Connecticut Solar Power Rebates, Tax Credits, and Incentives

Connecticut College, Waterbury

Solar Legislator Score:

UPDATED 12/30/09

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 – including solar power. Since Connecticut businesses are important economic drivers in the state, legislators decided to support energy progressive business owners. A corollary objective was to educate consumers on benefits of clean energy.

The CCEF was created in 2000 with those aims in mind, 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 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

The “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. That amounts to quite a chunk of change in your pocketbook. The program is described here.

Since 2007, Connecticut has offered a 100% property tax exemption for renewable energy. The exemption applies to just about everything under the sun (pun intended): 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. Details here.

The CCEF “On-Site Renewable DG Program” provides state grants to support the installation of systems generating electricity at commercial, industrial and institutional buildings, including schools and local and state governments. Photovoltaics 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.

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. More info is available here 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 businesses for using virtually any clean energy technology:

Each grant is limited to $10,000. However, it’s worth checking into if you’re a Connecticut business owner. Further information is available through the OPM.

Several state loan programs are listed below:

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

The CT Solar Lease Program provides zero-money down, 15 to 20 year solar lease.  Not a bad deal, unless you plan to move within the next 15 years. If not, the lease can be transferred to a new owner. Aside from income restrictions, this program has been known to shut down temporarily when it reaches its yearly funding.

The “CCEF Solar PV Rebate Program” provides fairly generous rebates on residential photovoltaic (PV) systems up to 10 kW in size. Maximum rebates are $15,000 for residential installations. Currently, the rebate amount is $1.75/DC watt for the first 5kW, and $1.25/watt there after, up to 10kW. See example below.  Details here.

A sales and use tax exemption for solar applies to solar water heat, solar space heat and PV. The 100% tax exemption, available to commercial, residential, and general public/consumer sectors, became began 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 and PV installs up to 2 mW in generating capacity. You get a credit for excess power generated that is applied to your next month’s bill; or purchased by your utility at the end of a 12-month billing cycle at an avoided-cost rate. Section 16-243h contains provisions of the act.

EXAMPLE OF A 5KW DC PTC RESIDENTIAL SOLAR INSTALLATION

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.

For a current $100/month electric bill, a solar installation of 5ooo watts (5 kw watts) will cost about $35,000 and offset about 87% of the home’s current electrical needs.  $35,000 may sound high, but that’s BEFORE rebates and incentives, which make going solar in Connecticut far outweigh the cost:

• Expected state rebate: $7,938
• 30% Federal Solar Investment Tax Credit: $8,119

Estimated NET cost: $18,943

• Average new monthly utility bill with solar: $15.37/month in the first year. Remember how it used to be an average $100/month? Nice.
• Payback period based on electric rates and 5%/year escalation: 12.7 years (Remember that solar PV  systems last 20 to 25 years or more.)
• Exempt from property tax increases due to solar improvement: YES
• Increase in Property Value: $16,300 to $34,743
• Greenhouse Gas (CO2) Saved 5,233 lbs of CO2 per year or like planting 17,621 sq.ft. of trees a year.

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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