Your 2019 guide to getting solar panels for your home in Mississippi
This page is a complete guide to the complicated and sometimes confusing process of installing solar panels on your Mississippi 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 **
Between the Mississippi river delta and the gulf coast, the state of Mississippi hosts some very unique places, not to mention being the birthplace of the Delta blues and a center of the civil rights movement. Even with all of its history and natural beauty, Mississippi has been slow to get on the solar energy train.
Legislators in Jackson haven’t really done anything of note to help promote solar. While there was a really nice 2013 state solar tax credit bill (HB 793) that would have provided statewide retroactive tax credits to homeowners who installed solar panels on or after July 1, 2010, it died in committee.
Seriously, 2013. It's been that longWe need more than that from lawmakers in Jackson..
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 Mississippi solar incentives you see below.
The Solar Strategy section is focused on the 3 ways of paying for solar in Mississippi, 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 Mississippi. 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 Mississippi.
Click any of the boxes below to go to that section of the page, or scroll down to read the page in order.
|Your Mississippi Solar Strategy|
|Comparing Solar Investment Options|
|Paying Cash for Solar in Mississippi|
|Solar Loans in Mississippi|
|Solar PPAs in Mississippi|
|Solar Purchase Payback Time in Mississippi|
|Mississippi Solar Policy Information|
|Renewable Portfolio Standard (RPS)|
|RPS Solar Carve-Out|
Your Solar Strategy in Mississippi
Figuring out the best way to go solar in Mississippi 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 Mississippi
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 Mississippi doesn't have an RPS, the state isn't quite financially right for leasing 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.
What Mississippi does have, though, is sunshine and medium-high electricity prices. That means solar makes more financial sense here than in some other states. It also means there are a few good ways to go solar here and make money.
As you can see from the chart, 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 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 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. We've included examples for two sizes of solar systems with loans.
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 means you own the system from day one and reap 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 $20,000, 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 more than $10,000 in income. That's a pretty good deal, but it can't quite compete with an elternative investment in the stock market. Check out the NPV:
Here’s how the numbers work for a Mississippi solar purchase of a 5-kW rooftop solar system:
- Installing a typical 5-kW solar system should start at about $20,000.
- The Feds calculate their 30% tax credit based on actual out of pocket costs, so you'll get $6,000 back as a tax credit, for a new price (after year 1) of $14,000. Note: you can take the credit over as many years as necessary if you don't owe $6,000 in Federal taxes this year.
- Next, you'll subtract your first-year energy savings, which will add up to about $686, bringing your cost after the first year to $13,314. Those savings will continue for the life of your system, and will only get bigger over time, considering that utility companies raise their rates 3.5% annually on average.
- By the time your system pays itself back in year 16, you’ll be seeing over $1,000 per year in savings until the end of your 25-year warranty.
- When all is said and done, our estimate shows a total net profit of $10,301, with an internal rate of return of 4.6%. That's not bad, but not quite as good as a 25-year investment in the stock market. Mississippi solar isn't the best investment option—but it is a way to make a little money while doing good for the environment.
- On top of those returns, your home's value just increased by just about $18,000, too (your expected annual electricity savings over 20 years)!
- And speaking of doing good for the environment... your system will create some green for the earth by not using electricity from fossil-fuels. In fact, the energy you’re not using has the carbon equivalent of planting 104 trees a year, every year your solar power system is humming.
Keep in mind, the numbers above are based on an average home in Mississippi. 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
Usually, this is where we tell you that taking a loan for solar panels is a no-brainer, because it means investing in an income-generating asset. And technically, that's true in Mississippi, too. It's just not a sure-thing like it is in other states, because Mississippi has low electricity prices, and the savings aren't as great as in other states.
As you can see from the chart above, you'll start out with a big windfall, because with a loan, you're not putting any money down, and 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, to the tune of about $1,000 per year until you pay the loan off.
After that, though you'll save over $1,000 per year in electricity costs from your paid-for solar panels, and by the end of the system's 25-year warranty, you'll have $3,672 in profits, which is about equal to investing in stocks.
Here’s how the numbers pencil out for a Mississippi solar purchase with a solar loan:
- Installing a typical 5-kW solar system should start at about $20,000. 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 $686, but your loan payments will total $1,775, for a net cost of $1,089, or about $90.75 per month.
- That's not so bad when you consider your tax savings for the year will be $6,000! You'll come out over $4,900 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 after year 15, you’ll start see over $1,000 per year in savings until the end of your system’s life.
- At the end of your 25-year panel warranty, you'll be in black by $3,672. That's a great return for a $0-down investment!
- Finally, the environmental benefits might make you smile, too. Operating your system will take as much carbon out of the air as planting 104 trees every year!
Keep in mind, the numbers above are based on an average home in Mississippi. 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)
Mississippi 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!
Mississippi 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 Mississippi:
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. Mississippi is without an RPS, and it shows in the state’s complete lack of incentives for solar.
An RPS is critical to strong renewable energy policy. 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 don’t naturally want to give you big payments for energy you're feeding back into the grid. The main reason the utilities are aiding the transition to lower electric bills and offering incentives to put solar on roofs is because the state forces them to. Without an RPS, Mississippi is missing opportunities to help homeowners take advantage of clean, reliable solar power.
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 a mandatory RPS in Mississippi, this is another area that falls short. If an RPS contains specific carve-outs for clean and efficient technologies like solar panels, or mandates for the environmentally necessary increases in distributed generation, you 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!
Mississippi Electricity Prices
Mississippians currently pay about 11 cents per kilowatt-hour (kWh) of electricity. That’s about a penny cheaper than the national average. We know you like paying less now, but that’s only until the long-term costs kick in. Most electricity is currently produced by burning fossil fuels. All that earth-killing oil and coal may still be relatively easy on your wallet, but the long-term costs associated with fossil fuels are going to far outweigh those monthly bill savings. When new regulations that consider all those long-term costs really start to kick in, monthly electricity bills are going to inevitably rise as well. When that happens, you’ll be patting yourself on the back for having already switched over to clean efficient solar energy!
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.
Mississippi 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.
Mississippi is one of only six states in the nation without statewide net metering standards in place. Net metering remains completely at the discretion of the utility companies. That’s a raw deal for Mississippi homeowners, unless you happen to live in the TVA service area, it might be difficult to figure out how your panels will affect your electricity bill.
Mississippi Power, for its part, makes its policy pretty clear: "Any excess power from the solar system that may flow back to Mississippi Power can be credited to the customer under our CSPP-3 rate explained here."
That means you'll only get full-price savings for electricity you actually use while your solar system is generating electrcity, i.e., while the sun is shining, you're getting free energy, but you're also selling the additional generation for about half of what you would otherwise pay. Pretty raw deal, Miss Power.
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.
Mississippi Interconnection Rules
Likewise, Mississippi is one of fifteen states lacking statewide standards for interconnection. Utility companies have full discretion not only on whether to offer net metering, but also over what is required for you to get your solar power system connected to the grid in the first place.
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 Mississippi
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 Mississippi measures up:
Mississippi Solar Power Rebates
With no RPS in place, politicians and utility companies have no incentive to help promote solar power. They’re happy to leave all the costs to you… until they face stiff penalties for failing to satisfy an RPS, that is. Given all of Mississippi’s sunshine, legislators have a golden opportunity to harness cheap and plentiful energy, but they need to start pushing statewide incentives to make use of all those solar resources.
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.
Mississippi Solar Power Tax Credits
Mississippi offers no state tax credit based on your costs when purchasing a solar panel system. As mentioned above, lawmakers in Jackson can’t even get good solar legislation out of committee in the state House of Representatives. Not to worry, though; the feds offer a 30% tax credit when you install a system, which reduces first-year costs considerably, even in solar-backward Mississippi.
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
Mississippi has no solar performance payments program. Sad!
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
When you install a solar panel system on your home, it’s resale value goes up considerably. The best states for solar recognize this, and reward solar homeowners by exempting the extra value from property taxes. No dice here in the Magnolia State.
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
Mississippi also offers no exemption from sales tax, meaning you’ll pay a premium of 7% above the installed costs of your system. This is a simple way to help homeowners go solar, and Mississippi once again misses the mark.
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 Mississippi solar power rebates and incentives
The Mississippi legislature is really singing the blues when it comes to solar energy. The state’s leaders have hardly even mentioned the words in their sessions since 2005. With all the rebuilding in the aftermath of hurricanes Katrina and Ike, the state could take the opportunity to protect the environment by promoting clean energy too. It’s about time the legislature took a stand in support of solar power. As it stands, we have to give Mississippi a “F” for it’s current climate. It can’t be helped out of failing only by the level of sun the state gets and the spotty TVA incentives.
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!