Solar Guide

Connecticut’s Property Tax Exemption for solar energy systems allows homeowners to exclude the added value of their solar installation from their property tax assessment. This means that while your solar panels may increase your home’s overall value, you won’t pay additional property taxes on that increased value. The exemption applies to both residential and commercial solar energy systems installed on your property.

The financial benefit varies based on your local property tax rate and the value of your solar system. For example, if your solar installation adds $20,000 to your home’s value and your local property tax rate is 2%, you would save approximately $400 per year in property taxes. This exemption continues for as long as you own the solar system, providing ongoing annual savings throughout the life of your investment.

To qualify for this exemption, your solar energy system must be properly installed and operational on your Connecticut property. You’ll need to file the appropriate paperwork with your local tax assessor’s office to claim the exemption. The system must be used primarily for generating electricity for your property, and standard solar panel installations on homes typically meet all eligibility requirements without additional restrictions.

Connecticut’s Sales Tax Exemption for renewable energy equipment allows businesses in the solar and clean energy industry to purchase qualifying equipment, materials, and supplies without paying the state’s sales tax. This exemption applies to items used directly in researching, developing, testing, or manufacturing renewable energy technologies like solar panels, wind systems, and geothermal equipment.

The financial benefit equals Connecticut’s current sales tax rate (6.35%) saved on eligible purchases. For example, a solar company purchasing $100,000 in qualifying manufacturing equipment would save $6,350 in sales tax. To claim this exemption, businesses must present Certificate CERT-142 to sellers and use the purchased items predominantly (more than 50%) in renewable energy activities. The exemption has been effective since July 1, 2010, with no expiration date mentioned.

Important limitations include that this exemption only applies to businesses engaged in renewable energy industries, not individual homeowners purchasing solar systems for their homes. The exemption covers tangible items like machinery, equipment, tools, materials, and fuel, but excludes services, real property, construction materials for buildings, and general office supplies. Homeowners should note that a separate solar system exemption exists under a different Connecticut statute for residential installations.

Connecticut’s Residential Renewable Energy Solutions program offers 1:1 net metering for homeowners with solar panels. This means when your solar system produces more electricity than you use, the excess energy is sent back to the grid and you receive full retail rate credits on your utility bill. These credits can be carried over from month to month, helping offset your electricity costs during times when your solar panels aren’t producing enough power to meet your home’s needs.

The financial benefit depends on when your solar system was installed. If you installed your system after January 1, 2022, any unused credits will roll over indefinitely until you move or close your utility account – giving you maximum flexibility to use your solar credits over time. However, if your system was installed before January 1, 2022, any remaining credits are settled annually in March at the utility’s avoided cost rate, which is typically lower than the retail rate. This program is available through both major Connecticut utilities: Eversource and United Illuminating Company, making it accessible to most homeowners across the state who choose to go solar.