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 depending on your home’s increased value from the solar installation and your local property tax rate. For example, if your solar system 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 installation.

To qualify for this exemption, you must own a solar energy system installed on property you own in Connecticut. The system must be used primarily for generating electricity for your own use. You’ll need to apply for the exemption through your local tax assessor’s office, and it’s important to file the necessary paperwork promptly after your solar installation is complete to ensure you receive the benefit starting with the next tax assessment period.

Connecticut’s Sales Tax Exemption for renewable energy allows businesses in the solar and clean energy industries to purchase 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 turbines, and geothermal systems. The financial benefit equals the full Connecticut sales tax rate (currently 6.35%) on qualifying purchases, which can result in significant savings for businesses involved in clean energy production.

To qualify for this exemption, businesses must be actively engaged in renewable energy and clean energy technology industries, and the purchased items must be used directly in production, research, development, or manufacturing processes. Companies need to present Form CERT-142 to sellers when making purchases to claim the exemption. Important limitations include that this exemption does not apply to services, real property, construction materials for buildings, repair parts, or general administrative equipment. The exemption has been effective since July 1, 2010, with no specified end date, making it an ongoing benefit for qualifying renewable energy businesses in Connecticut.

Connecticut’s Residential Renewable Energy Solutions program offers 1:1 net metering for homeowners with solar panels through both Eversource and United Illuminating Company. This means when your solar system produces more electricity than you use, the excess energy is sent back to the grid and you receive credits on your utility bill at the full retail rate – the same price you normally pay for electricity.

The financial benefit is straightforward: excess solar credits carry over from month to month at full retail value, helping offset future electricity costs. For solar systems installed after January 1, 2022, these credits roll over indefinitely as long as you maintain your utility account at the same address. However, if you installed your system before January 1, 2022, any remaining excess credits are settled annually in March at the utility’s avoided cost rate, which is typically lower than the retail rate. This makes the timing of your solar installation an important consideration for maximizing long-term savings.