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Section 25D is dead — homeowners get $0 in federal tax credits for solar in 2026. But with a lease or PPA, a third-party owner claims the 30% ITC under Section 48/48E and passes savings to you. At CT's high electric rates ($0.27/kWh), third-party ownership delivers immediate, measurable savings from day one.
$0.27/kWh
CT Avg Rate
$100–160/mo
Lease Range
$0.10–0.16/kWh
PPA Range
Jul 4, 2026
48/48E Deadline
What CT homeowners need to know in 60 seconds
Section 25D is dead. If you buy solar with cash or a loan in 2026, you receive $0 from the IRS. The residential solar tax credit expired December 31, 2025 and is not coming back.
But Section 48/48E is alive. When a third-party financing company owns the solar system on your roof via a lease or PPA, that company claims the 30% Investment Tax Credit. The savings flow to you as lower monthly payments — typically $100–160/mo for a lease or $0.10–0.16/kWh for a PPA.
CT's high rates make TPO compelling. At $0.27/kWh (48% above the national average), even a PPA at $0.16/kWh saves you $0.11 per kilowatt-hour from day one. Connecticut's 1:1 virtual net metering with annual true-up maximizes the value of every exported kilowatt-hour. The catch: no state solar rebate and higher-than-average install costs ($3.15/W).
The financing company claims the credit — not you, not the installer. Here is exactly how the 30% ITC flows from the tax code to your lower monthly payment.
A financing company (the "third-party owner") purchases and installs solar panels on your roof. You don't buy the system — you agree to either lease it (fixed monthly payment) or buy the power it produces (PPA, per-kWh rate).
Because the financing company legally owns the system, it files IRS Form 3468 and claims the 30% Investment Tax Credit under Section 48/48E. On a $30,000 system, that's $9,000 back from the IRS. The company also claims MACRS depreciation (5-year accelerated schedule + 20% bonus in 2026).
The financing company doesn't pocket the ITC — it uses the $9,000+ in tax benefits to reduce your monthly payment. This is why lease/PPA payments are typically 20–40% lower than what you'd pay on a standard solar loan without the ITC.
Your lease/PPA payment is locked in below your current electric bill rate. You save money starting month one. The system owner handles all maintenance, monitoring, and warranty claims.
With NuWatt's Propel program, the third-party owner transfers full ownership to you at year 5 — after the ITC recapture period expires. You get the best of both worlds: ITC savings upfront, full ownership long-term.
Note: Propel is NOT currently available in Connecticut. Standard leases and PPAs are available today from Sunrun, Tesla, Sunnova, and other providers.
The financing company claims the ITC on IRS Form 3468 — not you, not the installer. This is the intended design of the tax code. The company also claims MACRS depreciation (5-year schedule + 20% bonus in 2026). These combined tax benefits are what allow your lease or PPA payment to be 20–40% lower than a standard solar loan without any ITC.
The investment tax credit that keeps solar leases and PPAs financially viable in 2026.
Credit Rate
30%
With prevailing wage + apprenticeship compliance (6% without)
Who Claims It
The system owner (financing company)
NOT the homeowner, NOT the installer
Residential Eligibility
Yes — via third-party ownership
TPO company owns the system, leases/PPAs it to you
Construction Deadline
Begin construction before July 4, 2026
OBBBA sunset — projects must start before this date
Minimum Hold Period
5 years
System owner must hold for 5 years or face ITC recapture
Stackable Bonuses
Domestic content (+10%), Energy community (+10%)
Can reach 50%+ total credit on qualifying projects
MACRS Depreciation
5-year schedule + 20% bonus (2026)
Additional tax benefit for the system owner
US-manufactured panels, inverters, racking
Projects in qualifying census tracts
Not every project qualifies for all adders. The base 30% ITC is the most common scenario for residential TPO in Connecticut. Your lease/PPA provider will confirm which adders apply to your specific installation.
Aug 2022
IRA signed — Section 48E created alongside Section 25D extension
Dec 2025
Section 25D (residential ITC) expires — homeowners get $0
Jan 2026
Section 48/48E remains available for commercial + third-party owners
Jul 4, 2026
OBBBA deadline — must begin construction before this date
Side-by-side comparison for a typical 8 kW system at $3.15/W = $25,200 in Connecticut.
Upfront Cost
$25,200
Federal ITC
$0 (25D expired)
Monthly Payment
$0
Est. Payback
~9 years
You Own?
Yes, immediately
Highest long-term savings but requires $25,200 upfront with zero federal credit.
Upfront Cost
$0 down
Federal ITC
$0 (25D expired)
Monthly Payment
$160–$260/mo
Interest Rate
6–8% APR
You Own?
Yes, immediately
$0 down ownership but 6–8% interest adds $9K–$16K over loan life. No ITC to offset. Smart-E loans may offer better rates.
Upfront Cost
$0 down
Federal ITC
30% (owner claims)
Monthly Payment
$100–160/mo
Maintenance
Included
You Own?
No (buyout option)
$0 down, locked-in payment below your $0.27/kWh rate. ITC lowers your cost.
Upfront Cost
$0 down
Federal ITC
30% (owner claims)
Rate
$0.10–0.16/kWh
Maintenance
Included
You Own?
No (buyout option)
Pay only for power produced. At $0.13/kWh vs $0.27/kWh you save $0.14/kWh.
The CT Green Bank offers Smart-E loans at 0.99% APR (through 3/31/2026) for up to $50,000. This is a low-interest ownership loan, not a TPO product. Since Section 25D is dead, a Smart-E loan still means $0 federal tax credit — but the ultra-low interest rate may make ownership more competitive with leases. Compare both options carefully.
NuWatt's Propel program (TPO for 5 years, then ownership transfer) is currently available in Maine and Texas only. Standard leases and PPAs are the TPO paths available in Connecticut today.
Four factors make Connecticut one of the strongest states for third-party solar ownership.
Connecticut rates are 48% above the national average. The wider the gap between your utility rate and your PPA rate, the more you save. A PPA at $0.10–$0.16/kWh saves you $0.11–$0.17 per kilowatt-hour from day one — that is real, measurable savings whether you are with Eversource or UI.
Connecticut offers full 1:1 virtual net metering with annual true-up. Every kilowatt-hour your system exports earns a full retail credit on your bill. Credits roll month-to-month and settle at the end of each annual billing cycle. This maximizes the value of your solar production — stronger than NH (~85%) or RI (80%).
Under CGS §12-81(57), Connecticut exempts solar energy systems from property tax increases for 15 years. Solar panels add value to your home without increasing your property tax bill. This is a statewide exemption — no municipal opt-in required, unlike New Hampshire.
Solar equipment is exempt from Connecticut's 6.35% state sales tax. On a $25,200 system, that saves the TPO provider approximately $1,600 — savings that are passed through to you as a lower lease/PPA rate. Unlike Texas (no exemption), CT gives TPO providers a meaningful cost advantage.
We believe in full transparency. Here is what works against TPO in Connecticut.
No state solar rebate — fewer incentives to stack compared to NJ or MA
Higher install costs ($3.15/W) than national average — but TPO avoids upfront payment
Standard lease means you never own the system (Propel not available in CT)
Typical 2–3% annual lease escalator — compare against Eversource/UI rate increases
Property tax exemption expires after 15 years — though system value depreciates by then
Lower lifetime savings than cash purchase (but $0 ITC for buyers in 2026 narrows the gap)
Eversource serves approximately 70% of Connecticut at ~$0.27/kWh. United Illuminating (UI) serves about 30% at ~$0.28/kWh. Both utilities participate in 1:1 virtual net metering with identical credit structures. UI customers may see slightly higher savings due to marginally higher rates, but the difference is minimal. Both territories are equally suitable for solar leases and PPAs.
The best option depends on your credit, tax situation, and energy goals.
Compare My OptionsThese deadlines determine whether your TPO provider can claim the ITC for your CT project.
July 4, 2026
The One Big Beautiful Bill Act (OBBBA) requires projects to begin construction before July 4, 2026 to qualify for Section 48/48E. After this date, the 30% ITC for third-party solar owners may be eliminated or significantly reduced.
June 30, 2026
If bundling solar + EV charger, the $1,000 EV charger credit (Section 30C) expires June 30, 2026.
2027
The 20% bonus depreciation available in 2026 drops to 0% in 2027, reducing the TPO company's tax benefit and potentially increasing your lease/PPA payments.
CT permitting and interconnection typically take 4–8 weeks. To meet the July 4, 2026 deadline, start the process by spring 2026.
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Straight answers to the most common Connecticut solar financing questions in 2026.
Not directly as a homeowner. The federal residential solar tax credit (Section 25D) expired December 31, 2025. Cash or loan buyers receive $0. However, through a solar lease or PPA, a third-party financing company owns the system and claims the 30% ITC under Section 48/48E. The savings flow to you as lower monthly payments.
Yes. At $0.27/kWh, Connecticut has some of the highest electricity rates in the country. A PPA at $0.10–0.16/kWh saves you $0.11–0.17 per kilowatt-hour from day one. Over 25 years, a typical 8 kW system saves $22,000–$35,000 compared to buying all power from Eversource or UI.
Connecticut uses 1:1 virtual net metering with an annual true-up. Every kWh your system exports earns a full retail credit on your bill. Credits roll month-to-month and settle at the end of the annual billing cycle. This maximizes the value of your solar production whether you use a lease, PPA, or own the system outright.
No. Connecticut's former Residential Solar Investment Program (RSIP) has ended. There is no active state-level cash rebate for solar installations. The financial benefits available are the Section 48/48E ITC (via TPO), 15-year property tax exemption, and 6.35% sales tax exemption on solar equipment.
Eversource serves about 70% of Connecticut (~$0.27/kWh) and UI serves about 30% (~$0.28/kWh). Both utilities participate in virtual net metering with identical 1:1 credit structures. UI customers may see slightly higher savings due to marginally higher rates. Both utility territories are equally suitable for solar leases and PPAs.
You can transfer the lease to the new homeowner — most buyers welcome the locked-in savings (process takes 2–4 weeks). Alternatively, you can buy out the remaining balance. Solar homes in CT typically sell at a premium because buyers value the energy cost certainty, especially given CT's high and rising electric rates.
Not yet. NuWatt's Propel program (TPO for years 1–5, then ownership transfer) is currently available in Maine and Texas only. Standard solar leases and PPAs are widely available in Connecticut from multiple national providers including Sunrun, Tesla, and Sunnova.
The critical deadline is July 4, 2026. Under the OBBBA, the third-party system owner must begin construction before this date to claim the Section 48/48E 30% ITC. Connecticut permitting typically takes 4–8 weeks. Start the process by spring 2026 to ensure your project qualifies.