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Incentives/Policies for Renewables & Efficiency

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The United Illuminating Company - ZREC and LREC Long Term Contracts   

Last DSIRE Review: 12/12/2014
Program Overview:
State: Connecticut
Incentive Type: Performance-Based Incentive
Eligible Renewable/Other Technologies: Photovoltaics, Landfill Gas, Wind, Biomass, Hydroelectric, Fuel Cells, Fuel Cells using Renewable Fuels
Applicable Sectors: Commercial, Industrial, Residential, Nonprofit, Schools, Local Government, Construction, State Government, Installer/Contractor, Tribal Government, Fed. Government, Multi-Family Residential, Low-Income Residential, Agricultural, Institutional
Amount:Prices determined through competitive solicitation
Maximum Incentive:Maximum Bid price for Year 3 (2014): $302.71 per ZREC; $200 per LREC
Terms:15-year standard contract
Eligible System Size:ZRECs: Projects larger than 100 kW and up to 1 MW in nameplate capacity
LRECs: Projects up to 2 MW in nameplate capacity
Equipment Requirements:Must have been installed after July 1, 2011
Ownership of Renewable Energy Credits:Utility
Funding Source:RPS
Program Budget:Approximately $9.6 million per year
Start Date:05/01/2012
Web Site:
Authority 1:
Date Enacted:
Date Effective:
S.B. 1243 (Public Act 11-80)
Authority 2:
Conn. Gen. Stat. ยง 16-244r et seq.

NOTE: Next round of solicitation is expected to open on July 1st, 2015.

In July 2011, Connecticut enacted legislation amending the state's Renewables Portfolio Standard and creating two new classes of renewable energy credits (RECs): Zero Emission Renewable Energy Credits (ZRECs) and Low Emission Renewable Energy Credits (LRECs).

The state's two investor-owned electric utilities, United Illuminating (UI) and Connecticut Light & Power (CL&P) must enter into 15-year contracts for RECs from zero-emission "Class I" renewable energy facilities (on the customer side of the meter) larger than 100 kilowatts (kW) but not larger than one megawatt (MW). Zero-emission Class I facilities include solar, wind and hydro generators. Resulting zero emission RECs (ZRECs) may be used for RPS compliance during the year of generation or the subsequent year. Utilities are required to spend $8 million on ZREC contracts annually.* The price cap of one ZREC in 2012 was $350, $325.50 in 2013, and $302.71 in 2014. The Connecticut Public Utilities Regulatory Authority (PURA) may reduce the ZREC price cap annually by 3% to 7%.

The two utilities also must enter into 15-year contracts for RECs from low-emission Class I renewable energy facilities (on the customer side of the meter) up to 2 MW. The law establishes the emission criteria required to achieve "low-emission facility" status, but this category could include facilities that generate electricity using fuel cells, biomass or landfill gas. Resulting low-emission RECs (LRECs) may be used for RPS compliance during the year of generation or the subsequent year. Utilities are required to spend up to $4 million on LREC contracts annually.* The price cap of one LREC was $200 in 2012 and 2013.

The utilities jointly submitted their six-year solicitation plan in December 2011 and issued their first request for proposals (RFP) in May 2012. Winning bids are evaluated based on project quality, proposed ZREC or LREC price, and compliance with the RFP process. Bids must be submitted by email. Projects must be located in CL&P's or UI's service territory.

* PURA is authorized to review this budget and make adjustments after Year 3 for LRECs and Year 4 for ZRECs. It may terminate the program entirely if technology costs do not continue to fall. Because the utilities must spend $8 million per year on new 15-year ZREC contracts and $4 million per year on new 15-year LREC contracts, the total value of the annual solicitation is $120 million for ZRECs and $60 million for LRECs.


  LREC/ZREC Solicitation Information
The United Illuminating Company
157 Church St
New Haven, CT 06510
Phone: (877) 947-3873
Web Site:
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Disclaimer: The information presented on the DSIRE web site provides an unofficial overview of financial incentives and other policies. It does not constitute professional tax advice or other professional financial guidance, and it should not be used as the only source of information when making purchasing decisions, investment decisions or tax decisions, or when executing other binding agreements. Please refer to the individual contact provided below each summary to verify that a specific financial incentive or other policy applies to your project.

While the DSIRE staff strives to provide the best information possible, the DSIRE staff, the N.C. Solar Center, N.C. State University and the Interstate Renewable Energy Council, Inc. make no representations or warranties, either express or implied, concerning the accuracy, completeness, reliability or suitability of the information. The DSIRE staff, the N.C. Solar Center, N.C. State University and the Interstate Renewable Energy Council, Inc. disclaim all liability of any kind arising out of your use or misuse of the information contained or referenced on DSIRE Web pages.

Copyright 2014 - 2015 North Carolina State University, under NREL Subcontract No. XEU-0-99515-01. Permission granted only for personal or educational use, or for use by or on behalf of the U.S. government. North Carolina State University prohibits the unauthorized display, reproduction, sale, and/or distribution of all or portions of the content of the Database of State Incentives for Renewables and Efficiency (DSIRE) without prior, written consent.