Your 2019 guide to getting solar panels for your home in Kansas
This page is a complete guide to the complicated and sometimes confusing process of installing solar panels on your Kansas 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 **
Kansas used to be the floor of an inland sea. That means the state is home to a phenomenal wealth of natural history. Not only that, Kansas is the breadbasket of America. Guess what you need to grow food? You guessed it: sun. Much of Kansas gets as much sun as southern California. With all those wide open spaces on the plains, Kansas is the perfect place to take advantage of clean solar power. Using renewable energy would protect the valuable natural history of the state and preserve its farmland too.
Lately, though, the state has been taking 1 step forward and 15 or 20 steps backward on clean power. In 2015, the state’s Renewable Energy Portfolio standard was repealed, and a voluntary system was put into place. This leaves the utility companies free to keep charging ever-increasing rates, while they shore up their own giant wind and solar farms, instead of helping homeowners take control of their energy future.
That's the bad news, but there's good news, too! Even if you don't have huge amounts of cash to lay down up front, you can get solar with just the equity in your home, and it will pay for itself and even make you thousands of dollars over the long term. Scroll down to discover the best ways to go solar in Kansas!
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 Kansas solar incentives you see below.
The Solar Strategy section is focused on the 3 ways of paying for solar in Kansas, 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 Kansas. 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 Kansas.
Click any of the boxes below to go to that section of the page, or scroll down to read the page in order.
|Your Kansas Solar Strategy|
|Comparing Solar Investment Options|
|Paying Cash for Solar in Kansas|
|Solar Loans in Kansas|
|Solar PPAs in Kansas|
|Solar Purchase Payback Time in Kansas|
|Kansas Solar Policy Information|
|Renewable Portfolio Standard (RPS)|
|RPS Solar Carve-Out|
Your Solar Strategy in Kansas
Figuring out the best way to go solar in Kansas 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 Kansas
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. Since Kansas no longer has an RPS, the state isn't quite financially right for leasing or Power-Purchase agreements yet, so we included two different sizes of solar loans—one for people with a lot of equity (or credit), and one for people with just a little.
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. A better option is to take a solar loan or home equity line of credit (HELOC). You'll put $0 down and end up with a big, big tax break at the end of the year.
Your loan payments over 10 or 15 years will be more than your electric bill savings, but you'll still come out thousands of dollars ahead by the end of your panels' 25-year warranty, with the potential to continue the savings long into the future.
Read on to find out more about each option.
Option 1: Paying cash for solar
Paying up front used to be the only way to get panels on your roof, and it's still the option that allows you the most control. But it isn't the best option from a percentage return on investment standpoint—that award goes to the solar loan option.
Still, an outright purchase returns the most money over time, because you own the system from day one and reap all the benefits. You get the 30% Federal solar tax credit and electricity savings to bring your first-year costs way down.
In our example, you put down $21,250, 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 about $14,000 in income.
Here’s how the numbers work for a Kansas solar purchase with a 5-kW rooftop solar system:
- Installing a typical 5kW solar system should start at about $21,250. Don’t worry–with tax credits and energy savings, it'll be a lot cheaper after year 1.
- Since the Feds calculate their incentive based on actual out of pocket costs, no state rebate means a bigger federal solar tax credit. Subtract $6,375 (30% of $21,250) for a new price of $14,875. Note: you can take the credit over two years if you don't owe $6,375 this year.
- Don't forget your first year’s energy savings, which we estimate to be about $862. That brings your cost after the first year to $14,013.
- By the time your system pays itself back in year 15, you’ll be seeing over $1,200 per year in savings until the end of your system’s life.
- When all is said and done, our 25-year estimate shows a total net profit of $13,928, with an internal rate of return of 5.8%. That's nearly as good as a 25-year investment in the stock market!
- On top of those returns, your home's value just increased by just about $21,000, too (your expected annual electricity savings over 20 years)!
- 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. In fact, the energy you’re not using has the carbon equivalent of planting 110 trees a year, every year your solar power system is humming.
Keep in mind, the numbers above are based on an average home in Kansas. 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
It's simple: taking a loan to pay for solar is a great idea. Someone else (your bank) puts down all the cash, while you get the big first-year tax credits—then your system produces electricity that helps offset the cost of loan payments. It's like investing in a business that's already successful.
As you can see from the chart above, you'll start out with a big windfall, because even though you're not putting any money down, you get the Federal 30% tax credit for the whole installed cost of your system. Then, over the 15-year repayment term of your loan, you'll be spending more than you're saving in electricity costs, essentially investing a total of about $6,700 until you pay the loan off.
But from there, it's up-up-up! After your loan is paid off, you'll be saving over $1,200 per year in electricity costs from your fully-owned solar panels. You'll end up $6,885 to the good after 25 years, which is great for an investment where you put nothing down!
A solar purchase like this will make sense for you if the following is true about you and your current situation:
- You can get approved for a solar loan or home-equity line of credit (HELOC) for $21,250, with a fixed rate of 4% or lower and a 15-year repayment period.
- You have an appetite for making money with a long-term investment, while also producing benefits for the environment.
Net Present Value: $1,431
Net Present Value (NPV) measures how good of an investment something is, compared to the best alternative. We use a 6% return to evaluate all solar investments, and Kansas's $1,431 NPV on a 5-kW solar system means you'd be that much better off investing in solar over the next 25 years than in, say, stocks.
Here’s how the numbers pencil out for a Kansas solar purchase with a solar loan:
- Installing a typical 5-kW solar system should start at about $21,250. That's how big your loan will need to be to cover it.
- The electricity you'll save in the first year of operation would have cost $862, but your loan payments will total $1,886, for a difference of $1,224, or about $102 per month.
- That's not so bad when you consider your tax savings for the year will be $6,375! You'll come out more than $5,350 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 $1,200 per year in savings until the end of your system’s 25-year warranty. If the panels last longer (and they probably will), your return will go up!
- For our 25-year estimate, you'll see some great profits, to the tune of $6,885, even after all the payments.
- And the future is going to look a little brighter, since your system will mean green for the environment. It'll be like planting 110 trees every year!
Keep in mind, the numbers above are based on an average home in Kansas. 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)
Kansas 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!
Kansas 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 Kansas:
20% by 2020 (voluntary)
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.
In 2015, Kansas became the first (only) state in the nation to repeal a mandate for renewable energy production. Wow. Governor Sam Brownback led the charge to change the former law from a mandate into a voluntary goal, and it's a sorry shame he did.
The ironic thing, though, is that Kansas already produces more than 20% of its electricity from wind power—enough to meet the goal and then some, and the state's share of renewables will likely only increase into the future. By repealing its RPS, Kansas is squandering a perfect opportunity to create good-paying jobs in the clean-energy sector and help homeowners take control of part of the electricity generation for the state, which has numerous benefits beyond simple financial gains
Kansas’s RPS was critical to strong renewable energy policy. Utility companies aren't really all that gung-ho about you producing your own power. After all, it takes money out of their pockets when you use less of their electricity. The main reason the utilities would aid your transition to lower electric bills and offer you incentives to put solar on your roof is because an RPS forces them to. Without an RPS, Kansas utility companies have no reason to help homeowners go solar.
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
If the RPS contained specific carve-outs for clean and efficient technologies like solar panels, or mandates for the environmentally necessary increases in distributed generation, you’d see even stronger incentives for residential solar power.
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!
Kansas Electricity Prices
Kansas pays an average of 13 cents per kilowatt-hour (“kwh”) of electricity. That’s almost exactly the national average. We know you like the cheap electricity, but the long term costs of those prices are through the roof. All that cheap electricity is produced by burning fossil fuels. Millions upon millions of tons of greenhouse gas-producing, ozone-killing fossil fuels. New regulations on carbon emissions and dwindling supplies will likely drive the cost up over the next few decades. But while everyone else is paying through the nose for the fuels of the past, you’ll be rocking that sweet, shiny solar power system on your roof, and making money! Just remember to thank us.
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.
Kansas 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. Kansas does a couple of screwy things with its net metering rules that really tick us off. First off, they'll give you retail-rate bill credits for any kWh up to your monthly usage, which is fine. But if you generate more energy than you use in a given month, the utility credits you for the extra at its avoided cost rate (meaning what they pay wholesale energy providers like coal-fired power plants).
This abomination that Kansas calls "net metering" is available for residential systems up to 15kW in capacity on a first-come first-serve basis until net-metered systems reach a total of 1% of a utility’s peak electricity demand during the previous year. On top of that, there's a dark secret that makes Kansas really earn that "D" we gave them above. It's called a "demand charge"—a terrible, horrible, no good, very bad thing—and Westar Energy is the first electric company in the nation to successfully get away with one. That leaves the Topeka/Lawrence/Hutchinson/Wichita-area utility's 600,000 customers vulnerable to extra monthly charges in they decide to install solar panels on their roof.
Westar actually played it perfectly—for them. They got the Kansas Corporation Commission to agree to allow them to do 2 things:
- substantially decrease the per-kWh energy charge for customers who own solar panels
- begin assessing solar customers a new charge based on their maximum energy "demand" during peak hours (i.e. the highest number of kW they need to power their home during a given month in the afternoon and evening hours)
The lower per-kWh energy price will result in both decreased cost but also decreased compensation for solar owners, and the demand charge will add a new fixed amount to their bill of $3 per kW of demand during the winter and $9 in the summer. Westar estimates that the demad charge will average about $5 per month, and peak demand will average about 5-kW, meaning $25 per month added to the bills of solar owners, which can't be wiped away using solar energy credits under net metering. That's $300 per year out of the pockets of solar owners. What a pile of garbage.
KCP&L customers don't have to deal with the lower compensation of demand charges... yet, but that's not to say that they won't in the future.
Kansas also imposes system limits that prevent all customers from meeting on-site generation needs, and because electric cooperatives and municipal utilities are currently exempt from the requirement to offer net metering at all. We’d like to see the net metering program expanded to cover all utility’s and every-sized customer, and the demand charges repealed. Fat lot of good that will do, unless Kansas voters wake up an kick their corporation-loving congresspeople to the curb. VOTE, Kansans, and not for the old white guys who give millions of dollars away to the big corporate interests. Read more above about how a home solar installation pays you back in Kansas.
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.
Kansas Interconnection Rules
Legislators should use that solid foundation to expand interconnection procedures as well. Currently there are virtually no interconnection procedures in place here beyond basic safety requirements addressed in the net metering law. While lawmakers did set rules for additional liability insurance (prohibiting utilities from requiring it) and external disconnect switches (allowing utilities to require them, despite their redundancy), very little else is addressed. Interconnection could be vastly improved here by adopting the Interstate Renewable Energy Council’s standard procedures.
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 Kansas
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 Kansas measures up:
Kansas Solar Power Rebates
Unfortunately Kansas is a state without good rebates. And without an RPS, don't hold your breath, either. Voluntary renewable goals don't do much at all to push utility companies to help homeowners.
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.
Kansas Solar Power Tax Credits
The Kansas legislature hasn’t been much help in picking up the slack on residential incentives; there are no tax credits available for installing a solar power system here either.
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 are another incentive for producers of distributed energy resources like solar. In states with strong RPS goals, utility companies pay a premium price for customer-generated energy from renewable sources, to meet the requirements of the law. Unfortunately, nothing has been done in Kansas to encourage utilities to provide extra payment, and so the best you’ll see in Kansas is net metering at your retail rate. Basically, that means that any energy your solar panels produce goes directly toward reducing your electric bill every month.
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
Fortunately the legislature has passed a property tax exemption. While this won’t save you any money upfront, it will save you thousands over the long haul. Installing a solar power system adds value to your home (we’ll get to how much value in just a minute). With the property tax exemption in place, you won’t have to pay a single extra penny in property taxes for that home value increase. That saves you thousands over the three-decade life of your solar power system!
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 own the system and are not leasing). Other studies seem to indicate a home price premium about equal to solar panel cost, 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
Unfortunately lawmakers have yet to pass a matching sales tax exemption. While you may not think about it on smaller purchases, not paying that extra 6.3% would save you a pretty nice chunk of change on your new 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 Kansas solar power rebates and incentives
With all that sun and all that space in Kansas, solar energy could really make a difference in the future of the state. If only lawmakers could see beyond their own noses and take advantage of this abundant renewable resource. Some work has been done, and at least the legislature has considered the issue from time to time. Unfortunately, the bills that are passed often end up watering down or completely removing any progress on clean power generation. In short, Topeka needs to take solar energy much more seriously. The RPS and property tax incentive are a start, but they’re only enough to earn The Sunflower State one bump up to a “D” for now.
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!