Your 2019 guide to getting solar panels for your home in Georgia
This page is a complete guide to the complicated and sometimes confusing process of installing solar panels on your Georgia home. Since there's a lot to consider, we've separated the page into sections to help you find what you are looking for. If you find this page useful, please share it with someone who might also find it interesting!
** What's new for 2019 **
The peaches may be sweet in Georgia, but solar power policy and incentives are starting to turn a bit sour after a strong start in 2008. That's when Georgia legislators passed a strong solar tax credit (now dead). Then in 2015, they passed the Solar Power Free-Market Financing Act of 2015, which opens up the state to solar leasing and power-purchase agreements, bringing cheap solar to homeowners all across the state. Sadly, that action hasn't resulted in actual companies selling actual solar PPAs.
More recently, in 2018, two pro-solar candidates for the Public Service Commission were defeated by establishment candidates, meaning maybe Georgians just don't want people fighting for their right to install solar panels and get good compensation from that? Georgia lacks many of the sensible solar policies that are steadily becoming the norm across the nation, including a strong Renewables Portfolio Standard, tax exemptions for renewable energy sources like residential solar power systems, and strong net metering and interconnection laws that lay out sufficient standards to protect consumers like you. Electing anti-solar candidates to statewaide office isn't doing you any favors, Georgia.
The end of Georgia’s decent-if-not-spectacular tax credits for solar installations was the last nail in the ROI coffin for solar purchases here. With no statewide incentives for installing solar panels, The Peach State ain’t so peachy for solar power. There is still hope, depending on where you live and how much your power company is willing to pay for the electricity from your panels. Read on to find out all about the ins and outs of solar policy in Georgia.
Questions? Our network of solar experts are on call to assist you. Simply sign up for personalized assistance on our special solar deals page. You can get discounted on-grid pricing as low as $4,000/kW! This is paired with the Georgia solar incentives you see below.
The Solar Strategy section is focused on the 3 ways of paying for solar in Georgia, so you can decide which is best for you. We've created a tool that asks you a few questions and recommends whether you should pursue a solar lease, loan, or outright purchase. Then, we provide detailed analysis of how each works.
The Policy Information section contains all our latest research on the rules set by lawmakers and the Public Utilities Commission, which determine how easy it is to go solar in Georgia. These policies and rules govern everything from renewable energy mandates to interconnection, and have a huge effect on the viability of solar.
Finally, the Solar Incentives section includes information about money-back rebates and grants, tax credits, and tax exemptions for going solar in Georgia.
Click any of the boxes below to go to that section of the page, or scroll down to read the page in order.
|Your Georgia Solar Strategy|
|Comparing Solar Investment Options|
|Paying Cash for Solar in Georgia|
|Solar Loans in Georgia|
|Solar PPAs in Georgia|
|Solar Purchase Payback Time in Georgia|
|Georgia Solar Policy Information|
|Renewable Portfolio Standard (RPS)|
|RPS Solar Carve-Out|
Your Solar Strategy in Georgia
Figuring out the best way to go solar in Georgia can be a little daunting. From loans and leases to power-purchase agreements, there are a lot of options out there. To help you pick the one that might be best, we've created the handy decision tool below.
We'll ask you a few simple questions about you and your home. Once you're done, we'll recommend a good option. Further down this page, we provide cost estimates and example return-on-investment calculations for all the various options:
How to pay for solar panels in Georgia
The chart above shows the 25-year returns for an investment in solar whether you choose to purchase a system with cash or pay over time with a loan. As you can see, the purchase option leads to the highest dollar-amount returns over time, but it also requires a big up-front investment. Part of the reason for the big investment is that Georgia homeowners need a lot of energy to power the average home. According to the U.S. Energy Information Administration, the average Georgia home needs nearly 14,000 kilowatt-hours (kWh) per year, which costs the owners over $1,600.
That's a ton of power, and you need a pretty big home solar system to make it all. Trouble is, Georgia doesn't have amazing net metering rules, so you can't make your system too big, or you'll end up selling power back to the utility company for pennies on the dollar. We estimate the average home will need an 11.1-kW system, made up of thirty-four 325-watt panels. To pay for that bad boy, you'll need about $33,300, either in cash or a loan.
Speaking of a loan: if you take a solar loan or home equity line of credit (HELOC), you'll have to make payments over 15 years, but because of the unique way the federal solar tax credit is structured, you'll come out a few thousand ahead in year 1, and make payments on the principal while enjoying electric bill savings.
If you're ready to learn more about paying for home solar in Georgia, read on to learn more about each option.
Option 1: Paying cash for solar
An outright purchase used to be the only way to get solar, and it's still the option that provides the best dollar-for-dollar returns. The reason it's so great is that you own the system from day one and reap all the benefits. The Federal tax credit and electricity savings bring your first-year costs down.
In our example, you put down $33,000 up front, but by the end of year 1, incentives and energy savings will erase a bunch of it. Over 25 years, your system will have produced nearly $11,000 in income.
Here’s how the numbers pencil out when you pay up front for an average-sized 11.1-kW rooftop solar system in Georgia:
- Installing a typical 11.1-kW solar system should start at about $33,000. Don’t worry – even without rebates, your first-year costs will be considerably less than that.
- Since the Feds calculate their incentive based on actual out of pocket costs, the lack of rebates means a bigger federal solar tax credit. Subtract $9,900 (30% of $33,000) for a new price of $23,100.
- After the tax credit we subtract your first year’s energy payments from Georgia Power, which we estimate to be about $1,100. That reduces your cost to only $22,000.
- Electricity is cheap in Georgia, which means your system will pay itself back pretty slowly; with initial payback after 18 years. Over its 25-year life, you'll see a total net profit of over $12,000, after the system pays for itself. That's an internal rate of return of 3.2%, meaning you might be better off putting your money in a retirment fund.
- And don't forget... your home's value just increased by around $23,000, too (your cost after incentives)!
- In addition to all that cash (and home value), you’ve created some green for the earth as well by not using electricity from fossil fuels. It's like planting 231 trees a year, every year your solar power system is humming. That's nothing to sneeze at!
Keep in mind, the numbers above are based on an average home in Georgia. If you're ready for a custom quote for a solar panel system, our network of experts are on call to assist you. Simply sign up for personalized assistance on our special solar deals page.
Option 2: Using a loan to pay for solar
Oof, look at that chart. It starts out so promising, with the tax credit actually helping you turn a profit in year 1. But then your loan payments exceed your energy bill savings by so much, you end up $17k in the hole by the time the loan is paid off. Then you scrape up the savings for the last 10 years, ending up just barely breaking even. Read more about how it works below, and if you get quotes from solar installers, compare our cost numbers to theirs. If you can get a system for cheaper, the economix make so much more sense.
The reason a solar loan is supposed to work so well is that you don’t have to put any money down, but you still get all of the incentives that go along with buying solar. You'll get the 30% federal tax credit and the energy bill savings will start right away. The bad news is your loan payments will be higher than those energy bill savings, so you'll end up spending about $170/month for solar in the first year. That difference will come down each year as electricity prices rise, but your system will keep on producing about the same amount of electricity.
Here’s how the numbers pencil out for a Georgia solar purchase with a solar loan or HELOC:
- Installing a typical 11.1-kW solar system should start at about $33,000. That's how big your loan will need to be.
- Your electricity bill will be reduced to the tune of $1,100. But your loan payments will be $3,050, for a difference of $1,950 this year, or about $160 per month.
- That's not so bad when you consider your tax savings for the year will be $9,900! You'll come out over $8,000 ahead in year 1, which should help ease the burden of loan payments for a few years, at least.
- When your loan’s paid off in year 15, you’ll start see over $1,500 per year in savings until the end of your system’s life.
- For our 25-year estimate, you'll end up almost breaking even again, at -$390. Again, if prices from Georgia Power rise faster or if your system cost is less, this could be proft.
- And your children's future is going to look a little brighter, since your system will mean green for the environment. It'll be like planting 231 trees every year!
Keep in mind, the numbers above are based on an average home in Georgia. If you're ready for a custom quote for a solar loan, our network of experts are on call to assist you. Simply sign up for personalized assistance on our special solar deals page.
Option 3: Buying the electricity, not the panels with a Power Purchase Agreement (PPA)
Georgia does not offer solar Power Purchase Agreements or leases. Perhaps it would be a good idea to contact a solar advocacy organization and ask them to fight for solar in your state!
Georgia Solar Policy Information
Ever wonder why solar seems to be everywhere in some states, but not in others? We did too.
State legislatures and public utilities commissions can enact rules to make solar power accessible for everyone. Favorable rules explain why some of the cloudiest states—New York, New Jersey, and Connecticut, are doing so well with solar, and yet some of those with the most natural solar resources—like Alabama, Mississippi, and Georgia—are doing so poorly.
Below is important information about the public policy, rules, and economic reasons that affect your ability to go solar here in Georgia:
A Renewables Portfolio Standard (“RPS”) requires utilities in the state to eventually source at least a certain percentage of their electricity from clean, renewable sources like solar panels. Unfortunately Georgia is one of a minority of states that has yet to pass any RPS. The legislature is missing a big opportunity to help safeguard your environment and save citizens money.
We see the same pattern all across the country. In states with renewable energy targets written into the law (and penalties for failing to meet those targets), the state and the utilities come together to offer strong incentives for residential solar power. In states that lack an RPS the landscape is far more murky. There might be the occasional tax credit or utility-specific performance incentive, but states that lack an RPS generally lack a cohesive policy to encourage renewable energy.
Bottom line: If we want a strong future for renewable energy here, we need a strong RPS—ASAP. Utility companies aren't really all that gung-ho about you producing your own power. After all, it costs them money when you use less of their electricity. They also naturally don’t want to give you big payments for energy you're feeding back into the grid. The main reason the utilities in other states are the transition to lower electric bills and offering incentives to put solar on homeowners’ roofs is because the states force them to. If the utilities don't hit their RPS numbers, they have to pay large fees back to the states. Not so in Georgia.
What's an RPS? Your state legislature paves the way for strong solar energy incentives to flourish by setting standards for renewable energy generation within their territories. Those standards are called the state’s renewable portfolio standard (RPS). If utility companies do not meet these standards, they must pay alternative compliance fees directly to the state. Many utilities then determine the best ways to source their energy from renewable sources that are less expensive than this fee.
An RPS is a mandate that says "Hey utilities! Y'all now have to make a certain percentage of your electricity from renewable sources. If not, you'll have to pay us huge fines." The consequences are good, because utilities usually try to meet these RPS standards by creating solar power incentives for you, the homeowner. Read more about Renewable Portfolio Standards.
RPS solar carve out
The best states for solar mandate that a certain percentage of the RPS comes directly from solar energy. Without an RPS in Georgia, this is another area that falls short.
What's a solar set aside? A solar set aside guarantees a specific portion of the overall renewable energy mix generated comes from the sun. For those states with progressive standards, high alternative compliance payments, and clear solar carve outs, the faster those areas become ripe for solar.
Some states have higher alternative compliance fees than others, and some states have more progressive alternative energy standards and deadlines than others do.
For instance, New Jersey has an overall RPS of 22.5% by the year 2021. That requires local utilities to source 22.5% of their energy mix from renewable sources by the year 2021. Pretty good. However, New Jersey also has a specific solar set aside of 4.1% by 2028. That’s the type of firm commitment which really gets the industry rolling forward. No wonder why New Jersey is one of the hottest solar markets right now!
Georgia Electricity Prices
Electricity runs about 12 cents per kilowatt hour (“kWh”) here. That’s pretty low. In fact electricity here is nearly even with the national average.
Why do we pay so little for energy? Sadly it’s because our energy is backed by lots of earth-killing, non-renewable fossil fuels. The effects of all those fossil fuels are already starting to rear their ugly ozone-destroying heads. Not to mention the fact that the price of all those fossil fuels has been steadily climbing higher and higher. The price is only going to keep rising, and rising… and rising, and those shiny solar panels on your roof are going to look better, and better, and better.
Whatever you think of the environmental side of things, solar power will save you money. The price of electricity rises about 3.5% per year, meaning that solar will save you more every year. New government regulations and supply shortages will cause price increases going forward. People who switch to solar now will inevitably reap the benefits of that good decision-making for decades to come.
Why are electricity prices so important? Because that is what solar power is directly competing against. The cost to produce power with solar is relatively constant (of course how much sun hits your area has an effect), so if you are paying $0.40 per watt for power, then you make FOUR TIMES AS MUCH as the guy or girl paying $0.10 per watt electricity.
The caveat here is that if the $0.10 per watt person has a HUGE rebate, they may be better off than the $0.40 per watt person. Because of that, states without any renewable standards tend to be heavily reliant on cheap coal for electricity, and also have very low electricity prices. When electricity prices are artificially low, that hinders the ability of solar energy to achieve meaningful payback in the state.
Georgia Net Metering
Net Metering requires your utility to monitor how much energy your solar power system produces and how much energy you actually consume, and make sure you get credit for the surplus.
Unfortunately that’s about all Georgia’s net metering law says. There are no safeguards to stop the utilities from springing unanticipated fees on you, a cap on residential systems that may not allow all customers to produce all of their energy needs and still take advantage of net metering, and a woefully small aggregate capacity limit.
The aggregate capacity limit is essentially a limit on the number of people that can hook up to one grid to take advantage of net metering. Georgia’s aggregate capacity limit for net metering is currently only 0.2% of the total circuit load. We won’t bore you with the technical details; sufficed to say, that’s low. Real low. If many of your neighbors are already producing their own power, you may find yourself waiting for space on the grid because of the draconian standards the state has set.
We still give Georgia a B in this area, because the current climate for net metering is good. Even without state regulations, the utility companies are buying solar power from homeowners, sometimes at a premium. For example, Georgia power has what they call a solar buyback program that pays (at the time of this writing, $0.17/kWh for solar power connected to the grid. That’s more than $0.04/kWh above the average retail rate. They’re not obligated to do it, but with people all over the state interested in buying it, your solar roof is an asset in this way, too.
What is net metering? Net metering is the billing arrangement where you can sell excess electricity back to your utility for equal the amount you are charged to consume it. The more customer friendly net metering policies, the higher the grade.
The grade here specifically reflects individual solar system capacity, caps on program capacity limits, restrictions on “rollover” of kWh from one month to the next (yep just like cell phone minutes), metering issues (like charges for new meters), Renewable Energy Credit (REC) ownership, eligible customers and technology (the more renewables the better), being able to aggregate meters across the property for net metering, and safe harbor provisions to protect customers from solar tariff changes.
Georgia Interconnection Rules
Georgia Power Only
Georgia sadly also lacks any regulations preventing utilities from requiring redundant external disconnect switches or separate liability insurance that can unnecessarily cost residential customers money. Nor do the net metering and interconnection laws contain any safe harbor language to protect customers from unexpected fees sprung on them by the utilities.
The state gets a "D" in this area, because of Georgia Power's current interconnection policies, but without some action from the state to solidify some good poilcies going forward, we can't give a better grade here.
Interconnection rules are a little technical, but they basically allow you to “plug in” to the electric grid with solar panels on your roof. The more complex, out of date, or nonsensical the state rules are for plugging into the grid, the lower the grade.
Specifically, the grade reflects what technologies are eligible, individual system capacity, removing interconnection process complexity for smaller systems, interconnection timelines and charges, engineering charges, prohibiting the requirement of unnecessary external disconnects, certification, spot interconnection vs. wide area interconnection, technical screens, friendliness of legalese, insurance requirements, dispute resolution, and rule coverage.
Solar Incentives in Georgia
Next to high electricity prices and net metering, solar incentives have traditionally been the most important factor for whether home solar power makes financial sense in a state. In the past, some states with otherwise lousy policy had tremendous incentives that drove down the up-front cost of going solar so much that homeowners could save oodles of money even without net metering or a good RPS.
These days, the big incentive most people can get is the Federal Solar Tax Credit that earns you 30% of your costs back after just 1 year. State incentives play less of a role than in the past, but some really good ones are still out there, ready to help homeowners go solar and save money before you know it.
Let's see how Georgia measures up:
Georgia Solar Power Rebates
Georgia lacks any statewide solar power rebate program. A few small utilities offer rebates, but the payments are fairly meager compared to some that we’ve seen. Let’s take a look at the rebates available:
|Utility Name||Rebate Amount||Rebate Cap|
|Central Georgia EMC||$450/kW||$4,500||GreyStone Power||$450/kW||$4,500|
Sadly, for the many Georgia residents who use Georgia Power, there isn’t any rebate available. The numbers above are current as of 2014, but are subject to change. Our qualified local installer partners can help you navigate the process, including applying for rebates for you. Why not sign up for personalized assistance and see what kinds of incentives are available to you?
How do solar rebates work? Similar to getting a rebate card from your local big box store for a dishwasher purchase, state legislatures also provide rebates for solar panel purchases to spur on investment and create new jobs. If you purchase the solar panel system yourself, you qualify for this free cash, which many times is a lump payment back to you. Some solar installers like to take this amount directly off the total installed price, and they'll handle the paperwork for you to make things a lot less complex.
The availability of state and utility rebates were sourced from the Database of State Incentives for Renewables and Energy Efficiency. The better the rebates, the higher the grade.
Georgia Solar Power Tax Credits
Georgia used to have a good solar tax credit for homeowners switching to clean solar power. The program offered a credit of up to 35% of the total installation cost, up to a maximum of $10,500. That was on par with a number of states with a strong RPS. Unfortunately, however, the program ran out of funding. Now, the only solar tax credit Georgia residents can take is the Federal Solar Tax Credit. Here’s hoping that for 2017, Georgia can come through with a new tax credit.
About state solar tax credits: State tax credits are not technically free money. However, they are 'credits' and not 'deductions' which means that if you have the tax appetite to take advantage of them, then they can be a 1-to-1 dollar amount off your taxes instead of a fraction of the cost of the system. So that means they can be an important factor to consider. In certain circumstances, state tax credits can provide a very powerful incentive for people to go solar.
(Keep in mind, we are not tax professionals and give no tax advice so please consult a professional before acting on anything we say related to taxes)
The availability of personal tax credits for solar energy were sourced from the Database of State Incentives for Renewables and Energy Efficiency. The higher the tax credit amount, the higher the grade.
Solar Power Performance Payments
Performance payments in Georgia used to come from the municipal and cooperative electric utilities that purchase power from the Tennessee Valley Authority (“TVA”), but as of 2015, those incentives are no longer offered to new solar owners.
The good news is Georgia Power, the state's largest utility company, offers a performance payment scheme (of sorts). The company currently pays solar owners a rate of $0.17/kWh for all energy—more than 4 cents higher than the retail electric rate. It isn’t a traditional performance payment, and it’s not guaranteed to stay that way forever, but it is a way for those solar system owners who got in early to make back a little extra in their utility bill. See more information here.
Explanation of performance payments: Performance payments represent a big chunk of the financial rationale for going solar, and in many instances they make your decision a wise one. For certain states, if you’ve got solar panels on your roof, not only will you be cutting your electric bill down to size, but you'll be getting paid additional cash from your utility company. Pretty awesome, huh? Not only are you generating electricity for yourself, freezing your own popsicles with sun, and feeling like you’re doing something smart for your children or any of the other 4 reasons people go solar, but you are getting PAID!
Utility companies are paying people with solar panels on their roofs because their states say they have to, otherwise they will pay a fee. Therefore, the payment amount to homeowners is typically a little bit less than the amount they would be billed for by the state. For states with these alternative compliance fees, Solar Renewable Energy Credit (SREC) exchanges have popped up. In the above chart, we outlined an estimate of yearly payments a homeowner might expect from the utility company for the SREC credits from their solar energy system.
Expected SREC payments were calculated by using the latest trade values in the SRECtrade database. The availability of feed-in tariffs were sourced from the Database of State Incentives for Renewables and Energy Efficiency. The higher the expected monthly payments, the higher the grade.
We've got a great article if you like to read more about what SRECs are and how to earn them.
Property Tax Exemption
Even worse is the missing property tax exemption. When you install a solar power system you save money on your monthly electric bill. The savings in electricity costs translates into a boost in your home’s value. Sadly that still means an increase in property taxes here. Georgia needs to get on board with so many other states that have already done away with that albatross on residential solar power.
About solar property tax exemptions: Property tax exemption status is a pretty big factor when putting together your investment considerations. Some argue that solar power adds approximately 20 times your annual electricity bill savings (if you are owning the system and not leasing). Other studies seem to indicate a home price premium about equal to the cost of installing the system, minus any incentives like the federal solar tax credit.
For many average-sized solar power systems on a house, that can mean adding $20,000 to your home value. And if you don't believe us, believe the bean counters: Many banks and solar financing companies now offer traditional style equity-based home loans for installing solar. An additional $20,000 in property tax basis in many states amounts to a big chunk of change owed back to the state. However, many states have complete exemptions from added taxes when you install solar on your home!
The availability of a property tax exemption for solar energy was sourced from the Database of State Incentives for Renewables and Energy Efficiency. Grades in this category are basically all-or-nothing. Either you got it or you don't. Thankfully, many states have "got it.".
Sales Tax Exemption
Georgia also lacks solar sales tax exemptions. Tax exemptions are a simple and effective way to incentivize solar power. Sales tax is 4% here, meaning a sales tax exemption would save you 4% on the purchase of your solar power system.
What's the deal with solar power sales tax exemptions? When states give you a sales tax break on solar, we notice. You should too. State sales tax exemption status for the purchase of solar energy systems were sourced from the Database of State Incentives for Renewables and Energy Efficiency. Sales tax exemptions, if present, were all 100%. A handful of states are completely exempt from sales tax regardless, and therefore received ‘A’ grades by default (OR, DE, MT, AK, and NH).
The consensus on Georgia solar power rebates and incentives
So, what’s the bottom line? We said at the outset that Georgia is lacking in a number of important areas. In particular we really want to see a strong RPS here to keep the utilities and the politicians from continuing to get free passes while we burn more and more fossil fuels.
Sadly, Georgia no longer has the 35% state tax credit, which we’d love to see come back. With the state tax credit, the payback time was significantly shorter. The Peach State is only worthy of a failing grade for now, but with a statewide rebate program and better tax incentive package, sunny Georgia could take its rightful place among the best states for solar.
Again, if you are confused about how these numbers work and would like some personalized assistance or a quote of your own, simply connect with our network of solar experts. They’ll help sort out all the pricing, get you access to special deals, and they’re super friendly to boot!