Power Purchase Agreement (PPA)

The most common path to "free" solar is a Power Purchase Agreement directly between you and a state-licensed solar energy company. Under a "PPA", the solar company absorbs the full cost of the solar panel equipment and installation for you.

The solar company is technically the owner of the equipment, however, they are responsible for providing you with electricity produced from your home for a guaranteed fixed rate (unlike the unpredictable rising costs of traditional utilities). They are also responsible for any continued maintenance or repairs the solar system may require.

This can be a great option if you don’t want to buy or simply can’t afford buying the solar panels outright. Even though the homeowner isn’t purchasing the actual solar system, they still enjoy the benefits of solar energy and save money on their electricity bills.

Connecticut State Solar Programs

The Residential Solar Investment Program (RSIP) offered rebates before 2022, but it was replaced by the Residential Renewable Energy Solutions Program in 2023. Instead of offering rebates, this program pays you for all of the electricity produced from your solar system via the Buy-All Tariff, a new form of “net metering”.

With the Buy-All Tariff, your local power company purchases all the electricity produced by your solar panels. The customary tariff is 29.43 cents/kWh, although low-income households get a bonus of 3 cents/kWh. For comparison, the average electricity price in Connecticut is 34.32 cents/kWh. The Buy-All Tariff is similar to a Power Purchase Agreement, but in this case, you’re the seller and your local electric company is the buyer.

Connecticut’s Renewable Energy Solutions Program also offers another net metering plan for homeowners to choose from called the Netting Tariff.

The Netting Tariff works like a traditional net metering program in which you export only the excess energy that you don’t use. Unused credits roll over to the next month, and each kilowatt-hour is subtracted from your energy bills at full retail price. If you accumulate power bill credits over a 12-month period, the power company pays you at the avoided cost.

Considering how specific each program is to the details of your home, we strongly suggest you speak with a local solar expert to review all of your best options.

Additional Financial Benefits

In addition to these programs, there are many financial benefits for homeowners in Connecticut who switch to solar energy. Some of the biggest incentives and benefits are:

Federal Tax Credit: Formerly known as the Solar Investment Tax Credit (ITC), this program was extended in 2022 and renamed the Residential Clean Energy Credit. Homeowners who install solar can claim a massive federal tax credit worth 30% of the gross system cost (including panels, related equipment, wiring, installation, permits, and fees). That means that if the gross system cost is $20,000, your federal tax credit would be a whopping $6,000!

Multiple Tax Exemptions: Homeowners with solar can receive a property tax exemption for the value of their system. This allows homeowners to increase their property values without increasing their taxes. The state also applies a Sales Tax Exemption to the purchase of the system, so residents won't have to pay the 6.35% CT state sales tax. So if your solar energy system costs $20,000 total, you’ll save an additional $1,270 off taxes!