxes: YES
• Increase in Property Value: $16,300 to $34,743
• 25-year Utility Savings: $34,199 to $72,894
• Greenhouse Gas (CO2) Saved over 25-year system life: 99.0 tons

CONSENSUS

The above listing of incentives and the resulting impact on solar installation costs say it all. Keep up the good work, Connecticut.

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