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olar power has become a popular renewable energy source in the United States, with many homeowners making the switch to save on their energy bills and reduce their carbon footprint. However, the adoption of solar power is unevenly distributed throughout the country. Some states, such as California and Arizona, have seen a high level of solar adoption, while others, like Missouri, have yet to catch up.
According to the Solar Energy Industries Association, the state ranks only 34th in the country in terms of solar conversions, which means that PV energy systems are less prevalent here than in most other states. One of the reasons for this is that electricity rates in the Show-Me State are below average compared to the rest of the United States. With lower electricity rates, many homeowners may be less inclined to invest in photovoltaics, as they may not see the same cost savings as homeowners in states with higher electricity rates.
However, despite the low ranking and affordable electricity rates, there are still many benefits to using solar energy in Missouri. For one, it is a renewable and clean energy source that helps reduce our reliance on fossil fuels and decrease harmful carbon emissions. Additionally, the cost of PV panels and other equipment has decreased significantly in recent years, making it more financially feasible for homeowners to make the switch.
Solar power is now 29% cheaper than fossil fuels, making it a more affordable and sustainable energy option for powering homes and businesses.
Missouri solar incentives
While the upfront cost of installing a PV energy system can be a deterrent for some homeowners, there are several incentives and financing options available to make the investment more manageable. Let’s look at some critical financial benefits available for Missourians.
Federal Solar Investment Tax Credit (ITC)
The Federal Investment Tax Credit (ITC) is an excellent opportunity for homeowners and companies who want to get into solar energy. It lets you get credit for up to 30% of the cost of a PV energy system on your taxes.
ITC has been around since 2006 and has played a significant role in expanding the photovoltaic industry throughout the United States. In Missouri, where 74% of electricity is produced from coal, the ITC has been particularly beneficial in promoting the use of solar energy and reducing the state's reliance on fossil fuels.
So how does the ITC work? Basically, it allows you to claim a credit on your federal tax return for a portion of the cost of your installation. The amount of the credit varies depending on the size and type of your system, but it's generally equal to 30% of the total cost. So if you spend $10,000 on solar panels, for example, you could potentially claim a $3,000 credit on your taxes.
To qualify for ITC, the PV system must be owned outright and installed at a primary or secondary residence or for an off-site community solar project. Note that the ITC will decrease to 26% in 2033 and further drop to 22% in 2034, and will expire in 2035 unless Congress chooses to renew it.
For those considering a PV energy system, the ITC is a valuable opportunity to reduce the cost of the investment and make the switch to clean, renewable energy.
Property-Assessed Clean Energy (PACE) financing
The PACE (Property Assessed Clean Energy) financing program is a popular option for homeowners looking to install solar panels. It offers a loan using property value as collateral and allows for monthly payments through tax bills. This program is beneficial for Missourians who cannot afford a cash purchase and still allows for claiming federal credits and other incentives, unlike solar leases.
Although PACE loans may result in higher overall costs for a photovoltaic system, averaging $5,000 more than cash purchases, they also offer lifetime energy savings of around $12,000, which is only about $6,000 lower than for residents who purchase a PV system in cash.
Additionally, St. Louis has its own unique program for property owners to finance PV installations. PACE St. Louis provides long-term financing options to help property owners pay for energy-saving upgrades like renewable energy systems and improved energy and water efficiency. You pay a fixed upfront rate and then repay the funds over up to 20 years by adding payments to your property tax bills. To qualify, the energy savings from the upgrades must be more than the cost of the extra property tax assessment.
Net metering
Net metering is a policy that allows individuals and businesses with solar panels on their property to sell excess electricity back to the utility grid. In the Show-Me State, net metering is regulated by the Public Service Commission, which sets the rules and policies for how net metering is implemented.
Under the state's net metering rules, utility companies must credit solar panel owners for the excess electricity they generate. The excess electricity is measured in kilowatt-hours (kWh), and the credit is applied to the individual's or business's next electricity bill. The credit is based on the retail rate that the utility charges for electricity, which means that homeowners are compensated at the same rate that they would pay for electricity from the grid.
Overall, net metering has been a successful policy in the state, as it has encouraged the development of photovoltaics. It can significantly reduce the amount of money a homeowner spends on energy each month, making solar an increasingly cost-effective option.
Local & utility solar subsidies
Missouri may not have a state solar incentive program, but residents and businesses can still take advantage of some benefits. Some of the larger utility companies in the state, such as Columbia Water & Light, Kansas City Power & Light, and Empire District Electric Company, offer rebate programs for PV installations.
Columbia Water & Light rebate
Columbia Water & Light offers financial benefits for customers who have installed photovoltaic systems after June 2007. The rebates range from $375 to $625 per kilowatt for the first 10 kW of a system, $300 to $500 per kW for additional kilowatts between 10 and 50, and $150 to $250 per kW for additional kilowatts between 50 and 100. Pre-approval is required for a system to be eligible for these rebates, and the system must meet specific interconnection, net metering, and rebate requirements. In addition to these rebates, customers may also be eligible for federal tax credits. All energy produced by the system will be credited to CWL through the utility's net metering agreement.
Solar microinverters are devices that convert direct current (DC) electricity from individual solar panels into alternating current (AC) electricity. Notable manufacturers include Enphase Energy, APsystems, and SolarEdge.
Kansas City Power & Light (KCPL) rebate
Kansas City Power & Light (KCPL) offers a rebate program for households with net-metered solar power systems. The rebate payment is calculated based on the wattage of the solar system installed on the home, with a maximum payout of $0.25 per watt. For example, a household with a 10 kW solar system could receive a rebate of up to $2,500.
To be eligible for this rebate program, the photovoltaic system must be installed and connected to the KCPL grid. The payment rates for the rebate program may vary depending on the application date, so it is important to check with the utility to confirm your eligibility. This can be done by contacting KCPL directly or visiting their website for more information.
Empire District Electric rebate
Empire District Electric Company offers rebates to customers who install net-metered photovoltaic systems on their properties. The rebates can be as high as $0.25 per watt and are available to all retail customers on residential, commercial, and industrial rate schedules. To be eligible, the PV system must have been installed after December 31, 2009, and be new and permanently installed on the customer's property. Customers must also have an active electric account with the utility in good standing, and the installation must meet all necessary codes and standards, including the Net Metering Interconnection Standards.
Ameren rebate
Ameren utility also offers its customers a rebate when they install a solar panel system. The rebate amount varies based on the size and type of installation. For example, customers can receive $0.25/watt upfront for installing photovoltaic panels, which would save an extra $1,500 for an average 6 kW system. The rebate is capped at 25 kW for residential customers, which means that customers with larger solar panel systems may not be eligible for the full rebate.
Liberty Utilities rebate
Liberty Utilities offers a rebate for solar panel installations similar to the one provided by Ameren. If you are a customer of this utility and install a photovoltaic system, you could qualify for a rebate of up to $0.25 per watt (or $1,500 for an average 6 kW system).
Is investing in solar power a smart choice in the Show-Me State?
Despite the low ranking in solar energy adoption, the potential for solar power in Missouri is significant. With an average of more than 206 sunny days per year, the state is well-suited for photovoltaic energy production. In addition, the state's relatively low electricity rates may not always stay that way as fossil fuels become increasingly expensive.
The cost of installing PV panels in the Show-Me State is quite reasonable, with the average price coming in at $2.70 per watt. For a 6 kW panel system, this means that the total cost will be in the range of $13,700 to $18,600. The average gross price for residential photovoltaic panels is $16,200, which is a good value considering the long-term benefits of solar energy. Keep in mind that a 30% investment tax credit (ITC) for photovoltaic installations can significantly reduce the net price you'll pay, and various local Missouri solar incentives can help lower the cost further.
Over the course of 20 years, the average-sized system in Missouri is expected to save homeowners over $20,000. This is based on the assumption that you pay for the system upfront with cash rather than financing it over time. With such significant savings, it's clear that the investment in photovoltaic panels is well worth it in the long run.
The payback period for solar panel installations in the state is about 11.5 years, meaning it will take approximately 11.5 years for the energy savings generated by your PV panels to equal the initial cost of installation. After this point, you can expect to continue saving money on your energy bills for many years to come.
Embrace the renewable energy revolution with the latest insights into the cost competitiveness of solar power versus fossil fuels. Our informative resource, Solar Now 29% Cheaper Than Fossil Fuels, examines the substantial cost advantages that solar energy offers over traditional fossil fuel sources, with solar now 29% cheaper on average.
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