Until recently, Connecticut’s state incentives for solar were primarily confined to the residential sector, according to a release from Ross Solar Group. That meant there was very little interest from commercial clients in going solar. Ross worked with the state to develop new commercial incentives.
“These days, with the availability of property assessed financing and utility-based REC programs, going solar in Connecticut is calculable, low-risk and immediately rewarding,” according to the release.
Commercial property owners in Connecticut have access to the same 30 percent federal tax rebate and 25 percent accelerated tax deprecation that business owners in other states get. By itself though, it wasn’t quite enough to create consistent growth if the commercial solar market, according to the release.
The state has two major incentives for commercial businesses to install solar panels, according to the release from Ross. The first is a renewable energy credit system that allows renewable energy producers to sell their renewable energy credits to businesses that need them – namely the investor-owned utilities that are required to get 20 percent of the power they sell from renewable sources by 2020.
“Unlike REC programs in other states where the rate changes from month-to-month, this ZREC price remains fixed for 15 years,” according to the release. “This is a calculable, reliable, bankable number.”
While that incentive has been in place since the state adopted its renewable energy portfolio standard in 2005, there is one new development in Connecticut that Ross Solar Group says it expects will make commercial solar installations more common.
Several municipal governments in the state are adopting Commercial Property Assessed Clean Energy financing, which will allow commercial property owners to borrow from the state’s Clean Energy Finance and Investment Authority, which will attaché a special property tax assessment on the business’ building in order to repay the debt. The additional property tax expense is offset by the 15-year guaranteed REC payment, according to Ross.
“The major benefit of the CPACE program is that the federal tax credits and depreciation are still available for the business owner to monetize,” according to the release. That’s something that would be missing from the more common third-party-owned or power purchase agreement financing models. “The system is repaying its own tax bill and the system owner keeps the tax credits.”