Connecticut electricity prices average $0.21/kWh, more than 50% above the national average of just under $0.14/kWh. Solar accounts for nearly 2% of the state's power generation, more than ¾ of which came from rooftop solar in 2019.
The average cost of a 7.5kW (equivalent to saving almost 150 trees a year) solar power system starts around $22,000 in Connecticut. Before any incentives, in the first year you’d save about $1,900, compared to if you had been paying the normal rates for the energy you used. These savings can continue for well over 25 years, improving with inflation.
This depends on may factors such as your system size, power output, and financing. Here are the main ways you can finance your home solar power system, and the kinds of returns you may expect to see:
From our example above, the homeowner purchased a 7.5kW system to offset their energy bill. Overhead cost was $22,000, with a significant proportion returned in the first year through incentives, rebates, and savings, then paying itself in full over 8 years.
Most solar power systems have a warranty lifetime of 25 years. In that time, between incentives and paying lower rates you could make a profit of about $50,000 - more than twice the up-front cost of the system!
Even with occasional maintenance or part replacement, that is a massive savings. Solar panel power output falls on average 0.8% per year, so with a little TLC and load management you can extend the life of your system well beyond the warranty’s expiration date, continuing to save indefinitely.
Whether or not you can afford the up-front cost of the install, you may want to consider a Home Equity Line of Credit (HELOC). With equity in your home, or good credit, you may qualify for a 15-year solar HELOC with fixed rate of 4% or lower.
Starting with that same 7.5kW system costing $22,000 but with zero up-front cost, accounting for incentives, credits, rebates, and annual energy savings starting around $1,800, you could see a revenue surplus of about $6,500 at the end of the first year.
It's very likely that at first your loan payments will slightly exceed your power savings. Before the term is up, rate increases should mean that you are making a net profit by about halfway into paying off the loan. Once the loan is paid off, you can expect to save about $3,000 a year. Over 25 years you could expect to make about $41,000.
With a Power-Purchase Agreement (PPA) the homeowner leases their roof to an outside party, usually a power company. Generally PPAs feature a fixed price per kWh, with either a fixed term or an annual escalator.
With a PPA, the cost of installation, repair, and maintenance to the homeowner is usually $0.00. For that 7.5kW system, with a PPA you could expect to save about $60/month on energy. Over 25 years, you could see NEARLY $20,000 in revenue - without accounting for inflation. That’s technically an infinite return!
PPA’s can be complicated, as you are effectively ceding at least some control of your home to the third party, but they are an excellent way to get into solar because they have no overhead.
Data from DSIRE. For more info visit: https://www.dsireusa.org/
|Name||Implementing Sector||Program Type||Administrator||DSIRE ID|
|Alternative Fueled Vehicle Charging Station Credit||State||Corporate Tax Credit||Connecticut Clean Energy Fund||129|
|Fuel Mix and Emissions Disclosure||State||Generation Disclosure||239|
|Property Tax Exemption for Renewable Energy Systems||State||Property Tax Incentive||Connecticut Department of Revenue Services||240|
|New Energy Technology Program||State||Industry Recruitment/Support||Connecticut Department of Energy and Environmental Protection||1046|
|Green Power Purchase Plan||State||Green Power Purchasing||1078|
|Sales and Use Tax Exemption for Energy-Efficient Products||State||Sales Tax Incentive||Connecticut Department of Revenue Services||1247|
|Energy Efficiency Requirements for State Government||State||Energy Standards for Public Buildings||2390|
|Sales and Use Tax Exemption for Solar and Geothermal Systems||State||Sales Tax Incentive||Connecticut Department of Revenue Services||2613|
|Local Option - Property Tax Exemption Cogeneration Systems||State||Property Tax Incentive||Locally administered||2624|
|Sales and Use Taxes for Items Used in Renewable Energy Industries||State||Industry Recruitment/Support||Connecticut Department of Revenue||4552|
|Local Option - Building Permit Fee Waivers for Renewable Energy Projects||State||Solar/Wind Permitting Standards||4958|
|Local Option - Commercial PACE Financing||State||PACE Financing||Connecticut Green Bank||5321|
|The United Illuminating Company - Small ZREC Tariff||Utility||Performance-Based Incentive||United Illuminating||5358|
|CT Solar Loan||State||Loan Program||Connecticut Clean Energy Finance and Investment Authority||5405|
|Local Option - Property Tax Exemption for Renewable Energy Systems||State||Property Tax Incentive||Connecticut Department of Revenue Services||5423|
|Copy of CT Clean Energy Communities||Local||Green Power Purchasing||5639|
|Multifamily Energy Conservation Loan Program||State||Loan Program||5730|
|Low Interest Energy Efficiency Loan Program (Electric and Gas)||Utility||Loan Program||5735|
|Commercial and Industrial Kitchen Equipment Rebate Program||Utility||Rebate Program||5737|
|(Electric and Gas) Residential Rebate Program||Utility||Rebate Program||5738|
|(CHIF) Home Energy Solutions Loan Program||State||Loan Program||5739|
|Xcel Energy - Express Energy Efficiency||Utility||Rebate Program||5767|
|Renewable Energy Investment Fund||State||Public Benefits Fund||5787|
|United Illuminating Company - Energy Opportunities Program||Utility||Energy Analysis||United Illuminating Company||13886|
|U.S. Department of Energy - Industrial Assessment Center (IAC): University of Massachusetts||Federal||Energy Analysis||U.S. Department of Energy||16288|
|ISO New England - Demand Resources||Other||Energy Analysis||ISO New England Inc.||16290|
|United Illuminating Company - Business Energy Solutions||Utility||Energy Analysis||United Illuminating Company||16396|
|United Illuminating Company - Retro-Commissioning (RCx)||Utility||Energy Analysis||United Illuminating Company||16397|
|Northeast Energy Efficiency Council - Building Operator Certification (BOC)||Other||Training and Information||Northeast Energy Efficiency Council||16501|
|EnerNOC - Energy Procurement||Other||Energy Analysis||EnerNOC||17229|
|Southern Connecticut Gas - Energy Conscious Blueprint Program||Other||Energy Analysis||Southern Connecticut Gas||17237|
|Southern Connecticut Gas - Energy Opportunities Program||Other||Energy Analysis||Southern Connecticut Gas||17238|
|Southern Connecticut Gas - Operation & Maintenance Program||Other||Energy Analysis||Southern Connecticut Gas||17239|
|Eversource - Energy Savings Plan||Utility||Energy Analysis||Eversource||21981|
|Energize Connecticut - Energy Conscious Blueprint||Other||Energy Analysis||Energize Connecticut||21983|
|Energize Connecticut - Small Business Energy Advantage||Other||Energy Analysis||Energize Connecticut||21985|
|Northeast Energy Efficiency Partnerships - EM&V Forum||Non-Profit||Training and Information||Northeast Energy Efficiency Partnerships||22025|
|Multifamily Navigator Pre-Development Energy Loan Program||State||Loan Program||CT Green Bank||22044|
|Low-Income Multifamily Energy Loan Program||State||Loan Program||CT Green Bank||22045|
|Zero Interest Energy Efficiency Loan Program (Gas and Electric)||Utility||Loan Program||Eversource Energy, UI, SCG, CNG||22093|