Connecticut: The Latest Laboratory for Solar Incentives


After establishing one of the first official RPS programs over a decade ago, Connecticut is renewing the hopes of homeowners seeking a solution to install panels on their roofs. After observing developments in rebate programs and markets for PV installations, manufacturing and SRECs, Connecticut lawmakers and the Board of Directors of the Clean Energy Finance and Investment Authority (CEFIA) have adapted their support for solar deployment very craftily. New Jersey is suffering an oversupply in its SREC market. Massachusetts has a strong SREC market but has received criticism for overly generous rebate programs (which have since been scaled back somewhat). Pennsylvania has both an oversupplied SREC market trading around $30/SREC and a dried-up rebate fund. (All these, by the way, are great problems to have from the perspective of a solar advocate, but less so for a homeowner trying to get some help putting panels on the roof!)

Then there’s Connecticut pitted between these three states. Here are a few highlights of the proposals the CEFIA will vote to approve funding for next Tuesday:

  • 30 MW of residential PV installed by 2022
  • upfront rebates for purchased systems
  • performance-based incentives for leased systems
  • 10-year budget of $90-100 million

Here’s why these highlights are part of a great strategy to boost residential solar in the Constitution State. First, most SREC markets do not distinguish between an SREC from a multi-MW solar farm and a small 4 kW residential PV generator. Even with aggregators like SRECTrade that give the little guys a fighting chance to monetize SRECs at a fair price in the open market, there is still the problem of large-scale installations taking a big bite out of the market at the expense of you, the residential PV system owner (or lessee). Connecticut gets around that dilemma with a 30 MW target for residential solar. This ensures there will be an incentive to attract market players that specialize in such installations. As a comparison, Massachusetts in total (including large solar projects) has installed a little over 50 MW in just over 2 years. In other words, it’s a reasonable and very doable starting point to support residential solar installations.

And speaking of large players coming to the market, SolarCity was the first, but certainly not the last, to set up shop in Connecticut. A leader in the solar leasing industry, SolarCity surely took note of the performance-based incentive included in the recent legislation. In recognizing the boom in solar leases, Connecticut decided to change the incentive structure so that in lieu of upfront rebates, systems can be rewarded by production of they lease the panels. Rather than making this incentive market-based, it’s instead a very solar lease-friendly, predictable rate and time period that can fit neatly into a 15- to 20- year lease agreement.

Lastly, the funding for the program aligns well with achieving its base goal of 30 MW of residential solar. With a quick back-of-the-envelope calculation, funds would still be available if all program applicants either leased or self-purchased their systems. By putting a cap on the timeline and rate of a performance-based incentive (at 6 years and $470/kWh) and a $15,000 maximum on the upfront rebate, the program puts necessary controls relative to its end targets. We’re excited to monitor the developments and post feedback on the latest program to boost residential solar!

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