Your 2019 guide to getting solar panels for your home in Nebraska
This page is a complete guide to the complicated and sometimes confusing process of installing solar panels on your Nebraska 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 **
Nebraska has it all. What? you’ve never been to Carhenge? You just have to see it to believe it. Of course there are other sights in Nebraska too, like Chimney and Courthouse Rocks. Nebraska also has vineyards, hordes of cranes, dozens of antique steam locomotives, and well.. corn. What Nebraska could really use though is some nice clean solar energy, to keep itself looking good. Here’s what the state’s lawmakers have been doing about renewable power.
Seriously, though, Nebraska is a beautiful state with lots of natural bounty to protect. But when even residents of one of the state’s most forward-thinking city have shown tepid interest in supporting solar, where is the legislature, which with a few simple laws can spark a solar revolution in Nebraska like we’ve seen in other states?.
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 Nebraska solar incentives you see below.
The Solar Strategy section is focused on the 3 ways of paying for solar in Nebraska, 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 Nebraska. 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 Nebraska.
Click any of the boxes below to go to that section of the page, or scroll down to read the page in order.
|Your Nebraska Solar Strategy|
|Comparing Solar Investment Options|
|Paying Cash for Solar in Nebraska|
|Solar Loans in Nebraska|
|Solar PPAs in Nebraska|
|Solar Purchase Payback Time in Nebraska|
|Nebraska Solar Policy Information|
|Renewable Portfolio Standard (RPS)|
|RPS Solar Carve-Out|
Your Solar Strategy in Nebraska
Figuring out the best way to go solar in Nebraska 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 Nebraska
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. That might look a little complicated to you, so let's break it down:
The green bars show the return if you pay up front. As you can see, there's a big payment in year 1, which gets slowly reduced over time. The green bars cross the "$0" line at year 17, which is when the system will have paid back your initial investment with electricity savings. Then, our example goes to year 25 (which is when most solar panel warranties end), where you'll end up with just over $15,000 in total profits. Not bad! That's because even though Nebraska has pretty cheap electricity, the state gets enough sun to make the electricity savings substantial.
The orange bars, on the other had, show what happens if you take a solar loan or Home-Equity Line of Credit (HELOC) to pay for the system. You don't put any money down, but you do get the 30% Federal tax credit, meaning you actually come out ahead in year 1. The bars dip below the $0 line after 5 years, because your loan payments (over a 15-year term) will exceed your energy savings by a little each year. Still, once you pay off the loan, the savings start stacking up quickly. In the end, you'll come out thousands of dollars ahead over the 25-year estimate.
Finally, the blue bars represent a similar loan option, but for a smaller, 2-kW solar system. This size system is great if you only have a little equity, and it still saves you thousands in the long term, while reducing the amount of CO2 pollution you're responsible for. The loan size is smaller, and so are the first-year windfall and final profits, but if you love the idea of solar, this is a great way to go.
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.
Still, an outright purchase returns the most money over time, because you own the system from day one and reap all the benefits—the Federal solar tax credit of 30% of system costs, and some decent energy bill savings.
In our example, you put down $20,000, but by the end of year 1, that tax credit and the energy savings will erase a bunch of it. Over 25 years, your system will have produced nearly $9,900 in income.
Here’s an example of how the numbers work for a purchase of a 5-kW rooftop solar system in Nebraska:
- Installing a typical 5-kW solar system should start at about $20,000.
- The Feds calculate their incentive based on out-of-pocket costs, so no rebates means a bigger tax break! You'll get $6,000 (30% of the cost) back next April as a tax credit. Note: you can take the credit over several years if you don't owe $6,000 in Federal taxes this year.
- Then there's your first-year energy savings. That's another $683, and it brings the cost after 1 year to just $13,317. That's just two-thirds of the initial cost of your system!
- Finally, Nebraska offers a big big state tax credit of $.0005 per kilowatt-hour (kWh) your panels produce. That's a humongous $3.41 per year! Wait... that isn't all that big. Drat!
- Anyway, with all the energy bill savings rolling in, your system will pay itself back after 17 years. Once that happens, you’ll be seeing over $1,000 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 $9,877 with an internal rate of return of 4.4%. That's better than some financial investments you can make!
- On top of those returns, your home's value just increased by close to $18,000, too (your expected 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 114 trees a year, every year your solar power system is humming.
Keep in mind, the numbers above are based on an average home in Nebraska. 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
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. It's true! That's because the state gets a nice amount of sunshine, so even without big rebates and tax credits, it's enough to make solar worthwhile, generating a small amount of income for you after you pay your loan off.
Here's the important stuff:
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 those tax credits just like if you paid $20,000 up front for your system. You'll come out ahead nearly $5,000 after the first year! In the 14 years that follow, your loan payments will actually cost a little more than the money you'll be saving in electricity, but just think of it like a monthly deposit into a savings account.
The rest of our estimate might look like a see-saw, because you start out with a windfall, drop down into "big investment" territory, and then rocket up again after the loan is paid off. That's when the solar "savings account" will pay dividends. You'll be saving tons of money every year because you'll own the system outright. At the end of our 25-year example, you'll be $3,248 to the good, 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 qualify for a solar loan or home-equity line of credit (HELOC) for $20,000 with a fixed rate of 4% or lower and a 15-year repayment period.
- You have an appetite for making a little money with a long-term investment, while also producing benefits for the environment.
Here’s how the numbers pencil out for a Nebraska solar purchase with a 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 bill savings in the first year of operation will total $683, but your loan payments will be $1,775, for a difference of $1,092, or about $91 per month.
- But here come the tax credits! Because you've technically "paid" for the system with your loan, you'll get the Federal tax credit of 30% of system costs, or $6,000! Even after you make those loan payments, you'll end up with an extra $4,911 at the end of the first year.
- When your loan’s paid off after year 15, you’ll see over $1,000 per year in savings until the end of your system’s life.
- For our 25-year estimate, you'll see pretty nice returns, to the tune of $3,248 after all the payments. That's a huge amount of money for a zero-down investment!
- Finally, the environmental benefits cannot be overstated. Operating your system will take as much carbon out of the air as planting 114 trees every year!
Keep in mind, the numbers above are based on an average home in Nebraska. 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)
Nebraska 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!
Nebraska 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 Nebraska:
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.
An RPS would be critical to strong renewable energy policy in Nebraska. 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 would aid your transition to lower electric bills and offer you incentives to put solar on your roof would be if the state forces them to. Without an RPS, utilities have little incentive 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
The best states for solar mandate that a certain percentage of the RPS comes directly from solar energy. Without a mandatory RPS in Nebraska, 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 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!
Nebraska Electricity Prices
Nebraska pays an average of a 11 cents per kilowatt-hour(kWh) for electricity. That’s quite a bit lower than the national average of 13.6 cents. We know you love paying low bills for electricity, but there’s a big reason why energy is so cheap. It’s because most of our electricity still comes from burning millions of tons of fossil fuels.
The cost of those fossil fuels in dollars and cents may be low (for now), but the environmental costs are astronomically high. 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.
Nebraska 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.
Nebraska requires all electric utilities to offer net metering. All monthly surplus energy production is applied as a credit to your next bill at the full retail rate. Unfortunately the utility will not cut you a check for long-term surplus. At the end of every calendar year all unused surplus credits will be granted back to the utility without compensation. Net metering is available for all solar power systems up to 25 kW 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.
That’s a pretty solid net metering program. Overall we gave Kansas a “B” in this category only because of the system limits that prevent all customers from meeting on-site generation needs. Neighboring Kansas allows commercial and industrial customers to net meter with systems up to 200 kW in size, and we think that’s too low, so the bar really needs to be raised here. But all in all the regulations in place are a solid start, and the size limit shouldn’t affect your residential system at all.
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.
Nebraska Interconnection Rules
Not much to say, here. Nebraska has no statewide interconnection standards, meaning it's probably left to your utility compnay whether they even want you to hook your system up to their grid. There could be big restrictions on size, and fees and insurance costs that you shouldn't have to pay. Let's hope the state legislature gets it together on this one, soon.
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 Nebraska
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 Nebraska measures up:
Nebraska Solar Power Rebates
Like we said, no RPS almost always means no big cash incentives to support solar power. That’s generally the here, too. Lincoln Electric used to offer a small rebate program, but as of 2018, it appears to be over.
We hate to harp on a point, but let’s do it anyway. An RPS is the most efficient and effective way to kickstart strong utility-backed incentives! Utility-backed, i.e., paid for by the utilities. That’s a win-win so far as lawmakers in Lincoln and Nebraskan homeowners are concerned, right?
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.
Nebraska Solar Power Tax Credits
$0.0005/kWh for 10 years
We’ll give credit where credit is due. The state legislature’s hearts are in the right place by passing a tax credit to support renewable energy. Unfortunately effort is about all lawmakers get credit for here, because the credit is so small as to be nearly meaningless. From 2013 on, Nebraskans get .05 cents ($.0005) per kilowatt-hour of electricity they produce. How much does that come out to in a year? You can look forward to a state tax credit of about $3.41 a year. Thanks, we guess?
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
With no RPS, there is no incentive for the utility companies to buy energy from the little guy. In some of the best states for solar, utility companies pay a premium of several cents per kilowatt-hour ON TOP of retail rates. Solar power producers are seeing payback times of 7 years or less with the help of these premiums. Unfortunately, there is no such luck in Nebraska. Remember the LES rebates above? LES will also buy your system’s generation, but it only pays between 6 and 10 cents/kWh for production that exceeds your home’s usage. That’s only a cent or two more than it pays to buy electricity from coal, and certainly not the sweet deal people with true net metering are getting.
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
Nebraska has a property tax exemption for solar facilities, but they must be greater than 100-kW in size, which eliminates pretty much all residential installations. Well, if you live in one of these mansions you might be able to cram 100 kW of panels up there.
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
A sales tax exemption would save you 5.5% up-front ($1,100 on the sort of average 5kW residential system we use in our example below). We think both exemptions should be passed asap, of course, but the property tax exemption in particular is a sensible way to save you tons of cash without ever withdrawing a single penny from the state’s coffers. Oh but hey, you can get a sales tax refund if you spend $20,000,000 on a solar installation.
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 Nebraska solar power rebates and incentives
It’s about time for Nebraska to get with the program on solar energy. One small utility offering tiny incentives is not enough. The state’s agricultural base needs clean power to survive. So does its wealth of cultural and natural history. Legislators have to step up to the plate or ride off into the sunset. Nebraska has beautiful wide-open spaces, so let’s fill the legislative open space with solar power 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!