Updated March 2026 · Business Guide

Commercial Solar in Connecticut: Section 48 ITC, MACRS & ROI for Businesses (2026)

While the residential solar tax credit expired in 2025, CT businesses can still claim the 30% federal commercial ITC (Section 48). Stack that with 5-year MACRS depreciation, CT's ZREC program, and C-PACE financing — and commercial solar economics are compelling in 2026.

Section 48 ITC: 30% ✓ AVAILABLE

MACRS: 5-year accelerated

Commercial cost: $2.00–$2.80/W

Key 2026 distinction: The residential solar tax credit (Section 25D) expired December 31, 2025 — but the commercial solar ITC (Section 48) remains fully available at 30% for businesses, nonprofits (via elective pay), and qualifying commercial property owners. If you're a business owner evaluating solar, this distinction matters significantly for your ROI.

The CT Commercial Solar Incentive Stack

Section 48 Commercial ITC

30% of system cost

Type: Federal tax credit

Applies to: System owner with tax liability

$100k system → $30,000 federal tax credit

MACRS 5-Year Accelerated Depreciation

Varies by tax rate

Type: Federal depreciation

Applies to: Any business owner

~$14,000–$22,000 additional tax savings on $100k system at 25–35% rate

CT C&I RES ZREC Program

$20–$50/MWh over 15 years

Type: State revenue program

Applies to: Grid-connected commercial systems

50kW system producing 60 MWh/yr → $1,200–$3,000/yr in ZREC revenue

CT Property Tax Exemption

100% exemption

Type: State property tax

Applies to: All CT commercial solar

A $150k rooftop system adds no assessed property value for tax purposes

CT Sales Tax Exemption

6.35% exemption

Type: State sales tax

Applies to: Solar equipment purchase

$100k system → ~$6,350 in avoided sales tax

Residential ITC (Section 25D)

30% (EXPIRED)

Type: Federal tax credit

Applies to: Homeowners — NOT businesses

Expired December 31, 2025

50kW Commercial Solar ROI: Step-by-Step

A 50kW commercial rooftop system in Eversource territory, cash purchase, owned by a C-corp with sufficient tax liability. All 2026 rates.

50kW Commercial System — Connecticut

Net cost: ~$60,562

after Section 48 ITC + MACRS + sales tax exemption

4.2 yrs

payback period

Step 1: Calculate net cost after incentives

Gross system cost (50kW × $2.50/W installed)$125,000

Section 48 Federal ITC (30%)−$37,500

MACRS 5-yr depreciation benefit (~$70k basis × 27% effective rate)−$19,000

CT sales tax exemption (6.35%)−$7,938

Net out-of-pocket cost$60,562

Step 2: Calculate annual economic benefit

Annual production (50kW × 1,200 kWh/kW/yr commercial)60,000 kWh

Self-consumed (75%): 45,000 kWh × $0.2518+$11,331

Exported (25%): 15,000 kWh × $0.078 (RRES)+$1,170

ZREC revenue (60 MWh × ~$30/MWh, C&I RES)+$1,800

Total annual economic benefit$14,301

4.2

Year payback

$14,301

Annual benefit

$296,963

25-yr net savings

~30%

Effective IRR

* MACRS calculation assumes 50% bonus depreciation, 27% effective tax rate, half-year convention. Consult your tax advisor for specific treatment.

Commercial vs Residential Solar in CT: Key Differences

Factor	Commercial (2026)	Residential (2026)
Federal ITC	30% Section 48 ✓ AVAILABLE	30% Section 25D ✗ EXPIRED Dec 31, 2025
MACRS depreciation	Yes — 5-year accelerated ✓	No — personal use assets
ZREC / C&I RES	Eligible for ZREC program ✓	Use RRES instead
Cost per watt (installed)	$2.00–$2.80/W	$3.40–$3.80/W
Typical system size	25kW – 1MW+	6kW – 20kW
Interconnection	Large system review (may require transformer upgrades)	Standard RRES enrollment
Ownership structure options	Cash, loan, PPA, sale-leaseback	Cash, loan, lease, PPA

Solar Economics by CT Business Type

Retail & Office

Typical size: 25–100kW

High daytime occupancy → strong self-consumption. Good ITC + MACRS candidate.

Best structure:Cash purchase or secured loan

Manufacturing & Industrial

Typical size: 100kW–5MW

Large roof, consistent daytime loads, 7-day production. Best economics at scale.

Best structure:Cash purchase + MACRS bonus depreciation

Agricultural

Typical size: 10–500kW

Ground-mount options, USDA REAP grants available (up to 25% of project cost).

Best structure:USDA REAP + ITC + MACRS

Nonprofit / Municipality

Typical size: 25kW–2MW

No tax liability — can't use ITC directly. PPA or direct pay (elective pay under IRA) may apply.

Best structure:PPA with developer or elective pay

Multi-family Residential

Typical size: 10–500kW

Building owner installs solar; tenants benefit through reduced common area costs or CT virtual net metering.

Best structure:Cash or loan; explore CT VMM program

CT Commercial Solar Programs in Detail

C&I RES (Zero Emission RECs)

Competitive ZREC auction for commercial solar systems. Winners receive 15-year contracts to sell ZRECs to the utility. Applications in annual competitive tranches.

Value: $20–$50/MWh (auction-determined)

Eligibility: CT-sited, grid-connected commercial systems, typically 10kW+

Virtual Net Metering (VNM)

Allows commercial solar owners to assign bill credits to other meters — useful for landlords, multi-tenant buildings, or businesses with operations at multiple CT locations.

Value: Retail rate bill credits distributed across accounts

Eligibility: Commercial systems with multiple associated accounts at same utility

USDA REAP Grant (Agricultural & Rural)

USDA Rural Energy for America Program provides grants (up to 25%) and loan guarantees (up to 75%) for agricultural producers and rural small businesses.

Value: Up to 25% of project cost as grant

Eligibility: Agricultural producers and rural small businesses

CT Green Bank C-PACE

Commercial Property Assessed Clean Energy financing. Repaid through property tax assessments over 20 years. 100% financing available, off-balance-sheet for many accounting purposes.

Value: 100% project financing

Eligibility: CT commercial, industrial, and nonprofit property owners

Section 48 ITC: Watch for Policy Changes

The commercial solar ITC (Section 48) is currently at 30% under the Inflation Reduction Act. Policy changes at the federal level could affect future credit availability. Systems that begin construction before any legislative change are typically grandfathered under safe harbor provisions.

Separately: the Section 48 PPA deadline for the bonus credit under commercial PPAs was July 4, 2026 under prior law — consult your tax advisor and solar developer on current PPA structures and any applicable deadlines.

Frequently Asked Questions

Is the federal solar tax credit still available for Connecticut businesses in 2026?

Yes. The commercial solar Investment Tax Credit (Section 48) remains available for businesses at 30% as of early 2026. This is different from the residential credit (Section 25D) which expired December 31, 2025. CT businesses that own their solar system (not a lease) can claim 30% of the installed cost as a federal tax credit in the year of installation.

What is MACRS depreciation for commercial solar in Connecticut?

MACRS (Modified Accelerated Cost Recovery System) allows commercial solar systems to be depreciated over 5 years on an accelerated schedule. When combined with bonus depreciation, many businesses can depreciate 60–80% of the system cost in year one. For a $100,000 solar system, this can generate $15,000–$25,000 in additional tax savings depending on the business's tax rate — on top of the 30% ITC.

What is a ZREC and how does it benefit CT commercial solar?

ZRECs (Zero Emission Renewable Energy Certificates) are tradeable certificates representing the clean energy attributes of solar production. Under CT's C&I RES (Commercial & Industrial Renewable Energy Solutions) program, eligible commercial solar systems can sell ZRECs to Eversource or UI under long-term contracts. ZREC prices vary by auction, typically $20–$50 per MWh, providing supplemental revenue over 15-year agreements.

How much does commercial solar cost per watt in Connecticut?

Commercial solar in CT costs $2.00–$2.80 per watt installed in 2026, depending on system size and complexity. Larger systems (200kW+) typically fall toward the lower end as installer overhead is spread across more capacity. Rooftop systems are generally more expensive than ground-mount due to structural engineering and waterproofing requirements.

Should my CT business buy or lease commercial solar?

For businesses with tax liability to absorb the Section 48 ITC and MACRS benefits, ownership (cash purchase or loan) almost always provides superior economics. The ITC and MACRS benefits pass through to the system owner — a lease transfers those to the financing company. Businesses without sufficient tax liability (nonprofits, low-profit entities) may benefit more from a PPA or lease structure, where the tax benefits go to the developer.

Related Connecticut Solar Guides

All CT Solar Incentives 2026 (Residential & Commercial)Solar Lease vs Buy vs PPA in CT CT Battery Storage: Commercial ESS Programs CT RRES & Commercial ZREC Programs Explained Best CT Solar Companies (Commercial Experience)CT Solar Savings Calculator: Real 2026 Math

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