Each year, Solar Power Rocks releases their State Solar Power Rankings Report. The annual report ranks all 50 states and Washington DC on 12 solar-related policies, incentives, and outcomes. Top-ranking states receive an A, while states that make going solar hardest earn an F. Each grade is then averaged together to give states an overall ranking.
New Jersey, New York, and Maryland top the list with A rankings, while Delaware follows with a B. While Pennsylvania, Ohio, and Virginia earned C rankings, that doesn’t mean solar isn’t a stellar investment in those states, especially in 2019. Electric prices in these states continue to rise as installation costs decline, providing a stable and quick payback, especially compared to other investments. In Pennsylvania in particular, SREC prices will likely increase since the border is now closed, and PA will no longer accept credits from out-of-state systems.
But don’t just take our word for it – the proof is in the numbers! Here is the return on investment and payback period averages for each state:
For benchmarking purposes, let’s compare these numbers to the stock market. According to Warren Buffett, and an analysis of average returns from 1950-2009, you should expect a 6-7% annual return if you invest in stocks. Compare this volatile investment to the safe 8%, 12%, or even 17% you can earn by switching to solar, and the difference becomes clear.
So how well does your state stack up? Read on to see the breakdown!
State legislatures mandate that utilities generate a certain percentage of energy via renewable sources by a certain date. If the utilities don’t meet this standard (either by generating it themselves or buying it from customers), they face high fees. This law is an RPS.
This is the amount of the RPS percentage that needs to be generated from the sun. The larger the solar portion is, the better incentives from utilities, making the payback for solar even greater.
The star in this category this year was Massachusetts, who doubled their existing solar carve-out! Here’s how your state fared:
Solar gets its big payback from offsetting your electricity costs. The higher the electricity price in your state, the more you save with solar, and the better the grade your state received. This year, prices increased in most states about 4.4%.
Net metering lets you get a full-price credit for all the energy your solar panels produce. A feed-in tariff (FIT), is the payment for energy in states without net metering. States that do this well have balanced policies regarding caps on system sizes, monthly kWh rollover, metering charges, REC credit ownership, and safe harbor provisions to protect customers as things change.
This grade reflects how easy your state makes it to get the power you produce on the grid and to power companies. Poor standards can make installing solar more expensive and take longer. All of our states did well across the board, meaning you’ll get a great deal on an easy installation!
Ever look at your paycheck and wish you didn’t have to part with those tax dollars? Solar tax credits put these dollars back in your pocket and go a long way to reducing the cost of your system. While the federal 30% ITC is available for everyone until the end of 2019, some states offer their own:
Whether paid out up-front to offset the initial cost or made as lump-sum payments after installation, rebates help reduce the cost of going solar. Remember the RPS? These rebates are often offered by utility companies to help avoid the RPS fees.
These are per-kWh bonuses or Solar Renewable Energy Credits (SRECs) that gives you money for producing electricity. Each state handles them a little differently.
Installing solar panels increases the value of your home significantly, and states agree that it’s not fair to pay property taxes on this increased value. Here’s how your state handles it:
Another up-front bonus is sales tax exemptions. This can reduce the cost of installing your system by hundreds. Here’s how your state does it:
When dishing out money for investments, it’s nice to know how long it will take until you start making money off of it. Solar Power Rocks calculated each state’s average for us, using factors like how much systems cost, current and historical electricity prices, performance payments, rebates, and tax credits. Here’s what you can expect in your state:
Used to measure the attractiveness of an investment universally, Solar Power Rocks estimated the IRR for home solar purchases in each state. They saw an average of 10.7%, up 1.3% from last year. For benchmarking purposes, the average IRR for the stock market is 7.8%. Way above the average was New Jersey with a 24.2% IRR, followed by New York with a 19.5%. Here’s what you can expect:
Overall, 2019 promises to be a great year to go solar. Take full advantage of the expiring 30% tax credit and these favorable policies to start saving big today!