Connecticut Commercial Solar Incentives

FEDERAL INCENTIVES

Federal Business Energy Investment Tax Credit

This is a corporate federal tax credit for business property where a taxpayer may claim a credit of 30% on qualified solar electric expenditures through December 31, 2016. There is no cap on this tax credit through the end of 2016. If the federal tax credit exceeds the tax liability, the excess amount may be carried forward to the next taxable year. The excess credit can be carried forward until 2016, but it is undetermined if the unused tax credit can be carried forward after then.

Modified Accelerated Cost-Recovery System (MACRS) + Bonus Depreciation

Under the Modified Accelerated Cost-Recovery System, the federal government allows a 5-year accelerated depreciation for a variety of photovoltaic equipment and systems.  Tax legislation, enacted in December 2010, included 100% first-year bonus depreciation for eligible photovoltaic projects placed in service between September 9, 2010 (retroactively) through December 31, 2011. 

Renewable Energy Grant

Taxpayers who are eligible for the federal business Investment Tax Credit (ITC) may instead receive a grant from the US Treasury Department in lieu of taking the business ITC. The tax credit or the grant would both be 30% of the qualified solar electric expenditure. Grants are available for eligible solar equipment and systems placed in service in 2009, 2010 or 2011, or placed in service by January 1, 2017 if construction began in 2009, 2010, or 2011.

STATE INCENTIVES

ARRA Commercial Solar PV Program

This is a state grant program for commercial, industrial, non-profit, and public PV projects.  The payout of the grant will be determined by the Connecticut Clean Energy Fund (CCEF) based on a reasonable time to breakeven compared to purchasing the electricity from the utility.  Projects must be between 50 kW and 200 kW and intended for on-site generation.  Applications will be accepted on a rolling basis until the funding is exhausted.  See the CCEF website for additional details on eligibility and application requirements.

On-Site Renewable Distributed Generation (OSDG) Program

This is a state grant program for commercial, industrial, non-profit, low-income residential, institutional and public PV projects in CL&P and UI service territories.  The payout of the grant will be determined by the Connecticut Clean Energy Fund (CCEF) based on a reasonable time to breakeven.  Projects must be between 10 kW and 200 kW and intended for on-site generation.  To qualify for the current round of funding, proposals must be submitted by February 7^th, 2011.

Property Tax Exemption

Connecticut offers 100% property tax exemption for certain renewable energy systems, including photovoltaics, that generate electricity for commercial and industrial use. An authorized person at the company must file an exemption claim with the assessor or board of assessors in the town in which the property is placed on or before the first day of November in the applicable assessment year.

Sales and Use Tax Exemption

Connecticut provides a 100% sales and use exemption for solar systems, with no expiration date. Both the cost of the equipment and the labor for the installation are eligible for this exemption. Consumers purchasing the solar equipment and services must complete form CERT-140 at the time of purchase and provide that to their solar contractor.

Low-Interest Loans for Customer-Side Distributed Resources

Long-term low-interest financing is available for the installation of customer-side distributed resources, including photovoltaics. Customer-side distributed resources include “(A) the generation of electricity from a unit with a rating of not more than sixty-five megawatts on the premises of a retail end user within the transmission and distribution system including, but not limited to, fuel cells, photovoltaic systems or small wind turbines, or (B) a reduction in the demand for electricity on the premises of a retail end user in the distribution system through methods of conservation and load management, including, but not limited to, peak reduction systems and demand response systems.” Financing is only available for Connecticut Light and Power and United Illuminating customers with solar projects between 50 kW and 65 MW.

UTILITY INCENTIVES

Net Metering

Net metering is open to customers of United Illuminating Company and Connecticut Light and Power that generate photovoltaic electricity. System capacity is capped at 2 MW for all customers. Net metering allows customers to get credit for the full retail value of the electricity their solar electric system generates. Under this agreement, the customer’s electric meter tracks the surplus electricity generated by the solar electric system and the electricity that the customer consumes. The customer is only billed for the net amount of electricity they use.

OTHER COMMUNITY PROGRAMS

New Generation Energy – Community Solar Lending Program

New Generation Energy is a New England non-profit that offers low-interest loans for the installation of solar electric systems through its Community Solar Lending program. The solar loans are available to small businesses and non-profits in New England with a preference given to those in low and middle income communities. The interest rate is currently 5%, although better terms may be given to those who are awarded grants. Interest rates are subject to change at any time.