Substitute House Bill No. 7266 proposes the establishment of a uniform solar capacity tax in Connecticut, set to take effect on July 1, 2025. This tax will apply to owners of solar photovoltaic systems with a nameplate capacity exceeding two megawatts, which are approved by the Connecticut Siting Council or local zoning authorities after July 1, 2026. The tax is calculated at a rate of $11,000 per megawatt, with a 2% annual increase starting July 1, 2027, and will be payable to the municipality's finance department. The bill also includes provisions for tax collection, interest on unpaid taxes, and allows municipalities to enter agreements to stabilize or freeze the tax for specific owners.

Additionally, the bill modifies existing property tax exemptions for renewable energy sources by repealing and replacing subdivision (57) of section 12-81 of the general statutes. The new language clarifies the conditions under which Class I renewable energy sources and hydropower facilities are exempt from taxation, focusing on their annual production relative to the estimated load at the installation site. Key insertions include provisions for exemptions on solar thermal or geothermal systems, with specific criteria for eligibility, and a requirement for individuals claiming exemptions to file a written application by November 1 of the assessment year. The bill also clarifies that alterations requiring a building permit will necessitate a new application to maintain exemption status, ultimately aiming to promote renewable energy use through clearer guidelines and incentives.