Solar Hot Water Incentive Program - Residential

A Smart Energy Solution

Investing in a Solar Thermal or Solar Hot Water (SHW) system is a smart energy solution for most homeowners and certain businesses. This proven and reliable technology offers long-term performance with low maintenance.

What Is a Solar Hot Water System?

A SHW system generates heat from sunlight. The most visible components of a SHW system typically are the solar collectors, or panels, which are usually roof-mounted.  For water-heating systems, the rest of the system includes a tank for storing the heated water, a pump and piping to circulate the heated liquid (usually an anti-freeze solution) from the collectors to a heat exchanger in the tank, which generates hot water or warmed air, and a controller to automatically operate the pump.

Benefits of Owning a Solar Hot Water System

  • SHW systems are appealing because they are technically simple and tend to be less expensive than other types of renewable energy systems for most applications. The most cost-effective application in Connecticut is for domestic hot water (DHW) heating, particularly if it displaces electric water heating.  While the capital cost of installing a solar thermal system for DHW is higher than that of installing a conventional water heater, the fuel savings can pay back the cost of the system in approximately 6 to 10 years, with federal and state incentives.
  • The planet benefits from reduced greenhouse gas emissions and preservation of finite fossil-fuel resources for future generations. A typical residential SHW system supplies about 70% of a home’s hot water, saving 7.7 barrels of oil per year and avoiding the production of almost 3.5 tons of carbon dioxide!
  • The local community benefits from improved air quality, greater independence from fossil fuels, and jobs created by the installation of these systems.


This interim program was approved by CEFIA’s Board on March 16, 2012.  All applications approved after that date will be covered under the new rebate schedule.  Project applications submitted after that date must use the new application form, available on the link below.  This program is intended to be a transition from the original Solar Thermal Rebate Program, funded by the American Recovery and Reinvestment Act, and a new, longer-term program to be announced this summer.

NOTE:  The commercial version of this interim Solar Thermal Rebate Program will be structured somewhat differently, and will be announced on or before April 20, 2012.

Similarities to ARRA-funded Solar Thermal Rebate Program:

  • Similar incentive levels and project size limits
  • Open to all types of existing DHW systems (oil, gas, electric)
  • Same contractor qualifications


  • Payment will be made to the contractor, not the homeowner
  • Simpler application process and form
  • Different, but simpler, incentive calculations
  • A data acquisition system with remote data collection is required
  • Limited to CL&P and UI ratepayers


Incentives to Help Pay for Solar Hot Water Systems

The Clean Energy Finance and Investment Authority offers grants, through designated participating contractors, to any customer of Connecticut Light & Power or United Illuminating Company  who wishes to install solar hot water systems. Click here for current incentives.


Step 1: Complete an energy assessment for your home.  You may participate in the Home Energy Solutions program (existing homes) or the Residential New Construction program  offered by the Connecticut Energy Efficiency Fund or schedule an independent review with a HERS Rater; a contractor certified by the Building Performance Institute, Inc. (BPI), Certified Energy Managers (CEM), Certified Energy Auditors (CEA); or a Professional Engineer (PE). Make sure to take advantage of all of the cost-effective ways to save energy in your home.

Step 2: Find a solar hot water installer. Homeowner must use a CEFIA Approved Contractor to qualify for a rebate. Review our list of Approved Contractors. The contractor will review your project with you, provide information on solar hot water systems and assist you with CEFIA’s application process.

As with any significant purchase, homeowners should shop around when considering a solar hot water system, check references, seek as much information as possible and obtain multiple quotes.

Step 3: Install your system!



Links to Important Information