For solar power, the state of the industry is strong.
Hundreds of megawatts of solar energy is being installed across the United States every year. Solar generated power has no associated carbon emissions making it incredibly attractive to those seeking to do their part to preserve the environment for future generations. More information about how clean solar energy is can be found at any global climate change POGIL or Process Oriented Guided Inquiry Learning session.
For the most part, the state of solar is often defined by the amount of development going on in each of these states. Because development is so closely tied to financial incentives, the states with the best financial incentives often have the greatest amount of development and healthiest solar markets.
We will be diving deeper into the following states to see their current state of solar:
- New Mexico
Considered by some to be the gold standard of solar development, California is doing perhaps more than any other state to curb their current greenhouse gas emissions. Renewable energy used in this state is seeking to meet the mandate set by their Renewable Portfolio Standard (RPS) which states that 60% of their energy comes from renewable resources by 2030 and 100% of their energy comes from renewable energy by 2045. This program is driving much of the solar development in this state. Additionally, California is one of the net metering states. What is net metering? This is a process by which businesses and homeowners may over produce energy during the day when the sun is shining and then export this additional power to the grid. Then, at the end of each month, this excess solar generated power is credited back to the customer at the full retail rate as opposed to a much lower wholesale rate. This helps lower the payback period of the solar array by raising the average value of every kilowatt-hour generated. Overall, thanks to robust legislative support and additional financial incentives, California receives an A+ as a solar state.
Colorado is doing quite a bit to cut current greenhouse gas emissions through the implementation of solar. Colorado has passed a sales tax exemption for all solar products. This means that your solar system will be roughly 3% cheaper than other products. Additionally, some local utilities offer financial incentives for customers who set up a clean energy network at their home. Holy Cross Energy, for example, offers rebates up to $4,500 on larger home systems. Finally, Colorado also allows for community solar which is a program by which individual houses can buy into a much larger array located miles from your home. The combination of all these unique programs gives Colorado a grade of B+.
Idaho is not typically at the top of someone’s list when they think of states known for solar but they are taking steps to change this. They offer a state income tax credit which can be used up to a value equal to 7.4% of the total installed cost of your solar system regardless of the solar farm size. On average, residents of Idaho can expect to pay roughly $3.50 per watt of installed solar. This means that if they were to install a 3 kilowatt system, they should expect to pay roughly $10,500. They could then subtract the 30% Federal Investment Tax Credit and the 7.4% state income tax credit to pay an estimated out of pocket cost of around $6,500. The average time for a solar system to pay for itself in Idaho is just under 9 years. Due to the available state tax credit for solar, Idaho receives a solid B grade.
The state of the industry in Nevada is quite strong. Their legislature has passed a Renewable Portfolio Standard (RPS) of 25% by 2025. This means that 25% of all of the energy generated in this state must come from renewable resources, solar included, by the year 2025. This is one of the biggest drivers of solar development in the state. Because there is a lot of open land in Nevada, solar farm size can get quite large. Additionally, customers that live within NV Energy territory can get a rebate on their solar system equal to $0.15 per watt installed. This means that a homeowner installing a 5 kilowatt system can receive a rebate equal to $750. Additionally, Nevada is another net metering state. Because only one utility in the state offers financial incentives, this state receives a grade of C+.
New Mexico, because of its location in the southwest, receives tons of sunlight every year making it a great place for homeowners seeking to go solar. The importance of solar energy is not lost on the legislators of New Mexico. This is because they have passed a tax credit which can be claimed when utilized with new sustainable buildings which includes new homes. This tax credit is equal to $6.50 per square foot of the new sustainable home. This unique building program paired with a net metering program affords New Mexico a B grade for solar usage.
Texas is a large and mostly flat state that gets plenty of sunlight each year. Additionally, Texas allows homeowners to have a property tax exemption for the increase in value of a home that a solar system provides. Additionally, many local utilities offer tax credits for solar although the state as a whole does not. For example, CPS Energy customers in Texas can receive a credit equal to $1.20 per watt of installed solar. What is net metering like in Texas? Unfortunately, it is not available in all parts of the state but many individual utilities do offer its use to their local customers. If you are a Texas resident, be sure to contact you local utility to see all of the available incentives related to solar. Because Texas’ programs are very localized to specific utilities, they receive a C grade as a state.
Utah is taking on some bold strategies to reduce total fossil fuels used in the state to generate power. Perhaps the biggest financial incentive is a 25% tax credit that all homeowners in Utah can use up to a maximum value of $1,600. This means a system which would normally cost $6,400 would now only cost $4,800. This tax credit, paired with net metering throughout the entire state afford Utah an A grade for solar renewable energy used.
Virginia offers some very unique incentives for some of their residents. More specifically, these financial benefits are available to all residents who live within the Tennessee Valley Authority (TVA) distribution area. All TVA customers can opt into a green power program which can pay them a premium price for all excess solar power exported to the grid from their home clean energy network. This way, homeowners will be able to lower their payback period and see a more robust financial return on investment. Additionally, Virginia is one of the net metering states that offers this benefit to all residents. This helps raise the solar grade of Virginia to a solid B.
The importance of solar energy goes far beyond saving consumers thousands of dollars every year. It allows the nation to rely much less on fossil fuels used to generate electricity which in turn emit harmful greenhouse gases into the atmosphere. If you would like more information about how solar can help preserve the environment, consider attending a global climate change POGIL which can help makes this more clear. If your state does not currently have a great solar grade, fear not. New laws and programs are passed each year that will hopefully help thousands more homeowners to make the switch to solar.