Connecticut’s Solar Lease II program, which was finalized on June 28, will make solar leasing more economically competitive, accelerate the decline in the cost of solar energy, expand energy options for businesses, and make solar power more accessible to homeowners.
Solar Lease II was created by the Clean Energy Finance and Investment Authority (CEFIA), Connecticut’s green bank. CEFIA leverages private capital to expand clean energy opportunities in the state. In this program, CEFIA is leveraging $9.5 million in public funds to attract $50 million in private capital (a 5/1 ratio). The program is in line with the CEFIA's major goal - to use limited public capital to maximize private-sector investment.
"Connecticut ratepayers actually get a return that will pay back the state 100 percent of the performance-based incentives that will be invested in the program," said Bert Hunter, CEFIA's chief investment officer.
Solar Lease II will make solar photovoltaic systems available to a wider range of homeowners than is typical nationwide. Residential customers with credit scores as low as 640 will be able to lease solar panels and save money on their utility bills.
Hunter estimates the short-term residential savings from solar photovoltaic panel installations compared to what customers would have paid if they had not installed solar will be around 5 percent for Connecticut Light & Power customers and 20 percent for United Illuminating Company customers.
Residential photovoltaic system customers will have two options – an escalating lease and a fixed-price lease. At the end of the 20-year lease period, homeowners may buy the equipment, extend the leases, or return the equipment to its installers.
Businesses, schools and municipalities can participate in power purchase agreements (PPAs) through this program and can also save money by using Zero Emission Renewable Energy Credits (ZRECs). The program will also include small commercial customers. In other states, it is often difficult for small businesses to lease solar equipment.
The solar installations will be completely covered by a performance guarantee from an insurance company which is partnering with CEFIA.
Solar Lease II includes solar hot water equipment as well as solar power. The solar hot water leases will extend for 15 years.
During the next two years, the program will support approximately 1,500 residential solar photovoltaic systems, 400 residential hot water systems, and 40 commercial solar systems, for a total of 14 MW of photovoltaic and 4,600 MMBtu of solar hot water.
CEFIA is partnering with debt providers, tax equity partners, insurance companies, servicing companies and other organizations to create the program.
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