Local Option - Property Tax Exemption for Renewable Energy Systems

Summary

Connecticut municipalities are authorized, but not required, to offer a property tax exemption lasting up to 15 years for qualifying cogeneration systems installed on or after July 1, 2007 (see Conn. Gen. Stat. § 12-81 (63)). Municipalities that adopt an ordinance to provide such an exemption may require a payment in lieu of taxes from the property owner.

Beginning in October 2013, a municipality may also adopt an ordinance to exempt commercial or industrial Class I renewable resources*, certain hydropower facilities**, or solar thermal or geothermal renewable energy resources. Only facilities installed between January 1, 2010 and December 31, 2013 are eligible for the exemption, and a facility capacity may not exceed the electricity load for the location. Systems installed after 2013 will be eligible for a statewide exemption. 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.

After October 1, 2015, municipalities may also adopt a property tax exemption for Class I renewable energy resources that are the subject of power purchase agreements, for up to the length of the agreement.

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."