For a while now, Connecticut has been one of the hottest states for solar. With great rebates, net metering rules, and tax exemptions, it’s no wonder that solar production in the state has more than tripled in the last few years, or that it earned 3rd place in our 2015 State Solar Rankings report. But as with every state that has seen such amazing gains in solar power adoption, some of the best incentives are slowly going away.
That’s right, folks, the gravy train is losing steam: Connecticut is paying less in direct rebates to homeowners who go solar. Last year’s rebate was up to $1,250 per kW of installed solar panels, and now it’s been reduced to $675 per kW. But the fact that the state is paying anything in rebates is great (so many states don’t), and an investment in solar in Connecticut is still better than almost anywhere else in the country.
Also, two things: $675 per kW is nothing to sneeze at, and the 30% federal investment tax credit on a 5-kW system actually goes UP by $750, because it’s calculated after rebates are applied. Lower rebates means bigger tax credit. Boom.
And here’s another fun fact: the cost to install solar today is about HALF of what it was just 4 years ago. That, coupled with still-great rebates from Connecticut, means that everyone interested in going solar should get quotes from installers now.
Let’s take a look at the numbers:
|Old numbers||New numbers|
|Payback Time:||7 Years||8 Years|
|Profit over 25 years:||$38,129||$36,379|
|Internal Rate of Return:||21.36%||17.25%|
As you can see, the rebate amount makes a difference, but ultimately, an investment in solar in Connecticut will result in a rate of return of 17.25%—that’s double the returns of a similar investment in an index fund pegged to the S&P 500.
If you’re a Connecticut homeowner, in light of the above facts, you owe it to yourself to read a little more about how much money you can save with solar.
Last modified: February 10, 2015