{"id":10674,"date":"2023-03-31T21:01:13","date_gmt":"2023-03-31T21:01:13","guid":{"rendered":"https:\/\/www.solar.com\/learn\/?p=10674"},"modified":"2026-01-14T17:35:36","modified_gmt":"2026-01-14T17:35:36","slug":"connecticut-solar-incentives","status":"publish","type":"post","link":"https:\/\/www.solar.com\/learn\/connecticut-solar-incentives\/","title":{"rendered":"Connecticut Solar Incentives: Are Solar Panels Worth It in Connecticut?"},"content":{"rendered":"

Connecticut isn\u2019t the sunniest state, but between solar incentives and high electricity prices, there\u2019s plenty to gain by powering your home with solar panels.<\/p>\n

In this article, we\u2019ll explore the solar incentives available in Connecticut and crunch the numbers to see if solar panels are worth it for the average homeowner.<\/p>\n

Let\u2019s dive in with a recap of the tax credits, exemptions, and programs that can reduce the cost of going solar in the Constitution State.<\/p>\n

Easily compare multiple quotes from vetted local installers.<\/a><\/p>\n

 <\/p>\n

Solar incentives in Connecticut<\/h2>\n

There are three main incentives available in Connecticut that can reduce the cost of solar panels.<\/p>\n

We\u2019ll walk through each incentive below and show how it would reduce the cost of a 5 kW solar system with a gross price of $25,000.<\/p>\n

Sales and property tax exemptions<\/h3>\n

The first incentive that would kick in for a solar system in Connecticut is the sales tax exemption that applies to residential solar, geothermal, and other distributed clean energy technologies.<\/p>\n

The sales tax exemption applies to the 6.35% state sales tax. For a $25,000 system, that amounts to $1,587.50 that you won\u2019t <\/em>pay in sales tax.<\/p>\n

Then, there is a property tax exemption on the value the solar system adds to your home<\/a>. This is an underrated solar incentive, because typically increasing your home value means paying higher property taxes. But, given the exemption, you can power your home with solar panels without worrying about increasing your property tax rate.<\/p>\n

In order to claim the property tax exemption<\/a>, the homeowner must \u201capply to the town’s assessor or board of assessors by November 1st in the assessment year.\u201d<\/p>\n

Related reading:\u00a0<\/strong>The Benefits of Solar Panels in Fairfield County, Connecticut<\/a><\/p>\n

Federal solar tax credit<\/h3>\n

The biggest solar incentive in Connecticut \u2013 and most states \u2013 is the Residential Clean Energy Credit. Also known as the federal solar tax credit<\/a>, this incentive is worth 30% of the price paid for a solar system, installation, and soft costs.<\/p>\n

So, for our $25,000 solar system, the credit would be worth $7,500 and effectively reduce the cost to $17,500.<\/p>\n\n\n\n\n\n\n
<\/td>\n<\/td>\n<\/tr>\n
Price paid<\/td>\n$25,000<\/td>\n<\/tr>\n
Federal tax credit (30%)<\/td>\n-$7,500<\/td>\n<\/tr>\n
Net cost<\/td>\n$17,500<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

It\u2019s important to note that the tax credit is not <\/em>a check that automatically comes in the mail. Rather, it\u2019s a credit that can be claimed on your federal tax return and used to reduce your tax liability. If you don\u2019t have sufficient tax liability to claim the entire credit, it can be rolled over and claimed over multiple tax years.<\/p>\n

Consult a licensed tax professional with questions about claiming the Residential Clean Energy Credit.<\/em><\/p>\n

Net metering and RECs in Connecticut<\/h3>\n

The final solar incentives in Connecticut are net metering and RECs, which are now offered through the Residential Renewable Energy Solutions program.<\/p>\n

The Residential Renewable Energy Solutions program replaced net metering and the Residential Solar Investment Program (RISP) in Connecticut on January 1, 2022 and will run for six years until December 31, 2027.<\/p>\n

Under the new program, customers of Connecticut’s two major utility providers \u2013 Eversource and United Illuminating (UI) \u2013 have two tariff options for being compensated for their solar production: Netting and Buy-all.<\/p>\n

Netting option<\/h4>\n

The Netting option is very similar to net metering<\/a>, in that solar owners use their own solar production first, and then receive retail rate credit for the excess electricity their system pushes onto the grid. These credits are used to offset the cost of using grid electricity and can be carried over and cashed out when the program ends.<\/p>\n

In addition, Netting customers also earn direct payments for renewable energy credits (RECs) for their production at a fixed rate for 20 years. In 2023, the REC rate is 3.18 cents per kWh for Eversource customers, and 0.00 cents per kWh for United Illuminating customers.<\/p>\n

So, if our 5 kW system produces 5,880 kWh of electricity per year, here\u2019s how much a Connecticut solar owner could expect to earn through RECs.<\/p>\n\n\n\n\n\n\n\n
Utility provider<\/td>\nREC rate ($\/kWh)<\/td>\nREC earnings per year (5,880 kWh)<\/td>\nREC earnings over 20 years<\/td>\n<\/tr>\n
Eversource<\/td>\n$0.0318<\/td>\n$187<\/td>\n$3,740<\/td>\n<\/tr>\n
United Illuminating<\/td>\n$0.00<\/td>\n$0.00<\/td>\n$0.00<\/td>\n<\/tr>\n
Low-income adder<\/td>\n$0.025<\/td>\n$147<\/td>\n$2,940<\/td>\n<\/tr>\n
Distressed municipality adder<\/td>\n$0.0125<\/td>\n$73.50<\/td>\n$1,470<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

The Netting tariff option has two \u201cadders\u201d that can increase REC rates for customers with low income and living in distressed municipalities. Low income is defined as<\/a> below 60 percent of the state median income and the list of distressed municipalities can be found here<\/a>.<\/p>\n

So, a typical Eversource customer could earn $187 from RECs per year for a total of $3,740 over 20 years. That would effectively reduce the cost of the system to $13,760.<\/p>\n\n\n\n\n\n\n\n
<\/td>\n<\/td>\n<\/tr>\n
Price paid<\/td>\n$25,000<\/td>\n<\/tr>\n
Federal tax credit (30%)<\/td>\n-$7,500<\/td>\n<\/tr>\n
20 years of RECs<\/td>\n-$3,740<\/td>\n<\/tr>\n
Net cost<\/td>\n$13,760<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

While it takes time to accrue, RECs through the Netting option can be a very valuable solar incentive in Connecticut.<\/p>\n

 <\/p>\n<\/gs-injectable>\n

 <\/p>\n

Buy-all option<\/h4>\n

The Residential Renewable Energy Solutions program also offers a \u201cBuy-all\u201d option. In this structure, the utility provider buys all the electricity <\/em>produced by the solar system at a fixed rate for 20 years, and the homeowner continues to purchase electricity through the utility.<\/p>\n

Buy-all customers can choose to be compensated with an on-bill credit, with cash payments once per quarter, or a mixture of the two.<\/p>\n

In 2023, the Buy-all rate is 29.43 cents per kWh for both Eversource and United Illuminating customers, and includes low-income and distressed municipality adders. Here\u2019s how that adds up for our 5 kW system generating 5,880 kWh per year.<\/p>\n\n\n\n\n\n\n\n
<\/td>\nBuy-all rate $\/kWh<\/td>\nBuy-all compensation per year (5,880 kWh)<\/td>\nBuy-all compensation over 20 years (117,665 kWh)<\/td>\n<\/tr>\n
Eversource<\/td>\n$0.2943<\/td>\n$1,730<\/td>\n$34,628<\/td>\n<\/tr>\n
United Illuminating<\/td>\n$0.2943<\/td>\n$1,730<\/td>\n$34,628<\/td>\n<\/tr>\n
Low-income adder<\/td>\n$0.030<\/td>\n$177<\/td>\n$3,530<\/td>\n<\/tr>\n
Distressed municipality adder<\/td>\n$0.0175<\/td>\n$103<\/td>\n$2,059<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Now, there are two very important things to remember about the Buy-all option:<\/p>\n

    \n
  1. The homeowner purchases all of their electricity through the utility in the Buy-all option. So, the $1,730 annual compensation sounds like a sweet deal, but you need to subtract your annual electricity costs<\/li>\n
  2. The buy-all rate is fixed for 20 years, but electricity prices are not. So, the current Buy-all rate may offset your electricity bill for the first few years, but eventually electricity prices will rise while the Buy-all rate stays flat<\/li>\n<\/ol>\n

    Buy-all or Netting option in Connecticut?<\/h3>\n

    With that in mind, the Netting tariff is likely the safer and more lucrative option for most homeowners. The graph below shows the cumulative cost of a 5 kW solar system in the Netting tariff versus the Buy-all tariff. As electricity prices rise, the Buy-all tariff becomes the more expensive option, while the slow-and-steady Netting tariff provides greater savings.<\/p>\n

    \"netting<\/p>\n

    It\u2019s worth noting that both options are much less expensive than going without solar panels, as we\u2019ll see below.<\/p>\n

    Are solar panels worth it Connecticut?<\/h2>\n

    Connecticut may not have the most sun or solar incentives, but, at 23.50 cents per kWh, it does have some of the highest electricity prices in the country<\/a>. And high electricity prices are a key ingredient for solar savings.<\/p>\n

    The chart below shows the cumulative cost of buying a 5 kW solar system versus buying a comparable amount of electricity from a utility provider for 20 years.<\/p>\n

    \"solar<\/p>\n

    By paying cash, an average homeowner in Connecticut could expect to save over $23,000 over the 20-year Netting program (although the system would continue producing for much longer). Taking out a 15-year solar loan cuts down the payback period to front-load the bill savings, but comes with lower lifetime savings.<\/p>\n

    Either way, it\u2019s well worth buying solar panels in Connecticut to reduce your electricity costs alone. And that\u2019s just the tip of the iceberg.<\/p>\n

    Additional reasons to go solar in Connecticut include:<\/p>\n