The federal government and several state governments have set up multiple financial incentives, including tax credits, to motivate homeowners to buy residential solar. Residents of Durham, CT can also avail many of these incentives to reduce their upfront investment burden and get higher returns from their investment. Let’s take a quick look at some of the tax credits and related incentives available to Durham residents.
Federal Tax Credit (ITC)
A flat 26% federal tax credit is available for all homeowners who go solar and/or install battery storage. The tax credit is being phased out in a staggered schedule, so homeowners considering solar should act now and fast if they want to take complete advantage of this incentive.
Sales Tax Exceptions
Unlike the ITC incentive, the sales tax incentives are not rebates that you can claim later. It’s an upfront discount on all your solar installation purchases – the PV cells, inverters, meters, everything. You can even throw in battery storage and get a sales tax exemption on it.
Property Tax Exemption
Your solar installation is an important value addition to your property value. a Berkeley National Laboratory study found that for every kW of solar capacity added to your home, your property value increases by $5,000. That’s more than the cost of the solar panels and installation itself.
Interestingly, this addition in value does not come at the cost of increased taxes. Any value appreciation in your property resulting from solar installation is exempt from property taxes.
State Solar Tax Credit
Unfortunately, there’s no solar tax credit offered by the state of Connecticut. However, there are other exciting incentives available in the state to make up for them. We’ll get to them in the following sections.
Connecticut has replaced its erstwhile net metering policy with a superior Renewable Energy Solutions Program that offers solar buyers two options – a netting tariff and a buy-all option.
The netting tariff option works quite similar to its predecessor, the net metering program. The customers are compensated at a fixed rate for the power they divert to the grid. Subscribers of netting tariffs also get paid for the renewable energy certificates (RECs) they generate for 20 years.
Alternatively, they can also choose the ‘buy all’ option, wherein they dump all the solar energy generated by their system into the grid. The utility company will pay them a fixed rate as determined by the PURA.
Bonus: Energy Storage Solutions
If you want to add battery storage to your solar system, then you couldn’t have been in a better state. Connecticut’s own Energy Storage Solutions offers two incredible incentives. Firstly, there’s a one-time rebate offered on the total installed capacity, which is calculated at the rate of $200 per kWh of storage capacity, with a cap of $7,500.
There’s also a performance-based incentive. Customers get rewards of up to $200 per kW depending on the season and system age.