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The federal 25D tax credit is dead. With $0 credit for cash/loan buyers, PPA and lease have become far more competitive in Connecticut. Here are the real 2026 numbers for all 5 financing paths — including the truth about Smart-E rates.
11 kW System
~$31,570
Federal ITC
$0
Smart-E Solar APR
6.99-7.99%
PPA Sec 48 ITC
30%
Federal Residential Solar Tax Credit (Section 25D) Expired December 31, 2025
CT homeowners who purchase solar with cash or a Smart-E loan receive $0 in federal tax credits. PPA/lease providers can still claim Section 48/48E (30%) through July 4, 2026. Is solar still worth it?
Five ways to go solar in Connecticut — ranked by 25-year total savings. The right choice depends on your budget, risk tolerance, and how long you plan to stay.
Upfront: $28,600 - $34,100 · Monthly: $0 · Payback: 8-10 years
Homeowners with capital who plan to stay 10+ years
Upfront: $0 down · Monthly: $310-367/mo (10-15yr) · Payback: 11-14 years
Homeowners who want ownership with $0 down through CT Green Bank
Upfront: $0 · Monthly: Per-kWh rate (10-20% below retail) · Payback: Immediate savings
Homeowners wanting immediate savings with no risk or maintenance
Upfront: $0 · Monthly: $120 - $200 fixed/mo · Payback: Immediate savings
Homeowners wanting predictable monthly costs
Upfront: $0 · Monthly: Subscription fee (offset by bill credits) · Payback: Immediate savings
Renters, condos, shaded roofs, or anyone who cannot install
Based on a typical 11 kW system at $2.87/W ($31,570) in Connecticut. All numbers reflect post-25D-expiration reality.
| Feature | Cash | Smart-E | PPA | Lease | Community |
|---|---|---|---|---|---|
| Upfront Cost | $28.6-34.1K | $0 | $0 | $0 | $0 |
| Monthly Cost | $0 | $310-367 | Per kWh | $120-200 fixed | Credit on bill |
| Federal ITC | $0 (25D dead) | $0 (25D dead) | 30% (Sec 48) | 30% (Sec 48) | Varies |
| You Own System | Yes | Yes | No | No | No |
| RRES Tariff | Netting (retail credits) | Netting (retail credits) | Buy-All ($0.3289/kWh) | Buy-All ($0.3289/kWh) | SCEF bill credit |
| Sales Tax Exemption | Yes (~$2,005 saved) | Yes (~$2,005 saved) | Built into rate | Built into rate | N/A |
| Property Tax Exempt | Yes (~$644/yr) | Yes (~$644/yr) | Owner claims | Owner claims | N/A |
| 25-Year Savings | $55-70K | $38-50K | $18-28K | $14-22K | $8-15K |
| Payback Period | 8-10 yr | 11-14 yr | Immediate | Immediate | Immediate |
| Contract Length | None | 5-15 yr | 20-25 yr | 20-25 yr | Flexible |
| Maintenance | You handle | You handle | Owner handles | Owner handles | None needed |
| Best For | Long-term investors | $0-down ownership | Risk-averse | Predictability | Non-owners |
Data as of February 2026. Based on 11 kW system, $2.87/W avg, Eversource CT rate $0.29/kWh, 3% annual rate increase, 0.5% panel degradation. Smart-E at 15yr/7.99%. PPA/lease assume 15% below retail.
Highest long-term savings, highest upfront cost
Upfront Cost
$28,600–$34,100
11 kW system at $2.60–$3.10/W
Payback Period
8–10 years
Via RRES credits + tax exemptions
25-Year Savings
$55,000–$70,000
Net of system cost
You pay the full system cost upfront and own the panels, inverter, and all equipment. With Section 25D expired, there is no federal tax credit to offset your cost. Your return comes from three sources:
System cost (avg):
$31,570
Sales tax saved:
-$2,005
Effective cost:
$29,565
Year 1 RRES net income:
~$3,228/yr
Property tax saved:
~$644/yr
Total annual benefit:
~$3,872/yr
Simple payback:
~7.6 years
$0 down ownership through Connecticut Green Bank
Upfront Cost
$0 Down
Up to $50,000 loan max
Solar APR
6.99–7.99%
5 to 15 year terms
25-Year Savings
$38,000–$50,000
Net of loan payments
| Loan Term | APR | Monthly Payment |
|---|---|---|
| 5 years | 6.99% | ~$624 |
| 7 years | 6.99% | ~$474 |
| 10 years | 6.99% | ~$367 |
| 12 years | 7.49% | ~$325 |
| 15 years | 7.99% | ~$310 |
Based on $31,570 loan amount. Monthly payments include principal and interest. Smart-E max: $50,000. Up to 25% of loan can cover non-energy improvements (roof repairs, panel upgrades).
Many Connecticut solar websites incorrectly list the Smart-E loan rate as 0.99%. This is misleading and wrong. The 0.99% rate is a special heat pump incentive through CT Green Bank. Solar projects are financed at 6.99–7.99% APR depending on term.
Solar: NOT 0.99%
Actual rates: 6.99% (5-10yr), 7.49% (12yr), 7.99% (15yr)
Heat Pumps: 0.99%
Heat pump incentive only. Available through CT Green Bank.
$0 upfront, third-party claims Section 48 ITC
Upfront Cost
$0
Third-party covers everything
Your Rate
10–20% below retail
~$0.23–$0.26/kWh vs $0.29 Eversource
25-Year Savings
$18,000–$28,000
Immediate savings from day one
A third-party financing company installs, owns, and maintains solar panels on your roof. You pay them for the electricity generated at a rate below your utility rate. The company benefits from three revenue streams:
Before 2026, a cash buyer could claim the 30% residential ITC (~$9,471), making ownership clearly superior. Now that 25D is dead, cash buyers get $0 — but PPA companies still claim 30% under Section 48/48E because they own the system. This levels the playing field significantly. The PPA rate in CT now reflects this advantage.
Section 48 Deadline: Systems must begin construction by July 4, 2026 for the PPA provider to claim the 30% ITC. After that date, PPA economics change significantly. If you are considering a PPA, act before Q2 2026.
Fixed monthly payment, no maintenance
Upfront Cost
$0
Lessor covers all costs
Monthly Payment
$120–$200
Fixed (may escalate 1-3%/yr)
25-Year Savings
$14,000–$22,000
vs. no solar at all
A solar lease is structurally similar to a PPA. The leasing company installs, owns, and maintains the system. The key difference is the payment structure:
No installation, no roof needed, 5-15% bill savings
Upfront Cost
$0
Subscription model
Bill Savings
5–15%
Via bill credits
25-Year Savings
$8,000–$15,000
No risk, no commitment
Connecticut’s Shared Clean Energy Facility (SCEF) program lets you subscribe to a share of a local community solar project. Here is how the process works:
Note: Residential virtual net metering is restricted in CT (municipal, state agency, and agricultural customers only). SCEF uses a different billing credit mechanism for residential subscribers.
Key insight: Section 48/48E is a commercial tax credit claimed by the third-party system owner (the financing company), not the installer and not the homeowner. It remains available for projects beginning construction before July 4, 2026. After that date, PPA and lease economics will change significantly — rates may increase to compensate for the lost credit.
The financing option you choose determines which RRES tariff your system uses — and this has major implications for how you earn money from solar.
Bottom line: Owned systems (cash/Smart-E) use the Netting Tariff and benefit from self-consumption at high CT retail rates but pay the Solar Energy Adjustment. Third-party systems (PPA/lease) use the Buy-All Tariff at a locked rate with no adjustment charge. Adding a battery helps netting tariff customers maximize self-consumption and reduce the effective adjustment cost.
How each option stacks up over the lifetime of a solar installation in Connecticut. Based on 11 kW system, Eversource territory, 3% annual rate increase.
Highest total return. Requires $28.6-34.1K upfront.
$0 down. Interest costs reduce total return vs. cash.
$0 down, immediate savings. Third-party keeps RRES income.
Fixed monthly. Escalator can erode savings over time.
No installation. Lowest savings but zero risk.
Projections assume 0.5% annual panel degradation, 3% annual electricity rate increase, Eversource CT $0.29/kWh starting rate, 11 kW system. Cash and Smart-E include RRES netting credits, sales tax exemption, and property tax exemption. PPA/lease savings are net bill reduction vs. no solar. Smart-E assumes 15yr/7.99% term.
Walk through these questions to find the best CT solar financing option for your situation.
Community Solar (SCEF) is your best option. No installation needed, 5-15% bill savings, easy to join or leave.
Cash Purchase gives you the best 25-year return ($55-70K). You keep 100% of RRES netting credits and both tax exemptions.
Smart-E Loan lets you own with $0 down. 6.99-7.99% APR through CT Green Bank. You keep RRES netting credits and property tax benefits.
Solar Lease gives you a fixed monthly payment ($120-200). Simple, predictable, third-party handles maintenance.
PPA charges per kWh generated (10-20% below retail). Third-party claims Section 48 ITC and uses RRES Buy-All tariff ($0.3289/kWh locked 20yr).
Long-term investor with cash
Cash Purchase
Best 25-year ROI: $55-70K
$0-down ownership seeker
Smart-E Loan
6.99-7.99% APR, own the system
Risk-averse, no maintenance
PPA
10-20% below retail rate
Predictable monthly bill
Solar Lease
Fixed $120-200/mo payment
Renter or condo owner
Community Solar
5-15% bill savings, no install
Pre-July 2026 urgency
PPA or Lease
Lock Section 48 before deadline
See your personalized payback and savings. Adjust system size, cost, utility, and financing type to compare options side-by-side.
Estimate your solar return on investment with RRES income, CT tax exemptions, and ESS battery incentives.
Federal Residential Solar Tax Credit (Section 25D) Expired
Homeowners who purchase solar with cash or a loan receive $0 in federal tax credits. Section 25D expired December 31, 2025.
Hartford, most of CT (north, east, central)
New 2026 enrollees pay $0.0402/kWh Solar Energy Adjustment on all production
Electric Rate
$0.29/kWh
RRES Program
Netting Tariff
Solar Energy Adj.
$0.0402/kWh
Interconnection
4-8 weeks
Permanent exemption — solar adds $0 to your property tax bill
Payback
7.6
years
25-Year Savings
$133,649
total
Monthly
$323
per month
Estimates based on average 2026 CT solar pricing, RRES netting tariff at retail rate, $0.0402/kWh Solar Energy Adjustment, 6.35% sales tax exemption, permanent property tax exemption (~2.04% effective rate), and ESS incentive at $250/kWh standard tier. Section 25D residential ITC expired Dec 31, 2025 — $0 federal tax credit for cash/loan purchases. CT has no state income tax credit for solar.
Common questions about solar financing options in Connecticut.
No. The 0.99% Smart-E rate is exclusively for heat pumps, NOT solar. Solar Smart-E rates are 6.99% APR for 5, 7, and 10-year terms, 7.49% for 12-year, and 7.99% for 15-year terms. Many websites incorrectly list 0.99% for solar — this is wrong. The low rate is a heat pump incentive through CT Green Bank.
No. The residential solar tax credit (Section 25D) expired December 31, 2025 under the OBBBA. Homeowners who buy solar with cash or a Smart-E loan receive $0 in federal tax credits. However, PPA and lease providers claim the 30% commercial ITC (Section 48/48E) through July 4, 2026, which lowers your rate.
It depends on your priorities. Cash purchase offers the highest 25-year ROI ($55-70K) but requires $28,600-$34,100 upfront. PPA and lease are increasingly popular because the third-party owner claims Section 48 and passes savings to you — immediate savings with $0 down. Smart-E loan is the middle ground: $0 down ownership at 6.99-7.99% APR.
Owned systems (cash or Smart-E loan) use the RRES Netting Tariff: excess solar earns retail-rate credits (~$0.29/kWh) but you pay the $0.0402/kWh Solar Energy Adjustment on all production. Third-party systems (PPA/lease) use the Buy-All Tariff: all electricity is sold to the grid at $0.3289/kWh locked for 20 years.
The Solar Energy Adjustment is a per-kWh charge on ALL solar production for RRES netting tariff customers. For 2026 enrollees, the rate is $0.0402/kWh — an 8x increase from the prior $0.005/kWh. On an 11 kW system producing 12,925 kWh/yr, this costs ~$520/year. This applies to cash and Smart-E loan systems using the netting tariff. PPA/lease systems on the Buy-All tariff are not affected.
PPA rates in CT are typically 10-20% below the prevailing retail electricity rate. With Eversource at $0.29/kWh and UI at $0.28/kWh, PPA rates typically range from $0.23-$0.26/kWh. The third-party owner earns $0.3289/kWh on the Buy-All tariff and passes a portion of that savings to you through the lower rate. Contracts run 20-25 years.
Yes. Smart-E loans allow up to 25% of the total loan amount for non-energy improvements such as roof repairs, electrical panel upgrades, or asbestos abatement. On a $31,570 loan, that is up to $7,893 for non-energy work. This is a significant advantage over standard solar loans.
You have three options: transfer the contract to the buyer (most common, requires buyer qualification), buy out the remaining contract at a pre-set price, or have the system removed (usually at your cost). Most buyers will assume the contract since it provides immediate electricity savings. Your solar company facilitates the transfer.
Before 2026, cash and loan buyers received a 30% federal tax credit, making ownership clearly superior. Now that 25D is dead, homeowner purchases get $0 in federal credits. But PPA and lease companies still claim 30% under Section 48/48E because they own the system. This advantage is passed to you as lower rates, narrowing the gap with ownership.
Yes. Connecticut offers community solar through the Shared Clean Energy Facility (SCEF) program. You subscribe to a share of a local solar project and receive 5-15% savings on your electric bill. No installation needed, no equipment on your roof. Ideal for renters, condo owners, and homes with shaded roofs. Virtual net metering for residential customers is restricted, so SCEF uses a different billing credit mechanism.
CT pricing by city and system size
Read guide6.99-7.99% APR deep-dive
Read guideNetting vs Buy-All tariffs explained
Read guideSales tax + property tax savings
Read guideWhy CT solar still works in 2026
Read guideUtility comparison for solar
Read guideESS incentive $250-600/kWh
Read guideRRES netting tariff mechanics
Read guideSection 48 ITC + MACRS + C-PACE
Read guideGet a personalized comparison of cash, Smart-E loan, PPA, and lease options based on your roof, usage, and budget. Free, no obligation.
Section 48 deadline: July 4, 2026. If you are considering a PPA or lease, act before Q2 2026 to lock the 30% ITC advantage.