In May 2010, Connecticut took a significant step towards promoting renewable energy and sustainability by enacting legislation (H.B. 5435) that introduced a sales and use tax exemption specifically targeted at the manufacturing sector of renewable energy systems. This legislative move is designed to encourage the production of solar thermal systems (both active and passive), solar electric systems, wind-power electric systems, and geothermal resource systems by making it more financially viable for manufacturers.
Under this legislation, any equipment, machinery, and fuels directly involved in the manufacturing process of these renewable energy systems are exempt from the state’s sales and use taxes. This exemption is intended to reduce the overall cost of producing renewable energy technologies, thereby stimulating growth in the renewable energy sector, making these technologies more affordable for consumers, and promoting a shift towards cleaner, more sustainable energy sources.
The exemption covers a broad range of necessary components and materials used in the manufacture of renewable energy systems, from the basic machinery required to produce solar panels or wind turbines to the fuels needed in the manufacturing process. By alleviating the tax burden on these essential inputs, Connecticut aims to foster an environment that is conducive to innovation and expansion in the renewable energy industry, positioning itself as a leader in the green technology field and contributing to the broader goals of environmental sustainability and energy independence.
