With the rising cost of electricity and Connecticut’s push for clean energy, solar power is increasingly attractive for homeowners and businesses. Fortunately, there are numerous solar incentives, tax credits, and rebates available to make the transition to solar more affordable. In this guide, we’ll explore the key programs and policies for 2025 and how they can help you install solar power systems in Connecticut.
Connecticut has been aggressively promoting solar energy to meet its renewable energy goals. For you, this means a variety of financial incentives to reduce the initial cost of solar system installations. From the federal solar tax credit to state-level financing programs, there are plenty of ways to make solar power more affordable.
Federal Solar Investment Tax Credit (ITC)
The Residential Clean Energy Credit—formerly the federal investment tax credit (ITC)—provides a 30% credit on the total cost of installing solar panels, including equipment, labor, and permitting fees.
How it works for Connecticut residents
For a 6 kW system, the typical PV installation cost in Connecticut is approximately $18,000. With the federal solar tax credit, homeowners can reduce that cost by 30%, which amounts to $5,400. This lowers the total system cost to $12,600.
Here’s the breakdown:
- System cost: $18,000
- ITC credit (30%): $5,400
- Final cost after ITC: $12,600
Keep in mind that the credit only applies to purchased systems, either through cash or a solar loan. Leasing or entering into a Power Purchase Agreement (PPA) isn’t eligible for the ITC.
How to claim the ITC
- You must purchase your solar system, either with cash or a solar loan (leasing doesn’t qualify).
- File the appropriate forms with your federal income tax return.
- Ensure you have a high enough tax liability to benefit from the credit (credits can be rolled over to future years if needed).
State-level solar incentives and rebates
Connecticut offers a range of state incentives to complement the federal ITC. These include sales and property tax exemptions, as well as state-run programs designed to help you go solar.
Residential Renewable Energy Solutions (RRES) program
The program offers two main options for Connecticut residents: the Netting Tariff and the Buy All Tariff.
- Netting Tariff: Similar to net metering, this allows you to earn credits for any excess electricity sent to the grid, which you can use to offset future utility bills. The credit is provided at the current per-kWh retail rate (which can vary by rate plan) charged by the two main utilities, Eversource and United Illuminating.
- Buy-All Tariff: You send all the electricity generated by your solar system to the grid, earning credits at a fixed rate of $0.3189 per kWh. You can either apply these credits to your utility bill or receive quarterly payments.
Sales and use tax exemption for solar and geothermal systems
Connecticut exempts solar panel systems from sales tax, which can save homeowners about 6.35% on system costs. For example, a $18,000 system would save around $1,143 with this exemption.
Property tax exemption for renewable energy systems
Connecticut also provides a property tax exemption, meaning that adding solar panels to your home won’t increase your property tax assessment, even though they increase your home’s value.
Smart E-Loan program
The Connecticut Green Bank’s Smart-E Loan program provides low-interest financing for energy-efficient home improvements, including solar panels.
Loan terms (2025)
- 5 years: 6.99% APR
- 7 years: 6.99% APR
- 10 years: 6.99% APR
- 12 years: 7.49% APR
- 15 years: 7.99% APR
- 20 years: 7.99% APR
One advantage of this loan is that you can use up to 25% of the funds for non-energy-related home improvements. For example, if you need to repair or replace your roof before installing solar panels, you can use the loan to cover a portion of those costs.
How do I get a rebate for solar panels in Connecticut?
Connecticut no longer offers direct rebates for solar installations. The Residential Solar Investment Program (RSIP) was phased out, and the Residential Renewable Energy Solutions (RRES) Program took its place.
However, rebates for battery storage systems are still available. The Energy Storage Solutions Program offers up to $7,500 in rebates for eligible battery systems, helping you pair solar installations with energy storage.
Net Metering in Connecticut
Though traditional net metering in Connecticut is no longer available, the state’s Residential Renewable Energy Solutions (RRES) program provides similar benefits. Under the Netting Tariff, excess solar energy that you send to the grid earns credits to offset future energy costs. These credits can roll over indefinitely, making it a more advantageous program than the previous net metering system.
The Buy All Tariff allows homeowners to sell all the solar energy they produce back to the utility at a set price. Homeowners can choose to receive this as a bill credit or a cash payout.
Estimated cost savings in Connecticut
The exact savings from switching to solar depend on various factors, including system size, location, and energy usage. However, a typical 6kW solar panel system in Connecticut costs about $18,000. After applying the 30% Residential Clean Energy Credit, the cost reduces to $12,600. Add state incentives like the sales tax and property tax exemptions, and the overall savings increase even further.
The long-term savings on energy bills make solar an even more attractive investment. Over the life of your solar system, your energy cost savings could easily exceed tens of thousands of dollars.
For a typical 6 kW system costing $18,000, here’s how much you could save with available incentives:
- System cost: $18,000
- Federal Solar Tax Credit (30%): $5,400
- Sales Tax Exemption (6.35%): $1,143
- Net Cost after incentives: $11,457
By taking advantage of both federal and state incentives, Connecticut homeowners can significantly reduce their overall solar investment. These incentives reduce the cost of installing solar panels by approximately 36%, making it much more affordable for Connecticut homeowners.
Payback periods and long-term savings
One of the reasons going solar in Connecticut makes a lot of sense is the relatively short payback period for system installation cost, thanks to the combination of federal and state incentives and high electricity costs. As we noted above, the final upfront cost for a typical 6 kW system after factoring in federal and state tax incentives is around $11,457.
Calculating the payback period
Connecticut has some of the highest electricity rates in the country, averaging around $0.24 per kWh. A 6-kW solar system in Connecticut on average produces about 7,200 kWh annually. This translates to:
7,200 kWh/year X $0.24/kWh = $1,728/year in savings.
$11,457 / $1,728 ≈ 6.6 years
So, in roughly 6.6 years, your system will be paid off.
Long-term savings
After the system has paid for itself, the remaining lifespan of the system (approximately 18+ years) is pure savings. Over 25 years, homeowners can save tens of thousands of dollars in electricity costs (in this example, it’s over $43,000!), even accounting for a small annual degradation in system efficiency (around 0.5% per year), which will likely be offset by expected increases in electricity rates.
Choosing the right solar system
When it comes to designing the right system, it’s essential to consider your home’s current and future energy needs along with available incentives. The size of your new solar system should be tailored to your electricity consumption now and in years to come, ensuring it can meet all your energy requirements.
Additionally, most solar companies in Connecticut offer battery storage solutions that complement solar panels and maximize energy efficiency. Enphase can help you achieve your energy goals, whether you’re looking to reduce your monthly bills, achieve greater energy independence, or both. Connect with us and we will connect you with expert solar installers offering Enphase solar and battery installation services.
Maximize your savings with solar incentives
Connecticut offers a variety of incentives that make solar energy affordable for residents. From the federal solar tax credit to the Residential Renewable Energy Solutions Program, these programs can substantially reduce the cost of solar installations while providing long-term savings on electricity bills. Whether you're considering rooftop solar or energy storage solutions, now is the perfect time to take advantage of these programs.
Frequently Asked Questions on Connecticut solar incentives, tax credits and rebates
Can you get free solar panels in Connecticut?
No, but financial incentives such as the federal solar tax credit and sales tax exemptions can significantly lower the cost of solar installations.
Is it worth going solar in Connecticut?
Yes, due to the high electricity rates and generous incentives, going solar in Connecticut can yield substantial long-term savings.
Are there local utility rebates for solar panels in Connecticut?
While there are no longer rebates for solar panels, rebates for battery storage systems are available through the Energy Storage Solutions Program.
What is the Energy Storage Solutions Program?
This program offers up to $7,500 in rebates for battery storage systems installed in conjunction with solar panels.
What are the benefits of the Netting Tariff?
The Netting Tariff allows homeowners to earn credits for excess solar energy, which roll over indefinitely, reducing electricity bills over time.
What financing options are available for solar in Connecticut?
The Smart-E Loan from the Connecticut Green Bank is a popular option, offering competitive interest rates and flexible terms.
How do I qualify for solar tax exemptions in Connecticut?
You can qualify for both sales tax and property tax exemptions as long as your solar system is used for renewable energy and installed at your residence.
