Property Tax Exemption for Renewable Energy Systems

Connecticut provides a property tax exemption for “Class I” renewable energy systems* and hydropower facilities** that generate electricity for private residential use. The exemption is available for systems installed on or after October 1, 2007, that serve farms, single-family homes or multi-family dwellings limited to four units. In addition, “any passive or active solar water or space heating system or geothermal energy resource” is exempt from property taxes, regardless of the type of facility the system serves. Public Act No. 22-25 added electric vehicle charging stations, refueling equipment for fuel cell vehicles, and zero-emission school buses as eligible technologies beginning October 1, 2022.

Beginning in October 2014, commercial and industrial systems (meeting the same technology requirements as above) are also eligible for the property tax exemption. The exemption is available for properties installed on or after January 1, 2014, and the nameplate capacity cannot exceed the load for the location where the system is installed or the aggregated load of beneficial accounts for a virtual net metering project. Before October 2014, municipalities can choose to offer such an exemption (See a Local Option Property Tax Exemption). Commercial and industrial systems installed after January 1, 2010 and located in a “distressed municipality” with a population between 125,000 and 135,000 are eligible for the property tax exemption beginning in October 2013. 

An exemption claim must be filed with the assessor or board of assessors in the town in which the property is placed on or before the first day of November in the applicable assessment year. Applications are not required each year as long as no major alterations are made to the renewable energy system. Contact your local tax assessor’s office for more information.

* A “Class I renewable energy source” is defined as “(A) energy derived from solar power, wind power, a fuel cell, methane gas from landfills, ocean thermal power, wave or tidal power, low emission advanced renewable energy conversion technologies, a run-of-the-river hydropower facility provided such facility has a generating capacity of not more than five megawatts, does not cause an appreciable change in the river flow, and began operation after July 1, 2003, or a sustainable biomass facility with an average emission rate of equal to or less than .075 pounds of nitrogen oxides per million BTU of heat input for the previous calendar quarter, except that energy derived from a sustainable biomass facility with a capacity of less than five hundred kilowatts that began construction before July 1, 2003, may be considered a Class I renewable energy source, or (B) any electrical generation, including distributed generation, generated from a Class I renewable energy source.”

**Eligible hydropower facilities include “run-of-the-river hydropower facilities provided such a facility has a generating capacity of not more than 5 MW, does not cause an appreciable change in the riverflow, and began operation prior to July 1, 2003.”