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The Ultimate Guide to Saving Money on Solar Panels in Connecticut

Are you a Connecticut homeowner interested in making the switch to clean, renewable solar energy? You‘re not alone! The Nutmeg State ranks highly for residential solar adoption, with thousands of households already powered by the sun.

While Connecticut may not be the sunniest state (ranking 5th lowest for peak sun hours), the significant financial incentives and benefits available more than make up for it. Between federal tax credits, state rebates, sales and property tax exemptions, and one of the best net metering programs in the country, Connecticut residents have a unique opportunity to dramatically reduce the upfront cost of going solar.

Intrigued? In this comprehensive guide, we‘ll break down all the ways you can save money on solar panels in Connecticut. With the right combination of incentives, installing a solar PV system on your roof has never been more affordable. Let‘s get started!

Take Advantage of the Federal Solar Tax Credit

No matter where you live in the U.S., you‘re eligible for the federal solar investment tax credit (ITC). This generous incentive allows you to claim 30% of your solar installation costs as a credit on your federal tax return. For the average 6 kilowatt (kW) residential system in Connecticut, that equates to over $5,000 in savings!

Here‘s what you need to know:

  • The solar ITC is available for systems installed through the end of 2032
  • In 2033, the credit steps down to 26%
  • In 2034, it drops again to 22%
  • The program is set to expire completely starting in 2035 unless renewed by Congress

To qualify for the maximum 30% credit, your system must be purchased and installed before the end of 2032. If you finance your solar panels with a loan, you can still claim the full credit as long as you own the system (more on that later).

The bottom line? If you‘re considering solar for your Connecticut home, act sooner rather than later to lock in the biggest federal tax credit. Even if you don‘t have enough tax liability to claim the entire credit in one year, you can roll over the remaining amount for up to five years. It‘s a surefire way to dramatically reduce your out-of-pocket costs for going solar.

Maximize State Rebates for Solar in Connecticut

In addition to the federal tax credit, Connecticut offers one of the most generous state-level solar rebate programs in the nation. Through the Residential Solar Investment Program (RSIP) administered by the Connecticut Green Bank, homeowners can receive a lump-sum rebate of $426 per kilowatt of solar installed, up to a maximum of 10 kW.

For a typical 6 kW system, that equates to a rebate check of $2,556 – further reducing your net cost of going solar. Combined with the 30% federal tax credit, the RSIP rebate brings your total incentives to over $7,500 on an average-sized residential installation. That‘s real money back in your pocket!

To qualify for the RSIP rebate, your solar PV system must be installed by an approved contractor and you must agree to share your system performance data with the Connecticut Green Bank. This anonymized data helps the state track progress toward its ambitious renewable energy goals (more on that below).

The RSIP program has already supported the installation of over 40,000 residential solar projects in Connecticut since 2012, but funds are limited and the program won‘t be around forever. To maximize your savings, be sure to apply for your rebate as soon as your system is installed and activated.

Eliminate Sales and Property Taxes on Your Solar Investment

In many states, purchasing a solar PV system comes with two hidden costs: sales tax on the equipment and higher property taxes from the increased value of your home. Fortunately, Connecticut offers a 100% exemption for both, ensuring you won‘t pay a dime in additional taxes for your solar investment.

The sales tax exemption is especially valuable given Connecticut‘s 6.35% sales tax rate. For an average 6 kW system at $2.86 per watt, the sales tax savings alone amount to over $1,000. That‘s money you can put toward your electric bill or other household expenses.

As for property taxes, installing solar panels typically increases your home‘s resale value by 3-4%. With Connecticut‘s statewide property tax exemption for renewable energy systems, you can enjoy that added value without the accompanying tax burden. It‘s a win-win for your wallet and the environment.

Slash Your Electric Bills with Net Metering

Connecticut boasts one of the best net metering programs in the country, allowing solar homeowners to sell their excess electricity back to the grid at the full retail rate. This 1:1 credit on your electric bill helps offset the cost of grid electricity used at night or on cloudy days when your solar panels aren‘t producing enough power to meet your needs.

Here‘s how it works:

  1. Your solar panels produce electricity during the day, first powering your home directly
  2. Any excess electricity is exported to the grid, spinning your meter backwards
  3. You receive a credit on your electric bill for those exported kilowatt-hours at the same rate you pay for electricity
  4. At night or during less sunny months, you can draw power from the grid and use your stored credits to offset the cost

With net metering, your electric meter acts like a virtual battery, storing your excess solar energy with your utility for later use. It‘s an elegant way to maximize the value of your solar investment and reduce your electric bills to just the monthly grid connection fee (currently $9.67 per month for Eversource customers).

Connecticut‘s net metering program is currently set to expire in December 2041, at which point the credit rate for exported solar electricity will likely decrease. That may sound like a long way off, but given the 25+ year lifespan of modern solar panels, it‘s worth considering as you evaluate your long-term savings potential.

See If You Qualify for the Solar for All Program

For low- and moderate-income households, Connecticut offers an innovative lease/power purchase agreement (PPA) option called Solar for All. Administered by the Connecticut Green Bank in partnership with PosiGen Solar, this program allows participating households to install a 6 kW solar PV system for no money down and a fixed monthly payment of $20-35 for 20 years.

The benefits of Solar for All include:

  • Immediate monthly savings on your electric bill
  • A free energy efficiency audit and weatherization upgrades to help further reduce your energy costs
  • Full maintenance, monitoring, and insurance coverage for the duration of the lease
  • The option to purchase the system at a discounted rate at the end of the lease term

To qualify for Solar for All, your household income must be at or below 100% of the area median income (AMI) for your county. For a family of four in Hartford County, that equates to an annual income of $116,100 or less. Participants must also own their home and have a suitable roof for solar installation.

Since launching in 2015, Solar for All has helped over 2,500 low- and moderate-income households go solar, generating over 18 megawatts of clean energy and $8.6 million in lifetime energy savings. If you meet the income qualifications, it‘s definitely worth exploring this innovative program.

The Bottom Line: Is Solar a Good Investment in Connecticut?

With some of the highest electricity rates in the nation (over 21 cents per kilowatt-hour on average), going solar in Connecticut is a smart financial move for most homeowners. Between the 30% federal tax credit, the $426 per kilowatt state rebate, the sales and property tax exemptions, and the robust net metering program, the average solar PV system in Connecticut pays for itself in just 7-9 years.

Considering that most solar panels are warrantied for 25-30 years, that leaves you with decades of free, clean electricity and thousands in avoided utility costs. Over the 25-year lifespan of a typical 6 kW system, the average Connecticut homeowner can expect to save over $35,000 by going solar. That‘s an incredible return on investment!

Of course, your exact savings will depend on a variety of factors, including:

  • The size and orientation of your roof
  • The amount of shade from nearby trees or buildings
  • Your household‘s average monthly electricity usage
  • The specific incentives available in your utility service area

To get a personalized estimate of your solar savings potential, we recommend getting quotes from several reputable solar installers in your area. Most offer free, no-obligation consultations and can help you navigate the application process for state and federal incentives.

One word of caution: while solar leases and PPAs like the Solar for All program can provide immediate savings with no money down, they typically offer lower lifetime savings than purchasing your system outright. If you can afford the upfront investment (or qualify for a $0-down solar loan), buying your solar panels will usually provide the highest return in the long run.

The Future of Solar in Connecticut Is Bright

Connecticut has long been a leader in clean energy, with some of the most ambitious renewable portfolio standards (RPS) in the nation. By 2030, the state aims to generate 40% of its electricity from renewable sources like solar, wind, and hydropower. That goal ramps up to 100% zero-carbon electricity by 2040.

To meet those targets, Connecticut will need to continue incentivizing solar adoption at both the residential and commercial scale. The state has already made huge strides, with over 3,400 megawatts of solar installed as of 2022 – enough to power nearly 375,000 homes.

But there‘s still plenty of room for growth. According to the Solar Energy Industries Association (SEIA), Connecticut currently ranks 22nd in the nation for installed solar capacity per capita. In the coming years, we can expect to see even more innovative programs and incentives to help Connecticut homeowners and businesses go solar.

So if you‘re considering solar for your home in Connecticut, there‘s never been a better time to make the switch. With generous incentives available at both the state and federal levels – and electricity rates only projected to rise in the coming decades – investing in solar now can provide decades of clean energy savings and energy independence.

The sun is shining on solar in Connecticut – will you harness its power?

Frequently Asked Questions About Solar in Connecticut

Q: What is the average cost of solar panels in Connecticut?

A: As of 2023, the average cost of solar panels in Connecticut is $2.86 per watt, or $17,160 for a typical 6 kilowatt system before incentives. After the 30% federal tax credit and the $426 per kilowatt state rebate, the net cost drops to around $9,500.

Q: How long does it take for solar panels to pay for themselves in Connecticut?

A: The payback period for solar panels in Connecticut ranges from 7-9 years on average, depending on your electricity usage and the size of your system. After that, you‘ll enjoy free, clean electricity for the remaining 15-20+ year lifespan of your panels.

Q: Do you need to own your home to go solar in Connecticut?

A: While owning your home is not a requirement to go solar in Connecticut, it does make the process much easier. If you rent your home, you‘ll need to work with your landlord to install solar panels on the property. Some community solar programs allow renters to subscribe to a nearby solar farm and receive credits on their electric bills, but availability is limited.

Q: What happens to my solar panels if I sell my home?

A: In most cases, solar panels increase the resale value of your home and can be a selling point for environmentally-conscious buyers. You can either transfer the ownership of the panels to the new homeowner or remove them and reinstall them on your new property. If you financed your panels with a loan, you‘ll need to pay off the remaining balance before selling your home.

Q: Can I install solar panels myself in Connecticut?

A: While it‘s technically possible to install solar panels yourself in Connecticut, we strongly recommend working with a licensed and insured solar installer. Not only will they ensure your system is designed and installed correctly, but they can also help you navigate the application process for state and federal incentives. Many installers also offer warranties on their workmanship, giving you added peace of mind.