Connecticut state officials are hoping that their new alternative energy incentives can encourage more homeowners to install solar power and other alternative energy systems on their properties. The state hopes that by 2022, there will be at least 3,000 homes with solar panels.
The state government is also promoting commercial alternative energy projects and requiring the utilities to get more energy from sustainable sources. The officials are still discussing how the various programs will be administered, but it is a good sign that they will be offered by the government.
Residential solar panels will be given their incentives via surcharges on the owners’ electric bills, while commercial projects would be paid through a new surcharge. In theory, the surcharge will offset the electric rates because prices in the solar market are constant when compared to the cost of natural gas, which fluctuates.
The new alternative energy incentives were part of the energy bill that was passed by the state legislature last June of 2010. Governor Dannel P. Malloy signed the bill into law, making it effective July 1. The new regulations would attract solar contractors and other alternative energy companies to the state.
One of the incentives that are part of the energy bill is the Green Bank. It would be funded by earnings from the Connecticut Clean Energy Fund and used to fund other solar projects in the state until 2022.
This new law also requires utility companies in Connecticut to enter in new alternative energy contracts for the next six years, worth $8 million per year. One contractor that wishes to do business in Connecticut is Borrego Solar, a Boston-based commercial solar installer. At present, the company does business in New Jersey,California,Massachusetts,Texas, and Pennsylvania. These are states that also provide great incentives for solar projects.
While experts say that New Jersey has the most competitive incentives in the Northeast,Connecticut’s new incentives are considered more attractive than those of New Jersey, where the price of solar changes each day. Solar contractors gamble their investment when they build large solar arrays in that state, seeing as there is not set price for solar energy in the future.
In Connecticut, the utilities would enter into a long term, fixed rate contract with alternative energy contractors. Companies will always know what the return of investment is in the future and also be able to make secure investments in new alternative energy projects.
Another Connecticut incentive gives utilities the chance to build their own 30 megawatts of alternative energy plant in the next three years. According to Connecticut deregulatory laws, utilities are not allowed to own any energy plants in the state. They can only purchase them from privately owned energy generation plants. The new incentive exempts the companies from this rule as long as they build and own alternative energy plants.