Connecticut Solar Incentive Programs

Helping your Connecticut business afford the transition to solar energy.

If you’re a commercial business owner in Connecticut, you should know about the commercial solar incentives available to businesses that install solar energy systems. Here are summaries of the major Connecticut solar incentive programs.

Connecticut Solar Incentive Programs

ZREC

The zero emission renewable energy certification (ZREC) program is a state incentive in which United Illuminating (UI) or Eversource pays you a fixed electricity price for every kilowatt-hour (kWh) of additional electricity your solar panel system produces. How do you access the ZREC credit? First, your solar project must fall into one of the following size-based eligibility categories:

  • Large ZRECs: Projects ranging from 250 kW to 1,000 kW capacities
  • Medium ZRECs: Projects less than 250 kW but larger than 100 kW.
  • Small ZRECs: Projects smaller than 100 kW.

If your project falls into one of these categories, it will be put into a lottery drawing. If it’s selected, you’ll be awarded a ZREC contract from either Eversource or UI, and you’ll be able to contribute your solar project’s extra electricity to the community. Since the ZREC is Connecticut’s only direct monetary incentive, you can use its funds to pay back your solar installation costs or other, similar energy costs. When you participate in the Connecticut ZREC program, you contribute your renewable energy to the community, and you receive compensation that can help you pay off and maintain your solar energy system.

C-PACE

The Connecticut Green Bank sponsors the Commercial Property Assessed Clean Energy (C-PACE) program, which allows you to finance a renewable energy project over time. How does this work? Through the C-PACE program, you receive a voluntary benefit assessment on your property tax bill. Then you can repay your project’s cost over time along with your property taxes. This incentive enables you to make your facility more energy efficient while you pay off the installation and create more predictable energy expenses for your business.

Property Tax Exemption for Renewable Energy Systems

When you install a solar energy system, this tax exemption prevents you from paying additional taxes on your facility’s increased value. That allows you to reap the benefits of your installation without making you pay extra for it, which in turn makes your solar project more affordable to install and maintain.

Find Out If You Qualify for Incentives

Our solar team can help you determine if you’re eligible for certain Connecticut incentive programs.

Additional Connecticut Incentive Programs

Federal Solar Tax Credit (ITC)

The federal Investment Tax Credit has been renewed for 2020 at a rate of 26%. If you purchase your solar energy system outright, you’ll be eligible to have that 26% incentive deducted from your federal income taxes. This incentive option can make it more feasible and appealing to purchase your solar array outright, as other purchasing options aren’t eligible for this tax credit.

Modified Accelerated Cost-Recovery System (MACRS)

MACRS is a national incentive that allows businesses to recover their renewable energy project investments through depreciation deductions. This system sets up different class lives and schedules for renewable energy project depreciation. Most solar energy systems fall into the five-year schedule. If your system was acquired and installed between Sept. 27, 2017, and Jan. 1, 2023, you can receive a bonus depreciation of 100% because of The Tax Cuts and Jobs Act of 2017. This system can help make your project more feasible by helping you recover the costs of your investment over time.

Net Metering

Net metering is a process that connects your solar energy system to the power grid so your system can distribute any excess energy it produces into the grid, which sends that energy back into the community. For the moment, net metering still exists in Connecticut, but it’s being phased out after Connecticut lawmakers passed legislation to dismantle it. This legislation was considered controversial when it was passed, since net metering has been successful here in Connecticut and elsewhere. However, the opponents of net metering say it’s an inefficient way of generating electricity, and that it presents more costs than benefits for taxpayers, and that’s the opinion that prevailed with lawmakers.

Utility companies are developing replacements for net metering, and they include lower electrical rates they will pay to solar customers for excess power generation. They are currently calling these rates tariffs.

On the other hand, if you installed your solar array before the date the legislation was passed, you’ll be grandfathered into the new system, and you can still use net metering until Dec. 31, 2039.

Helping You Navigate Your Incentives

Our team at Verogy helps you navigate these tax credits and incentives so you can reduce your energy costs, increase your bottom line, and make the most of your solar investment. We’re here to make sure your Connecticut business becomes energy efficient through renewable energy.

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