Connecticut experiences a temperate climate with approximately 200 sunny days annually, providing a decent amount of sunlight for solar energy endeavors. While it may not have as many sunny days as some other states, Connecticut’s weather conditions still allow for viable solar power initiatives. The state has several solar incentives and rebates available to help residents save money on their solar energy systems. Here are some of the incentives available to Connecticut home and business owners:
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Federal Investment Tax Credit (ITC)
Commercial solar energy systems installed in Connecticut can take advantage of the Federal Investment Tax Credit 48E, which provides a tax credit of 30% of the total cost of the system, provided prevailing wage and apprenticeship requirements are met.
Residential systems can no longer claim any federal solar tax credit, as the One Big Beautiful Bill eliminated it for systems installed after January 1st, 2026.
Commercial Depreciation
Commercial asset owners can write off 100% of a project’s value in depreciation in the first year. The One Big Beautiful Bill reinstated the 100% bonus depreciation, while simultaneously eliminating the Modified Accelerated Cost Recovery System (MACRS) that previously depreciated solar energy systems over 5 years.
The depreciable basis of a project is reduced by half of the ITC value when combined with the 30% ITC. Here’s a quick example:
- Project cost = $800,000
- 30% credit = $240,000
- Reduced depreciation basis: $800,000 – ($240,000 / 2) = $680,000
A company’s tax rate is then taken into account to calculate the exact amount they’re able to write off.
Smart-E Loans:
Smart-E Loans offer long-term, low-interest financing for energy efficiency and clean energy upgrades to Connecticut homes and businesses. The program offers a variety of financing options, including unsecured loans up to $40,000 with terms up to 10 years and secured loans up to $250,000 with terms up to 20 years.
Property Tax Exemption:
Connecticut offers a property tax exemption for renewable energy systems, including solar installations. This exemption means that the added value of your solar panels will not increase your property taxes.
Sales Tax Exemption:
Connecticut offers a sales tax exemption for solar energy systems. This means that you won’t have to pay sales tax on the purchase of your solar panels.
Connecticut Solar Rebates and Tax Credits:
The state of Connecticut offers a variety of solar incentives and rebates to help residents save money on their solar energy systems. The Connecticut Residential Renewable Energy Solutions Program offers rebates of up to $3,000 for residential solar installations. The state also offers a sales tax exemption for purchasing machinery, equipment, and installation of solar energy systems. According to the law, you don’t have to pay sales tax on your solar modules, racking, and inverters because they are directly involved in the production of electricity.
Further information and programs can be found at the Programs.Dsireusa.org
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