Substitute House Bill No. 7266 proposes the implementation of a uniform solar capacity tax in Connecticut, effective July 1, 2025. This tax will target owners of solar photovoltaic systems with a nameplate capacity exceeding two megawatts, which receive approval from the Connecticut Siting Council or local zoning authorities after July 1, 2026. The tax is set at $11,000 per megawatt for a duration of twenty years, with a 2% annual increase starting July 1, 2027. The tax will be collected by municipal finance departments, contributing to general revenue, and municipalities will have the option to enter agreements to stabilize or freeze the tax for certain owners.

Additionally, the bill repeals and replaces subdivision (57) of section 12-81 of the general statutes, modifying exemptions for Class I renewable energy sources and hydropower facilities. The new provisions specify that exemptions apply only to installations for private residential use or on farms, contingent on meeting specific criteria. The bill also clarifies that exemptions will only cover equipment used for electricity generation, excluding the real property on which they are installed. Key deletions from current law include the removal of certain conditions previously tied to exemptions, while new requirements mandate that individuals claiming exemptions must file a written application by November 1 of the assessment year. The bill aims to streamline tax regulations for renewable energy sources while ensuring municipalities can benefit from the generated tax revenue.