Topic:
LEGISLATION; RENEWABLE RESOURCES; TAX EXEMPTIONS; ENERGY CONSERVATION; RETAIL TRADE; ENERGY ASSISTANCE;
Location:
ENERGY CONSERVATION;

OLR Research Report


April 17, 2006

 

2006-R-0283

FUNDING FOR ENERGY EFFICIENCY PRODUCTS

By: Kevin E. McCarthy, Principal Analyst

You asked (1) what has happened to the tax exemption for energy efficiency products and (2) what programs exist to subsidize energy efficiency and renewable energy in the residential sector.

TAX EXEMPTION

PA 05-02 and PA 05-4 of the October 25, 2005 special session exempted various energy efficiency products from the sales tax. These products included insulation, programmable thermostats, and gas furnaces and windows that met the federal Energy Star efficiency standards, among other things. Under the 2005 legislation, the tax exemption expired on April 1, 2006. HB 5524, “An Act Concerning Home Heating Assistance” would have extended the exemptions until March 31, 2007. The Energy and Technology Committee favorably reported this bill to the Appropriations Committee, which allowed it to die by taking before the committee's took no action on it by its reporting deadline.

RESIDENTIAL ENERGY CONSERVATION AND RENEWABLE SUBSIDIES

The primary residential energy conservation subsidy program is the Smart Living Catalog, which offers energy-efficient products at a substantial discount over retail. The catalog offers a wide variety of products, including lighting; heating, ventilation, and air conditioning; and thermostats. The catalog also offers water efficient products. Connecticut Light and Power and United Illuminating mail the catalog to all of their residential customers. It is also available on the Web at http://www.energyfederation.org/smartliving/default.php/. The discounts and the program's administrative costs are recovered through a charge on electric bills.

In addition, the Connecticut Housing Investment Fund (CHIF) operates a low interest energy conservation loan program using funding from the Department of Economic and Community Development. The program provides loans for such things as replacement heating systems and windows, insulation, and solar energy systems. The program provides loans for single and multi-family housing. Owners of one to four unit buildings may borrow up to $15,000 and owners of larger buildings and projects may borrow up to $2,000 per unit, up to $60,000 per building, for a period of 10 years for eligible improvements. Further information about the program is available online at http://www.chif.org/owner_borrowers/index.shtml#.

The state's Clean Energy Fund has a program that subsidizes the cost of residential solar installations. Specifically, the Residential Solar Photovoltaic Rebate Program offers rebates through participating installers for Connecticut residents who install solar photovoltaic systems on their homes. The program offers an incentive of $5 per watt for system and installation costs. Homes can be one to four family residences. The incentives are available on the first 5,000 watts of any size system. Further information about the program is available at http://www.ctcleanenergy.com/funding/index.html. Connecticut Innovations, Inc., which administers the program, anticipates that it will expand the program to cover small-scale wind generating system later this year.

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