A new Connecticut law will require small commercial solar installations to compete in utility-run auctions rather than negotiate their own power-sale rates.
Most Connecticut construction and trades business owners who've installed on-site solar don't realize that a provision buried in HB05340—An Act Concerning Renewable Power Generation—will fundamentally change how they sell the electricity their systems generate.
Starting January 1, 2028, small commercial solar projects of up to 5 megawatts (MW) will no longer be able to negotiate bilateral rates directly with utilities. Instead, they'll be required to participate in an annual competitive solicitation run by their utility. The price they receive for every kilowatt-hour generated will be capped by the Public Utilities Regulatory Authority (PURA).
If you own a construction company, HVAC business, electrical contractor, plumbing firm, or other trades operation with an on-site solar system up to 5 MW, this applies to you. The rule covers systems installed on commercial or industrial property where the owner uses some of the power on-site and sells excess back to the grid.
Larger systems (above 5 MW) and residential solar are not affected by this provision.
Under the old model, a small business could negotiate a power-purchase agreement (PPA) directly with its utility, locking in a rate that reflected market conditions and the business's specific circumstances.
Under HB05340's new framework, that option disappears. Instead:
The practical effect: your revenue from solar becomes less predictable and potentially lower than what you might negotiate in an open market.
The law's proceeding begins July 1, 2026. PURA will establish the tariff structure and price caps during this period. The new tariffs become operative on January 1, 2028, and the utility's competitive solicitation offerings continue through December of that year (Section 2(b)(1), Page 7).
If you're considering a solar installation or are currently in contract negotiations, this timeline matters. Projects completed before the effective date may have different terms than those installed after January 1, 2028.
If you're evaluating solar for your business, understand that the economics will shift in 2028. The rate certainty you might negotiate today won't be available after that date. You may want to accelerate timelines or adjust your financial projections accordingly.
If you already have solar, monitor PURA's rulemaking process over the next 18 months. The price caps and solicitation rules will be published as they're finalized, and they'll directly affect your revenue.
Connecticut's construction and trades associations have resources explaining HB05340's impact on small commercial operations. Consulting with your accountant or solar provider about how this change affects your specific situation is worth the time investment.
Source: HB05340, An Act Concerning Renewable Power Generation, Section 2(b)(1), Page 7.