What Are the Top States for Residential Solar This Year?
Last Updated on
When it comes to solar, not all states are created equal. Natural geography, state-level incentives, and the policies of individual utility companies all play a role in determining whether your state is good for solar. To help you determine whether your state is a good choice for going solar, we’ve put together a list of the top states when it comes to solar power. Each state will have a quick overview of the factors that go into its ranking. Note that this list isn’t ranked, but instead represents the states in alphabetical order. Keep in mind that there are a number of federal-level incentives, such as the solar ITC, which we will not be covered in this article. Without further ado, here is the list.
Arizona’s sunny climate presents many opportunities for solar. While it’s a common misconception that a hot state is better for solar (in fact, the opposite is true), a sunny state is good for solar. Arizona residents are in luck! Phoenix is the sunniest city in the United States. This means that there will be plenty of opportunities for solar panels.
Arizona’s Sun Hours
We’ve established that Phoenix is a sunny city, but just how sunny is it? On average, Phoenix has around 211 clear days a year for an average of 3,872 sun hours per year. If we remove Las Vegas from the equation, then the next sunniest is Sacramento at around 188 clear days per year. That’s more than a month’s worth of clear days that Phoenix gets over Sacramento! If we include partly sunny days — in which your solar panels will still produce some energy — the number of days goes up to 296.
Arizona’s Solar Incentives
You can have the sunniest state in the Union, but if the incentives aren’t there then going solar won’t be viable. While Arizona discontinued net metering in 2016, it has several other state and local incentives that help get it on this list.
Arizona’s State Solar Tax Credit
Much like the federal tax credit, a state-level tax credit exists for Arizona residents who go solar. This tax credit cashes in at 25 percent of the cost of the solar array — a tidy sum.
Property Tax Exemption
On top of the state income tax credit, solar installations are also completely exempt from property taxes. Because a solar installation can add tens of thousands of dollars to your home’s value, this represents a significant amount of savings.
Sales Tax Exemption
Much like a property tax, a sales tax on expensive solar equipment can also add up to a surprisingly large amount of money. However, Arizona waives sales taxes for solar equipment.
There’s a reason that Florida is called the Sunshine State. Florida is noted for its warm climate and winter homes. Miami and Tampa, in particular, stand out as major US cities which receive a lot of sunlight.
Florida’s Sun Hours
Florida receives a lot of sunshine. Miami, for example, receives around 3,150 sun hours per year. That puts it solidly in fifth place for the average sun hours in America. While Florida is notorious for its near-daily rainstorms during the wet season, those storms only last for an hour or two, after which the usual sunshine returns. As we see from the average sun hours, these rainstorms don’t really affect the output of a solar installation.
Florida’s Solar Incentives
Florida may lack a state-level income tax credit, but it still has several solar incentives that make going solar in the Sunshine state an attractive prospect.
Property Tax Exemption
Like Arizona, Florida has a 100 percent property tax exemption for solar installations. Any installation you add to your home will not count towards your home’s total value while calculating property taxes.
Sales Tax Exemption
Florida prides itself on being a business-friendly state. Because of this, they offer a full sales and use tax exemption for purchasing solar.
Net Metering in Florida
Florida has a solid and beloved net metering program. All investor-owned utility companies in Florida are required to participate in net metering programs at a retail rate. However, Florida’s net metering program does not apply to the many energy cooperatives that exist in the state, which is a hurdle for the growth of solar in Florida.
Nevada is consistently counted among the top states for solar. Part of this is weather, part is policy. In either case, Nevadans who choose to go solar are doing themselves a big favor.
Nevada’s Sun Hours
Nevada is one of the sunniest states in America. Las Vegas, for example, is almost tied in average sun hours per year with Phoenix at 3,838. Reno is not far behind Vegas with 3,637 sun hours per year. These are very good numbers for solar production. You are guaranteed to have hundreds of sunny days per year in Nevada.
Nevada Solar Incentives
Nevada has a few state-level incentives for prospective homeowners. These make it easier to go solar in Nevada than in many other states, despite lacking a state-level income tax credit.
Solar Energy Storage Incentives
Nevada offers a solar battery incentive, requiring an output of four kilowatts. That’s a bit less than the capacity of a Tesla Powerwall. If the battery is charged with at least 75 percent renewable energy, it qualifies for the incentive.
Solar Access Rights and HOAs
Nevada law states that no contract can stop you from adding solar to your home. This is particularly useful if you purchase a house that’s part of an HOA. Many HOAs have aesthetic and structural requirements for their homes, but they are prohibited by law from banning solar panels.
Additionally, Nevada allows solar easements, meaning that you can enter into agreements with your neighbors that ensure you always have access to proper sunlight for your panels. Your neighbors would be barred from planting trees, building structures, etc. that would disrupt your solar energy production.
Net Metering in Nevada
Nevada net metering has gone through some hurdles. It was abolished in 2015, then returned in 2017. Since then, Nevada has implemented a tiered rate structure for net metering. For most Nevadans, this means that you’ll end up at a net metering rate of 75 percent. While this isn’t as good as many states, which offer full retail rate, it is better than Arizona’s complete lack of net metering and, for many Nevadans, is better than Florida’s system.
This is perhaps not the state that most would expect to see on the list, but New Jersey has multiple factors that make it one of the most solar-friendly states in the country. They get ample sunshine and have a wide swath of incentives — some of the best incentives in the country, in fact — and their electric rates are very high, making lower power bills from solar attractive.
Sun Hours in New Jersey
New Jersey gets a respectable 2,500 sun hours. While this puts it in the bottom half of the US for sunlight received, that’s still more than enough sunlight to make a solar array worth it.
New Jersey Solar Incentives
Much like the other states on this list, New Jersey offers exemptions for both sales and property taxes, along with metering incentives.
New Jersey Solar Sales Tax Exemption
The sales tax exemption on solar installations can come to a tidy sum, given that the Garden State currently has a 6.625 percent sales tax. While not a backbreaking amount of money, the amount saved in this exemption is no joke.
New Jersey Solar Property Tax Exemption
Like all five states on this list, New Jersey offers a full exemption on property tax increases based on solar panels. This means that you would subtract the value of your solar installation from the total value of your home while calculating your property taxes.
Net Metering in New Jersey
New Jersey has strong net metering laws. All investor-owned energy utilities must offer net metering to their New Jersey customers. Additionally, some cooperatives also offer net metering. The monthly net metering rate is full retail, which makes this program very attractive for residential solar.
TRECs in New Jersey
One final factor that makes going solar in New Jersey a lucrative practice is the practice of giving Transitional Renewable Energy Certificates (TRECs) to New Jersey residents for each megawatt of power your solar installation generates. Once you have TRECs, you can then sell them on a marketplace to energy utilities, which use them to help comply with New Jersey’s renewable energy portfolio. These certificates for residential homeowners can get close to $100. If you install a system that can produce multiple megawatts of power a year, you can look at potentially hundreds of dollars deposited directly into your bank account.
New Mexico, much like Nevada and Arizona, is a sun-drenched state. While the heat of the New Mexican deserts isn’t ideal for solar panels, the tradeoff of a high percentage of sunlight in Albuquerque is well worth it. The amount of sun that New Mexico gets goes hand in hand with many solar-friendly policies that make New Mexico an excellent choice for going solar.
New Mexico Sun Hours
As stated above, New Mexico gets a lot of sun. With an average of 3,460 sun hours per year, Albuquerque shines. The amount of sun that New Mexico gets is perfect for establishing a solar installation for your home.
New Mexico Solar Incentives
New Mexico has a slate of very strong solar incentives. These range from tax credits to net metering. Because New Mexico is trying to get to completely clean energy by 2050, these incentives are likely to stick around for awhile — but that doesn’t mean that you shouldn’t take advantage of them now.
The New Mexico Solar State Tax Credit
New Mexico offers a state-level tax credit that’s very similar to the solar ITC. The tax credit covers 10 percent of the cost of the installation or $6,000, whichever is less. This can be a valuable boon to homeowners looking to install solar, as it means that you can essentially double dip on tax credits.
New Mexico Solar Tax Exemptions
Additionally, there are some taxes that solar installations can be exempt from. First among these is the state sales tax. Homeowners can apply for an exemption for their solar panels, which can be a significant amount of money.
Secondly, like the other states on this list, solar installations are exempt from property taxes. This is very helpful, as solar panels can massively increase the value of your home — thus increasing the amount of property taxes that you’ll owe.
Sustainable Building Tax Credit
In addition to the other tax incentives, New Mexico offers credit for buildings that it deems to be sustainable. This can come during the building process or during renovations. If you’re building a new home or renovating your old home to add solar, it’s best to check in beforehand to see if your home will then qualify for the sustainable tax credit.
Net Metering in New Mexico
New Mexico’s many energy utility companies offer net metering programs, which are a key part of the state’s renewable energy push. The way that a particular company implements net metering can vary, but the main utilities in New Mexico — PNM, Xcel, and El Paso Energy — all have net metering programs.