The small state of Connecticut has been a model state for solar adoption in the past few years. This has been made possible by a slew of government incentives, among other things, that have made solar power highly lucrative for homebuyers.
However, some of these incentives are being phased out in the next few years. What will be their impact on the affordability and profitability of solar energy to homeowners?
To answer this question better, we must understand the importance of these incentives today.
Government Incentives for Solar System Buyers
Here’s a quick lowdown on the government incentives that have played an instrumental role in solar energy adoption across the state:
- Federal Solar Tax Credit
The federal solar tax credit, which currently stands at 26%, is slated to be available through 2023, and then drop to 10% commercially and 0% residentially.
- Net Metering Law
The future of the state’s strong net metering policy is in question after 2021, which means that homeowners possibly have until the end of 2021 to invest in a solar system and get their net metering locked in until 2041.
- Residential Solar Investment Program
RSIP is one of the main drivers of the affordability of solar panels in Connecticut. It offers a variable incentive based on the household’s pat electricity consumption pattern. The Residential Solar Investment Program is currently $.426/watt installed, up to $4,260.
Although the other incentives are being reduced, homeowners will have this incentive to look forward to.
So yes, solar incentives are one of the primary drivers of solar system affordability, but here are more factors at play.
What Else Is Making Solar Panels Inexpensive?
Did you know how much the cost of solar panels dropped in the last four decades?
Investment in R&D and rising demand for solar panels from a growing number of countries have together pushed down the costs of solar panels to unprecedented levels. And guess what, the trend is set to continue.
Solar panels will continue to get cheaper with each passing year. And, that’s one of the reasons why the state and federal governments have planned the elimination of solar incentives in phases.
Even when the federal tax credit and net metering law are phased out, the RSIP incentives and cost savings in utility bills will continue to make the solar option financially smart and savvy.