Your 2019 guide to getting solar panels for your home in Nevada
This page is a complete guide to the complicated and sometimes confusing process of installing solar panels on your Nevada 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 **
Oh Nevada, land of just a little bit of everything; skiing, deserts, mountains, lakes, the annual Cowboy Poetry Gathering, and oh yeah, Reno and Vegas. With all those lights keeping Vegas turned on, Nevada needs lots of electricity. That kind of demand calls for piles of nice, clean, renewable, solar power.
Good thing your citizens know how to fight for renewable energy!
With the recent reinstatement of something resembling an awesome net metering program, home solar in Nevada is back in business! You can purchase a solar system with cash or a loan, and see a good return on your investment over 25 years. Read on to find out how to make solar work for you in Nevada!
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 Nevada solar incentives you see below.
The Solar Strategy section is focused on the 3 ways of paying for solar in Nevada, 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 Nevada. 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 Nevada.
Click any of the boxes below to go to that section of the page, or scroll down to read the page in order.
|Your Nevada Solar Strategy|
|Comparing Solar Investment Options|
|Paying Cash for Solar in Nevada|
|Solar Loans in Nevada|
|Solar PPAs in Nevada|
|Solar Purchase Payback Time in Nevada|
|Nevada Solar Policy Information|
|Renewable Portfolio Standard (RPS)|
|RPS Solar Carve-Out|
Your Solar Strategy in Nevada
Figuring out the best way to go solar in Nevada 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 Nevada
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 of 2016, net metering is back in Nevada, and you'll get compensated at 95% of the retail rate for any excess energy your system produces.
In the chart above, we've examined three scenarios for going solar here, including paying with cash up front, getting a loan for a 5-kW syatem, and getting a loan for a 2-kW system. The returns on solar here are pretty great with net metering back in place. Read more below about each of the three options for solar in Nevada.
Option 1: Paying cash for solar
An outright purchase used to be the only way to get solar, but with new low-interest solar loans, it;s better to finance than to pay up front. Check out the return on a solar loan to get a good idea of why that's a better option.
If you have the cash and you really want to spend it now, buying solar here will result in a modest return on your investment. Panels generally come with a 25-year warranty and performance guarantees, and in Nevada, they'll save you enough in electricity costs over that period to result in nearly $19,000 in profit. That's quite a bit better than you might do by investing in stocks, because of NPV.
Here’s how the numbers work for a 5-kW rooftop solar system in Nevada:
- Installing a typical 5-kW solar system should start at about $16,762 after NV Energy's rebate.
- The Federal government offers a great income tax credit of 30% of system costs (after rebate). That's $5,029 you won't be paying to Uncle Sam this year, and it brings your first-year investment down to $11,733.
- After that tax credit, we subtract your first year’s energy savings, which we estimate to be $920. That reduces your cost after the first year to only $10,813—a savings of about 35% off the cost of your system. That's a huge cost reduction!
- Your electricity savings will slowly add up, and your system will pay for itself in year 11. But your panels carry 25-year warranties, and they'll likely keep on kicking out kilowatts for a few decades or more. You'll see a total net profit of $19,085 by the end of that warranty. The internal rate of return for this investment is 10.1%; better than putting your money in an index fund, which typically sees about 8% returns.
- In addition to that cash, you’ve created some green for the earth as well by not using electricity from fossil fuels. It's like planting 130 trees a year, every year your solar power system is humming.
Keep in mind, the numbers above are based on an average home in Nevada. 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
Well that's a nice chart, mostly becasue it starts with a big profit. You start out that windfall because you'll be paying over time for the panels but you get the 30% federal tax credit at the end of year 1.
A solar purchase like this makes better sense in Nevada than paying up front, because you can take advantage of the tax benefits now, and pay over time while your solar panels save you money! All told, getting a loan to pay for solar in Nevada is quite a bit better than investing in the stock market.
Here’s how the numbers pencil out for a 5-kW solar purchase with a loan in Nevada:
- Installing a typical 5-kW solar system should start at about $16,762 after NV Energy's rebate. That's how big your loan will need to be to cover it.
- Between using some solar electricity and selling some back to NV Energy, you'll save $921 on your utility bill this year. But the loan payments on your system will be $1,539, meaning your net cost is $618, but then...
- You'll get the federal tax credit of 30% of system costs, for the whole price of the system after rebate. That's $5,029 back, meaning you'll come out $4,411 ahead after year 1.
- Each year after the first, your energy bill savings will offset some of you loan payments. Once the loan is paid off after year 15, you'll be saving over $1,200 for the rest of your system's 25-year warranty.
- According to our 25-year estimate, you'll end up with $12,765 in profit, which isn't so bad for an investment that requires no money down.
- The good news is your system will mean green for the environment—130 trees-worth, every year! That might be enough to make you happy, but there are far more cost-effective ways to save the planet.
Keep in mind, the numbers above are based on an average home in Nevada. 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)
Nevada 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!
Nevada 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 Nevada:
25% by 2025
Nevada should pat itself on the back. It already had one of the most aggressive renewable portfolio standards (RPS) in the country—and with a solar carve out to boot—but its citizens voted in 2018 to take the frist big step toward doubling that requirment to 50% by 2032! Currently, the state is required to source at least 25% of its power from renewables by 2025, but given that vote and new pro-solar governor Steve Sisolak, we're pre-emptively awarding an A here in anticipation that the RPS increase that everyone seems to want will come to fruition.
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
1.5% by 2025
Additionally, 6% of that 25% (or 1.5% of total sales) needs to come from solar by 2025. If not, utilities get slapped with sizable fees. That’s a huge reason why there’s so much solar installed in the state.
However, much of the compliance has come from huge solar businesses who have secured land lease deals in the desert to build solar power plants so the utilities can hit their numbers.
Luckily, the RPS now contains a distributed generation requirement stipulating that half of the 25% renewable target must come from residential customer service locations. This means Nevada utility companies should be much more willing to offer solar power rebates to middle-class homeowners instead of millionaire land development moguls.
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!
Nevada Electricity Prices
Electricity is relatively cheap in Nevada at $0.12/kWh. That’s a little too cheap for our liking, as there could be more done to roll in the actual costs to the environment to polluting energy sources such as coal and natural gas. Once those costs get accounted for, the average Nevada electric rate may increase to the point where solar panels on homes in the state pencil out at more parity with the electric grid.
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.
Nevada Net Metering
The fight to ensure strong net metering rules for Nevada has been long and complex. Basically, the state used to have excellent net metering rules, but in late 2015, the Public Utilities Commission of Nevada (PUCN) voted to amend net metering, allowing NV Energy to increase monthly service charges by 300% on solar homeonwers while at the same time paying 82% less for the energy their panels generate.
The people of Nevada, joined by solar-loving groups from around the country, fought against the PUC ruling, and vowed to vote to remove any polititian who stood in the way of net metering's return. In November, 2016, voters elected solar-friendly candidates to both the house and senate. Governor Sandoval (himself up for reelection in 2018) said he wanted to work together to bring back sensible solar policy. Finally, iin mid-2017, the Nevada legislature passed AB 405, restoring net metering for all residential customers.
The new net metering law, while far from perfect, guarantees net metering at very-near retail rates for the next 20 years. As the new law takes effect, homeowners who install solar will receive 95% of the retail cost of purchasing electricity back for any extra power they send to the grid. As more solar gets installed, that rate drops—by 7% for every 80 MW of new solar installatons in the state. Basically, about every year the rate will drop, until it reaches a floor of 75% of retail price.
The new net metering rules provide a compelling reason to go solar as soon as possible. In order to get in on the best rates, it will be necessary to install a system within the first 80MW tier. After the 20-year net metering term, the solar owner will be able to sign up for whatever program the utility offers (though by then, energy storage will likely be so inexpensive that it will be easier to install a battery and use all the energy yourself.
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.
Nevada Interconnection Rules
Getting a solar system up on the grid in Nevada is not too difficult, given NV Energy's reasonably streamlned interconnection process. There are no large costs or extended wait times associated with interconnection here, and your installer should be able to take care of everything with regards to paperwork, inspection, etc.
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 Nevada
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 Nevada measures up:
Nevada Solar Power Rebates
Even though NV energy has had, shall we say, a spotty history of supporting home solar power, the utility is still offering its "RenewableGenerations" solar rebate program. The current incentive level is $.20/watt of solar installed, which for a 5-kW solar installation works out to $1,000, or about 5% of the total cost.
Remember, if you sign up for a solar rebate under the RenewableGenerations program, you're not eligible for the state's Portfolio Energy Credit payments, but that's okay. The rebate is cold hard cash back as soon as your panels are installed, so it's the best way to go.
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.
Nevada Solar Power Tax Credits
No State Income Tax
Since Nevada doesn’t have any income tax, there aren’t any solar tax credits to redeem! However, you Nevadans still benefit from the 30% Federal Solar Tax Credit. There's no cap on the federal tax credit and the policy was recently granted an eight year extension. Sample calculations follow below -- keep scrolling!
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
Every solar installation in the state earns a special kind of financial benefit for its owner called Portfolio Energy Credits (PECs). Systems that were installed before December 31st, 2015, earned 2.4 PECs each time the system has generated 1 kilowatt-hour (kWh) of electricity. The PECs can be sold to utility company for cash. Sadly, systems installed in 2016 and beyond earn only 1 PEC per kWh.
PECs might seem complicated, but they are worth learning about, because it can mean hundreds of dollars in income every year for you. PECs have value because utility companies need to meet their renewable energy goals under Nevada's RPS law, and if they don't, they have to pay a big fine. In order to meet those goals, they purchase PECs as proof of renewable generation.
Each PEC sells for a couple pennies, which might not sound like a lot, but it adds up. A typical 5-kW system will earn you a little less than 7,800 PECs in a year, which translates to about $187 for you. And since the RPS goals are in place until 2025 (unless they're extended and increased!), you can count on some income until then.
That means your PECs could be worth over $1,600 to you over the next 10 years. Unfortunately, if you choose to keep and sell your PECs, you won't be eligible for NV Energy's RenewableGenerations rebate program. And although the PECs might be worth a little more over time, the rebate is cold hard cash right now.
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
100% for solar farms only
While Nevada is kind enough to grant property tax exemptions to commercial and industrial solar installations, homeowners are still expected to pony up the dough for the increased value of the home after solar installation.
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
Same story here. Nevada grants sales tax incentives to large-scale (we’re talking 10MW big) solar installations, but none for you. We would like to see a sales tax exemption on residential systems in Nevada like many other states have enacted. We’ll wait and see on that.
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 Nevada solar power rebates and incentives
Nevada is well on its way to building a solar power market. While the previous focus had entirely been on utility scale solar installations, there are now compelling reasons for all homeowners in the state to explore solar power as a worthy home investment.
Governor Brian Sandoval can urge the legislature to consider a state residential solar tax credit, implement a smaller scale solar distributed generation program as part of the state’s RPS, and add a solar sales tax exemption for homeowners.
Doing these things would create many more jobs in the state and go a long way toward turning the local economy around.
With all that sunshine in Nevada, it can be done. We’re waiting patiently to improve your grade even further.
In the meantime, we urge you to still get a personalized solar quote so you can see how the numbers pencil out for you.