Connecticut Solar Panel Incentives: Tax Breaks, Net Metering and More

Residential solar is on the rise in Connecticut.

Although only a small percentage of the state’s energy currently comes from solar, the number of installations is rising, making it one of the “fastest growing of the smaller states” for solar, according to the Solar Energy Industries Association. 

If you’re looking to get in on the action, there are a bunch of state and federal programs that could make solar a more affordable option for you. Whether you need a rebate, a tax exemption or a solar loan, there’s likely something for you. 

Here’s a guide to the solar incentives available in Connecticut. 

Comparing Connecticut incentives for solar panels

Connecticut incentive	Description	Eligibility	Estimated value
Sales tax exemption	Sales tax is waived on the purchase of renewable energy technology	Technology used directly in the production of renewable energy and clean energy	An amount equivalent to 6.35% sales tax in Connecticut
Property tax exemption	Exemption from the rise in property taxes associated with the installation of solar	Solar systems installed since 1976. May vary by municipality.	Depends on your home value and local property taxes
Smart-E Loan	No money down, low-interest loan for home energy improvements	Connecticut residents who live in owner-occupied, 1-4 unit homes	Hundreds or thousands of dollars in savings on loan interest
Norwich Public Utilities Electric Appliance Rebate	Discounts on water heaters and heat pumps, among other appliances	Must be a customer of Norwich Public Utilities	Up to $500
Groton Utilities Rebates	Rebates to offset the cost of insulation, heat pumps and water heaters	Must be a customer of Groton Utilities	$200 to $5,000
Net metering	Payment for excess solar energy sent back to the grid	Requirements listed on the Eversource and UI websites	Monthly savings on utility bills, based on usage and energy production
Federal tax credit	Tax rebate to offset the cost of solar installation	Solar systems installed between now and 2033	Up to 30% of project cost

Connecticut state solar tax credits, exemptions and loan programs

The state government of Connecticut offers a few different programs to make solar installations more attractive. Here’s a rundown.

Sales tax exemption

Since 2010, Connecticut has offered a sales tax exemption on all renewable energy equipment, including solar. (The rebate also applies to things like geothermal and wind power). This would save you the 6.35% sales tax you would otherwise have to pay on the purchase of solar equipment.

Homeowners looking to take advantage of the tax exemption need to fill out a form with the state’s Department of Revenue Services.

Property tax exemption

In addition to waiving sales tax on solar, Connecticut also allows municipalities to exempt homeowners from property tax increases that would result from a rise in home value due to installing solar. Check with your local municipality for details.

Smart-E Loan

The Connecticut Green Bank, a public entity charged with making renewable energy more affordable for residents, offers something it calls the Smart-E Loan.

The Smart-E Loan offers no money down and lower interest rates to fund home energy projects like solar panels. Loans can be a maximum of $50,000 and are available to owner-occupied, residential buildings with one to four units.

Details on rates and eligibility are available on the Green Bank website.

Local rebates for electric appliances and energy efficiency in Connecticut

There are a few local programs in Connecticut that can get you a discount on electric appliances and other clean energy products.

Norwich Public Utilities electric appliance rebate program

Customers of Norwich Public Utilities can get up to $500 off qualifying water heaters and heat pumps. To access this rebate for electric appliances, fill out the form on NPU’s website.

Groton Utilities rebates

Residents who get their power from Groton Utilities are eligible for some rebates on home energy upgrades. The company offers up to $5,000 off attic insulation, $2,500 off heat pump water heaters, and $200 off a smart thermostat

UI rebates

UI customers can snag rebates and discounts on electric appliances and energy efficiency upgrades for air-source and geothermal heat pumps and heat pump water heaters.

Eversource rebates

Connecticut customers of Eversource can receive discounts on energy-saving equipment from heat pumps and heat pump water heaters to smart thermostats and advanced power strips. 

Special loans for solar panels in Connecticut

The main solar loan program offered in Connecticut is the Smart-E Loan, from the Connecticut Green Bank.

The program gives residents no-money-down, low-interest loans for home energy projects like solar panels. Loans can be a maximum of $50,000 and are available to owner-occupied, residential buildings with one to four units.

Federal solar tax credits and incentives for Connecticut residents

On top of the programs offered by Connecticut, residents can also apply for the federal solar tax credit.

Known as the residential clean energy credit, it covers up to 30% of the cost of a solar installation, made between now and 2032. Systems installed in 2033 (26%) and 2034 (22%) receive smaller credits. The program applies to solar, but also water heaters, wind turbines, geothermal heat pumps, fuel cells and battery storage technology.

Because it’s a tax credit, it doesn’t come in the form of a cash payment. Instead, it reduces the amount of money you’ll owe on your taxes.

Connecticut net metering rules for solar energy

When you install solar on your roof, a big benefit is the opportunity to sell extra power you don’t need back to the utility company, an arrangement known as net metering.

In Connecticut, the Public Utilities Regulatory Authority determines net metering rates. There are two different ways to participate in net metering.

• Buy-All Incentive: With this option, customers opt to sell all of their solar energy output to the utility, without first supplying power to their home. Then, customers receive a payment from the utility company for the solar energy, which they can take in cash, or use to offset their bill. The net metering rate for the Buy-All program in 2024 is $0.3189 per kWh.
• Netting Incentive: This option is the more traditional approach to net metering. The solar energy is first used to power the home, and then any excess is sold to the utility. The value of that excess energy is applied to the customer’s bill as a credit to offset future energy bills. The net metering rate for the Netting Incentive program in 2024 is equivalent to the current retail rate.

Check out the Eversource and UI websites for specific eligibility requirements.

Community solar projects in Connecticut

If you can’t install solar on your home, don’t worry: Connecticut is also home to several community solar projects.

Community solar allows residents to subscribe to a piece of the output of a large solar farm nearby. In return, customers get a reduction in their energy bill, all while supporting clean energy. (Some plans, typically run by utilities, don’t save you money, so be sure you understand the program before enrolling.)

Eversource, a utility company in Connecticut, allows its customers to subscribe to community solar directly. Eligibility is determined by income and your ability to install solar at your home. There is no cost, and you should receive a credit on your bill. Most enrollments will be automatic.