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Section 25D expired December 31, 2025. Here's the honest math for 2026.
The One Big Beautiful Bill Act (OBBBA), signed July 4, 2025, eliminated the residential solar tax credit (Section 25D) effective December 31, 2025. There is no phase-down, no extension, and no replacement.
Section 25D was the residential homeowner credit. Section 48/48E is the commercial/third-party credit. With a PPA or lease, a financing company (not the installer, not you) owns the system and claims the 30% ITC. The savings are passed through to you as a lower electricity rate. The installer does not claim the credit. This distinction matters because many solar sales pitches incorrectly state that "the installer gets the tax credit."
Connecticut has high electric rates, strong RRES credits, valuable tax exemptions, and a locked Buy-All tariff that make solar profitable even without Section 25D.
$0.27–0.30/kWh
Connecticut residential electric rates range from $0.27/kWh (United Illuminating) to $0.29/kWh (Eversource CT), with all-in rates often reaching $0.30/kWh. The national average is $0.19/kWh. Higher rates mean every kilowatt-hour your panels produce offsets more expensive electricity. An 11 kW system producing approximately 12,925 kWh per year at $0.29/kWh offsets roughly $3,749 per year in electricity costs.
Full retail-rate credits on excess generation
Under the RRES (Residential Renewable Energy Solutions) netting tariff, excess solar generation earns retail-rate credits that roll over monthly with no expiration. Your solar powers your home first, and any surplus flows to the grid for credit. However, new 2026 enrollees face a $0.0402/kWh Solar Energy Adjustment on all production. On 12,925 kWh/yr, that is approximately $520/yr. Legacy pre-2026 customers pay only $0.005/kWh (about $65/yr). This is a real cost we will address honestly later on this page.
6.35% saved on full system cost
Connecticut exempts all solar PV equipment and installation from the 6.35% state sales and use tax. On an 11 kW system costing $31,570, that saves approximately $2,005 at purchase. Provide Form CERT-140 to the seller at the time of purchase. This exemption is permanent with no expiration date.
100% exclusion from assessed value
Solar installations are fully excluded from property tax assessment in Connecticut. Adding solar increases your home value but adds $0 to your property tax bill. With CT average effective property tax rates around 2.04% (among the highest in the US), an 11 kW system worth $31,570 saves approximately $644 per year. Over 25 years, that totals roughly $16,100 in property tax savings alone. Filed by November 1 of the assessment year.
Strongest PPA/lease deal in New England
The RRES Buy-All tariff pays $0.3289/kWh for all solar production, locked at enrollment for 20 years. This is the tariff used by third-party PPA and lease providers. The system owner exports all generation to the grid and receives guaranteed quarterly or annual cash payouts at this fixed rate. You benefit through a below-retail electricity rate. No other New England state offers a comparable locked-rate guarantee for this duration.
Third-party system owner claims the credit
Section 25D (residential) is dead, but Section 48/48E (commercial/third-party) remains active for projects beginning construction before July 4, 2026. With a solar PPA or lease, a financing company owns the system on your roof and claims the 30% federal ITC. The savings are passed through to you as a lower per-kWh rate or reduced monthly payment. The installer does not claim the credit; the third-party system owner does.
CT Green Bank financing + battery demand response
The Smart-E loan through CT Green Bank offers $0 down financing for solar at 6.99–7.99% APR (note: the 0.99% rate is for heat pumps only, not solar). Up to $50,000 with terms from 5 to 15 years. Additionally, the ESS (Energy Storage Solutions) program provides $250–600/kWh in upfront battery incentives plus ongoing demand response performance payments during summer peak events. A 13.5 kWh battery receives roughly $3,375 upfront at the standard tier plus approximately $1,060 per year in performance payments.
An honest side-by-side comparison using a typical 11 kW Connecticut system at $2.87/W. No sugar-coating.
| Before (With 30% ITC) | After (No ITC, 2026) | |
|---|---|---|
| System Cost (11 kW at $2.87/W) | $31,570 | $31,570 |
| Federal ITC (Section 25D) | -$9,471 (30%) | $0 (EXPIRED) |
| Sales Tax Saved (6.35%) | -$2,005 | -$2,005 |
| Net Cost After Upfront Savings | $20,094 | $29,565 |
| RRES Net Income (Year 1) | ~$3,749/yr | ~$3,229/yr (after $520 adj.) |
| Property Tax Saved (Annual) | ~$644/yr | ~$644/yr |
| Payback Period | ~6–7 years | ~8–10 years |
| 25-Year Net Savings | ~$100,000+ | ~$80,000+ |
Payback went from approximately 6–7 years to approximately 8–10 years — an increase of 2–3 years. 25-year savings dropped from approximately $100,000+ to approximately $80,000+. That is a real difference, but CT solar is still a profitable investment well within the 25-year panel warranty period. The system will produce free electricity for 15–17 years after payback.
Without the residential ITC, the relative advantages of each financing option have shifted. Here is an honest comparison for 2026.
Upfront Cost
$29,565 net (after sales tax exemption)
Federal ITC
$0 (25D expired)
System Ownership
You own the system
Payback
~8–10 years
25-Year Savings
Highest long-term ($80,000+)
RRES Tariff
Netting tariff at retail rate
Best For
Maximum long-term savings, no debt
Upfront Cost
$0 down
Federal ITC
$0 (25D expired)
System Ownership
You own the system
Payback
Net-positive month 1 possible
25-Year Savings
Strong (minus interest)
RRES Tariff
Netting tariff at retail rate
Best For
$0 down + ownership through CT Green Bank
Upfront Cost
$0
Federal ITC
30% Section 48 (claimed by owner)
System Ownership
Third-party owns system
Payback
Immediate savings
25-Year Savings
Moderate (10–20% below retail)
RRES Tariff
Buy-All $0.3289/kWh locked 20 years
Best For
$0 upfront + Section 48 still available
Smart-E solar rates are 6.99–7.99% APR depending on term length (5yr: 6.99%, 7yr: 6.99%, 10yr: 6.99%, 12yr: 7.49%, 15yr: 7.99%). The 0.99% APR rate you may see advertised is for heat pump installations only and does not apply to solar. Maximum loan: $50,000 through CT Green Bank.
Most solar sales pages will not tell you this. We will. New 2026 RRES enrollees face a Solar Energy Adjustment that is 8x higher than what legacy customers pay.
PPA and lease systems use the Buy-All tariff ($0.3289/kWh locked 20 years) instead of the netting tariff. The Solar Energy Adjustment does not apply to Buy-All systems. This is one reason why third-party ownership has become relatively more attractive in 2026.
With the higher Solar Energy Adjustment and no residential ITC, a battery storage system has become a more important part of the CT solar equation.
ESS Upfront
$3,375
13.5 kWh battery
Demand Response
~$1,060
per year (Yr 1-5)
Self-Consumption
35%→55%
more savings retained
5-Year Value
~$8,675
incentive + payments
Section 25D (residential) is dead, but Section 48/48E (commercial) is still active. This changes the lease and PPA calculus significantly for Connecticut homeowners.
A financing company (not the installer, not you) owns the solar system on your roof. You pay for the energy it produces at a below-retail rate.
As a business entity, the system owner claims the 30% Section 48/48E ITC and receives the RRES Buy-All tariff at $0.3289/kWh locked for 20 years.
You get $0 upfront with PPA rates 10–20% below retail, or lower fixed lease payments. Immediate savings from day 1. No Solar Energy Adjustment concerns.
Section 48/48E requires projects to begin construction before July 4, 2026. After this date, PPA and lease rates will likely increase significantly as the third-party can no longer claim the 30% ITC.
Cash vs Smart-E vs PPA comparisonIf you are considering a solar PPA or lease in Connecticut, signing before July 4, 2026 matters. After this date, the third-party can no longer claim the 30% ITC, which means PPA rates will likely increase 15–25%. The Buy-All tariff ($0.3289/kWh) locks at enrollment, so acting sooner also secures the current rate for 20 years.
Adjust system size, utility, financing type, and battery to see your personalized payback without the federal ITC. All numbers include the $0.0402/kWh Solar Energy Adjustment for new enrollees.
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.
Honest answers about CT solar without the federal tax credit in 2026.
No. Section 25D (the residential solar ITC) expired December 31, 2025. CT homeowners who purchase solar with cash or a loan receive $0 in federal tax credits. CT also has no state income tax credit for solar. However, if you choose a PPA or lease, the third-party system owner can claim the 30% commercial ITC under Section 48/48E for projects beginning construction before July 4, 2026.
Nothing replaced the federal ITC. Connecticut relies on its existing incentive structure: RRES netting credits at retail rate, the $0.3289/kWh Buy-All tariff locked for 20 years, 6.35% sales tax exemption, permanent property tax exemption, Smart-E financing through CT Green Bank, and the ESS battery incentive program. These incentives existed alongside the ITC and remain active.
CT still has strong incentives — just not the federal residential ITC. With electric rates at $0.27–0.30/kWh (53–58% above the national average), RRES netting credits, tax exemptions saving $2,005 upfront and $644/yr permanently, and ESS battery incentives, CT solar remains financially viable. The payback stretched from 6–7 years to 8–10 years, but 25-year savings still exceed $80,000.
For a cash purchase of an 11 kW system in Connecticut, the payback period is approximately 8–10 years without the federal ITC. This accounts for RRES netting income (approximately $3,229/yr after the Solar Energy Adjustment), the sales tax exemption ($2,005), and the property tax exemption ($644/yr). For a PPA or lease, the payback is effectively zero since there is no upfront cost.
No. The OBBBA (One Big Beautiful Bill Act), signed July 4, 2025, eliminated Section 25D with no scheduled return date. There is no pending legislation to restore it. Waiting means paying $0.27–0.30/kWh electric bills every month while rates continue rising. Additionally, the Section 48 third-party ITC (for PPA/lease) expires for projects not begun by July 4, 2026. After that date, even the PPA/lease workaround may cost more.
PPA and lease options are relatively stronger in 2026 compared to cash purchase because the third-party system owner can still claim the 30% Section 48/48E ITC. The savings are passed through as lower rates. In CT specifically, the Buy-All tariff at $0.3289/kWh locked for 20 years makes third-party ownership economically attractive. Cash purchase still produces higher 25-year savings if you can afford the upfront cost, but the gap has narrowed.
The Solar Energy Adjustment is a charge applied to all solar production (not just exports) for RRES enrollees. New 2026 enrollees pay $0.0402/kWh, which on an 11 kW system producing 12,925 kWh/yr equals approximately $520/yr. Legacy customers (pre-2026 enrollees) pay only $0.005/kWh (about $65/yr) and are grandfathered through December 31, 2039. This is the single most important factor to understand when evaluating CT solar economics in 2026.
The historical trend in Connecticut is yes. CT electric rates have increased significantly over the past decade, driven by grid modernization costs, transmission upgrades, and supply charges. CT already has among the highest residential rates in the continental US. Rising rates increase the value of solar over time because each kWh your panels produce offsets more expensive electricity. A 3% annual rate increase turns $0.29/kWh today into $0.39/kWh in 10 years.
Connecticut has the SCEF (Shared Clean Energy Facility) program, which allows residents to subscribe to community solar projects and receive bill credits. Typical savings are 5–15% off your electric bill with $0 upfront and no installation on your property. Note that residential virtual net metering is restricted in CT to municipal, state agency, and agricultural customers. Community solar is a good option for renters, condo owners, or homes with shaded roofs.
Yes. The CT ESS program provides $250–600/kWh in upfront battery incentives (standard tier: $250/kWh, approximately $3,375 for a 13.5 kWh battery). More importantly, a battery increases self-consumption from roughly 35% to 55%, reducing your grid exports and the effective impact of the $0.0402/kWh Solar Energy Adjustment. ESS demand response performance payments add approximately $200+/kW annually during summer peak events.
City-by-city pricing, system sizes, and installer costs across Connecticut.
Netting tariff vs Buy-All, Solar Energy Adjustment, and enrollment details.
ESS incentives, demand response payments, and battery strategy.
Side-by-side financing comparison for Connecticut homeowners.
Sales tax, property tax, and Form CERT-140 details.
CT Green Bank loan rates, terms, and eligibility.
All Connecticut solar and heat pump guides in one place.
No federal ITC does not mean no savings. Connecticut's high electric rates, RRES credits, tax exemptions, and ESS battery incentives still make solar a smart investment. Get a personalized quote with real numbers.
Updated February 2026 — All numbers reflect post-OBBBA reality