Your 2020 guide to getting solar panels for your home in Oregon
This page is a complete guide to the complicated and sometimes confusing process of installing solar panels on your Oregon 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 2020 **
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 compare mulitple quotes for solar and get access to the Oregon solar incentives we cover in detail below.
Oregon's new rebate program targets low and moderate income residents. It’s a step in the right direction, though available funds are lacking. We estimate just 400 homeowners may benefit before funding is exhausted in 2020. Hopefully the positive impacts from the program can be extended into a more meaningful pool of solar funds in the coming years.
Even though the state legislature let the very, very good solar tax credit expire at the end of 2017, if you go solar in Oregon, you can be sure the state will support you for the long haul. Residential solar programs here have been progressive, and here's to it rolling on! Read on to learn why going solar in Oregon in now one of the surest investments you can make... for now.
What you'll find on this page:
The Solar Strategy section is focused on the 3 ways of paying for solar in Oregon, 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 Oregon. 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 Oregon.
Click any of the boxes below to go to that section of the page, or scroll down to read the page in order.
|Your Oregon Solar Strategy|
|Comparing Solar Investment Options|
|Paying Cash for Solar in Oregon|
|Solar Loans in Oregon|
|Solar PPAs in Oregon|
|Solar Purchase Payback Time in Oregon|
|Oregon Solar Policy Information|
|Renewable Portfolio Standard (RPS)|
|RPS Solar Carve-Out|
Your Solar Strategy in Oregon
Figuring out the best way to go solar in Oregon 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 Oregon
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 or lease. As you can see, solar in Oregon can save you money in many ways! We may pay less for electricity here than most of the nation, but we have great incentives to make solar worthwhile for everyone!
The purchase option leads to the highest dollar-amount returns over time, but look a little closer. Taking a solar loan (the orange bars) and paying for the system over time means you'll actually come out ahead in year 1!! . The reason this works is because you take a loan for the system, but you get a federal tax credit based on the entire cost. You'll start out ahead, so even though your payments over 15 years will slightly exceed the amount of money you save on energy, you'll still do well with no big payment in year 1. All you need is equity or good credit.
Lastly, take a look at the blue bars. They represent a solar Power-Purchase Agreement (PPA), which is also called "third-party ownership." With a PPA, your solar company installs panels on your roof and you pay them monthly for the energy the panels produce. You accumulate savings because your solar payments start low and rise by less than the electric company's annual rate hikes. PPAs are an excellent option if you don't have any equity or cash to put down, and they still save you money!
How we got these numbers
The numbers you see above are calculated by Solar Power Rocks staff based on several inputs. First, we go the the U.S. Energy Information Administration (EIA) and find how much energy (in kilowatt-hours, or kWh) the average family uses in Oregon. Then we use the National Renewable Energy Lab's PVWatts tool to determine about how many kilowatts (kW) of solar panels are needed to make that much electricity.
Finally, we determine the average cost of a solar installation from industry sources, apply any available incentives, account for retail energy cost increases and solar panel degradation over time, and plot the annual costs and savings on the chart you see above.
In Oregon, you need a 9.4-kW system to generate average household energy needs of 10,900 kWh per year. That system will cost an average of about $3.15 per watt, or nealry $25,000, before incentives.
Read more below about each of three very good options for paying for solar in Oregon.
Option 1: Paying cash for solar
An outright purchase used to be the only way to get solar, and it's still the option that provides the "biggest" financial returns. The reason we put "biggest" in quotes here is because it's technically true, but based on percent return for the money, a loan is a better option.
If you'd rather make monthly payments instead of putting a pile of cash down on a solar system, and if you have equity in your home or can get some other kind of large loan with an interest rate of 5% or less, a loan is the option to go with. It's like being able to start a business that is sure to succeed, just by having a roof. Read about loans below.
If you've got cash and you prefer to pay up front, you'll have to plunk down $18,750, but tax breaks and energy savings will erase a bunch of that after just 1 year. Over 25 years, your system will have produced about $20,000 in income, after your system cost is paid back. The reason this works is that solar offsets your electricity costs—enough to save you about $644 in year 1, and it just goes up from there. As the electric company raises rates, you save more and more, and more...
Because there are many rebate programs specific to certain areas of the state, we've decided to show an example of a 5-kW rooftop solar system in Portland, for a customer served by PGE. Pacific Power offers rebates, too, and so do electric utilities in Salem, Eugene, and many other parts of the state. Read below to find out more about rebates in your area, or, check how the numbers pencil out in Portland:
- Installing a typical 5-kW solar system should start at about $18,750. That's cheaper than solar has ever been, but it still might seem like a big investment. Don’t worry, because after tax breaks and energy savings, your first-year costs will be considerably less than that.
- Here comes the first cut: Oregon's Energy Trust rebate! For a PGE customer, the rebate takes $3,300 off the starting price of your system. Your day-1 costs will be just $15,450!
- And when you file taxes next year, the state and Federal governments have some tax breaks for you! The Feds calculate their incentive based on actual out of pocket costs, so take 30% of $15,450, for a tax credit of $4,635.
- Oregon's tax credits will wipe away another $1,500 of the cost, each year for 4 years in a row. Oregon has high state income taxes, so this is a big deal! After the tax credits, your first-year cost will be just $9,316.
- Don't forget that your system is kicking out kilowatts every minute the sun is shining! Your first year’s energy savings will be $644, reducing your cost after the first year to only $8,672.
- Your tax credits and electric bill savings will wipe out your system costs in 7 short years, and after that, the savings start to stack up. You'll see a total net profit of $20,249 before the end of your panels' 25-year warranty. The internal rate of return for this investment is an AMAZING 15.2%. Nearly twice as good as—and more reliable than—investing in the stock market!
- And don't forget... your home's value just increased by just about $13,000, too (your expected 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. It's like planting 106 trees a year, every year your solar power system is humming.
Keep in mind, the numbers above are based on an average home in Oregon. 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
You don't need $19,000 sitting around to pay for solar. As long as you have equity in your home, you can still own solar panels and reap all the benefits. Heck, even if you do have the cash, getting a loan to pay for solar is by far the best option when it comes to percentage return on investment.
That’s because, in Oregon, using a loan to pay for solar is like investing in a business that's sure to succeed, and also earns you state and federal tax breaks. That's right: HUGE tax breaks!. You'll come out thousands ahead this year, and you'll still see a handsome profit over the 25-year life of your system.
But there's another factor that reduces the cost of solar for Oregon homeowners: the state has excellent rebates in many of the biggest cities. Too many to focus on here, in fact. We discuss Oregon's rebate picture further down the page. Suffice it to say, for a home in the Portland metro area served by PGE or Pacific Power, a solar rebate can save you thousands of dollars.
For purposes of example, we'll look at a home in Portland served by PGE. A solar purchase like this will make sense for you if the following is true about you and your current situation:
- You can get a home-equity line of credit (HELOC) for $15,450, with a fixed rate of 5% or lower and a 15-year repayment period. Don't be put off if you're offered a higher rate. It just means a tiny bit less of the thousands of dollars you'll make with solar.
- You love making money without much risk.
Here’s how the numbers pencil out for a Portland homeowner who makes a solar purchase with a HELOC:
- After the Energy Trust rebate of $3,300, installing a typical 5-kW solar system should start at about $15,450. 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 $644, but your annual loan payments will be $1,466, meaning you'll spend $822 on solar this year, but...
- You'll also see TWO huge tax breaks. The Feds give you 30% of the cost of your system back as a tax credit, which in this case is $5,625. Then Oregon gives you another tax credit of $1,500, which you'll get this year and the next three years after! With all those savings and tax breaks, you'll end up AHEAD by $5,312 after the first year, just for getting solar panels installed.
- See how the orange bars in the chart never dip below the $0 line? The incentives in Oregon are so huge that even though you'll be making monthly payments, on average, you'll never actually spend any of your own money on solar. After your tax breaks end in year 4, your loan payments will be about $60/month more than your bill savings, and that difference will get smaller as the utility company raises rates every year.
- By the time you've paid off your loan in 2030, you'll see yearly savings of about $1,100. After 25 years, your total profit will be $13,707. Pretty amazing for a $0-down investment!
- On top of the green that will stay in your pocket, your system will mean green for the environment, too. 106 trees-worth, every year!
Keep in mind, the numbers above are based on an average home in Oregon. 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)
A PPA can be a great way to go solar if you haven't got stacks of cash or oodles of equity in your home. It's possible to get solar panels for $0-down and see savings over 25 years!
As for PPAs in Oregon: The Beaver State has really low electricity prices, so paying for solar energy only save you about $18 a month here. But the price will rise by less than the expected annual increase in utility prices, so with a PPA, you'll keep saving for the whole 25-year contract.
The panels will be installed and maintained by professionals, and all you have to do is brag to the Andersons down the street about your green habits! Over 20 years, our estimate shows a total savings of $2,942, jest for saying yes to solar!
Keep in mind, the numbers above are based on an average home in Oregon. If you're ready for a custom quote for a solar PPA, our network of experts are on call to assist you. Simply sign up for personalized assistance on our special solar deals page.
Oregon 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 Oregon:
Oregon's Renewable Portfolio Standard
50% by 2040
A renewable portfolio standard (RPS) basically requires utilities in the state to get a percentage of its power from renewable resources like solar and wind by a target date in the future.
Oregon’s renewable portfolio standard, which was updated in 2016, is the 7th best in the country, requiring large utilities to source 50% of their electricity from renewables by 2040.
All this aside, if you count hydro power as a renewable resource, Oregon already is 100% renewable for a good part of the year, when thermal (coal, nuclear and gas) generation drops down near zero for many months at a time in the spring. Hydro power doesn’t count toward RPS standards, and there’s no further target past 2040; but may future improvements in technology make the ultimate goal of 100% renewable energy possible.
Oregon's Solar carve-out and SRECs
8% from "small scale"
Oregon’s RPS looked to take a huge step forward by requiring at least 8% of capacity of all larger utilities here (namely PGE and Pacific Power) to come from “small scale” renewable energy projects. On its face, that sounds excellent. However, the words, “small scale” were written right next to “less than 50-MW capacity”.
From the looks of it, PGE and Pacific Power may not have wanted anyone with our kind of perspective to look at this requirement, because 50MW is freaking enormous. Most home installs are between 5 and 15 kilowatts. A megawatt is 1,000 times larger. Think about how large 50 megawatts is?!
This carve out really only plays out well for well industry connected, large solar farm developers on the eastern side of the state, instead of most homeowners in metropolitan areas. Boo.
Oregon Electricity Prices
The average cost of electricity is a relatively cheap $0.11/kwh in Oregon. The reason is that the Pacific Northwest has an abundance of cheap hydro-power; lavishing the region with nearly the lowest cost energy in the nation.
Prices have gone up recently, mostly because utilities are adding more and more wind power. Wind provides lots of low cost energy, but only when the wind is blowing: especially during the spring and at night. Spring coincides with large runoffs in the Columbia river, fueling hydropower to the max. Night time is when people are sleeping and not using the power. The utility has to actually pay the neighboring utilities to use extra power at times: not as great for rate payers here as elsewhere. Also, the huge fluctuations in the power supply require expensive solutions, raising rates. In spite of the difficulties, Oregon remains committed to the carbon offset that wind provides, even in the face of attendant rate increases.
As rates climb, and they will, residential solar will be a better and better alternative to the expected cost escalation. What’s more, unlike the wind, the sun shines during the day when the power is actually needed!
Oregon Net Metering
Basically, with net metering if you generate more power than you need, you’ll get a credit on your next bill. Oregon provides 100% net metering, but you can’t keep carrying the credit over from month to month like you can in some states like Connecticut and Nevada. If you could, I would expect solar systems in Oregon to be a bit larger than the typical sweet spot of 3.29 kilowatts (word on the street, Talk to your installer) as encouraged by the Oregon solar incentives.
Oregon Interconnection Rules
Overall, Oregon makes it pretty easy to connect your home solar panels to the electric grid. However, there are a few things the legislature could still do to make things even easier for homeowners looking to connect their panels to the grid. For example, the state could remove the requirement to have a unnecessarily redundant external disconnect switch. Also, Salem could extend the same straightforward interconnection procedures to all utilities, including small municipalities and electric co-ops in the state.
Overall though, Oregon has done a great job making the task of connecting to the grid as seamless as possible.
Oregon Solar Incentives
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 26% of your total system 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 Oregon measures up:
The availability of state solar incentives for residential solar systems was sourced from the Database of State Incentives for Renewables and Efficiency, utility company websites, and the state public utility commission.
Oregon Solar Power Rebates
Up to $6,000
Oregon has a long history of giving out rebates to those people who install solar systems on their homes. The amounts have decreased over time, but still remain an excellent way to reduce the costs of going solar.
For people in the Portland metro area served by Portland General Electric or Pacific Power, the rebate program is administered by an outside organization called "Energy Trust of Oregon." Other municipal and co-op utilities manage their own rebate programs. Amounts for these programs are listed in the table below.
Since we began tracking rebates here in 2009, we've noted some fluctuation, and as of early 2020, here is what we've found for Oregon incentives:
|Ashland Electric Utility||$500/kW, up to $7,500||Subject to additional terms|
|Central Lincoln PUD||$500/kW, up to $2,000||Subject to additional terms|
|Eugene Water & Electric Board||$400/kW, up to $2,500||Subject to additional terms|
|Lane Electric Coop||$500/kW, up to $1,000||Available beginning 1/1/2016|
|PGE||$300/kw, up to $2,400||Energy Trust keeps a portion of the Renewable Energy Certificates produced by projects that receive an incentive.|
|Pacific Power||$350/kw, up to $2,800||Energy Trust keeps a portion of the Renewable Energy Certificates produced by projects that receive an incentive.|
|Salem Electric||$500 for first 3 kW, $300/kW thereafter, up to $8,400||Rebates cannot exceed 50% of the total project and depend on availability of funds.|
New Oregon Solar Rebates for 2020
Starting in January, 2020, a new solar rebate program is avialable in Oregon, which provides rebates that can be claimed in conjunction with the amounts listed below. The incentive for residential customers is $.20 per watt DC, up to 40% of the total costs or $5,000, whichever is less.
The rebates include an increased incentive amount for low- and moderate- income residential homeowners of $1.80 per watt DC, up to 60% of cost or $5,000, whichever is less. This amount definitely has the potential to change some lives.
Unfortunately, this rebate program has a tiny budget of just $2 million, 25% if which is earmarked for low- and moderate- income folks. According to our calculations, this program will likely benefit only 400 or so Oregon families. With a bigger budget it could be much, much more successful in helping people go solar.
Your best bet is to connect with Oregon solar installers we trust so they can get you the most up to date information.
Regardless, if you get your Energy Trust incentive, which you can and should, the only downside is your performance payment RECs will be owned by the utility. RECs are credits that can be sold to utilities so that they can meet their RPS standards. If you take the Oregon Energy Trust rebate, the utility will already own your RECs, so you can’t go selling them to someone else.
Oregon Solar Tax Credits
Oregon used to have a tremendous solar tax credit—the 3rd-best in the nation. You got $1,500 per kW of solar, up to $6,000 max. The bad news is the tax credits expired at the end of 2017. Oregon still has great solar rebates across much of the states, so if you're thinking about getting solar on your Oregon home, get solar quotes now.
Property Tax Exemption
Oregon solar panel systems are property tax exempt! You’ll be adding a hefty sum to your property value (roughly twenty times your annual utility savings). It’s heartening to know that by doing right by the environment, future generations, and your pocketbook, you won’t be penalized come tax time.
Sales Tax Exemption
No State Sales Tax
Since there's no sales tax to speak of in Oregon, there of course is no additional tax assessed when purchasing a home solar system!
Low-income Solar Programs
Oregon has a new rebate program with a focus to reward low and moderate income (LMI) residents more heavily. $2 million will be allocated to the program for 2020, and at least 25% of the projects awarded must go to LMI residents. There’s a cap of $5,000 in rebates for each solar project, with higher caps of $30,000 for projects installed on tribal buildings, non-profits, and low-income housing projects. While it’s laudable the program has been put into place, $2 million in funding is relatively miniscule to make much of an impact, and there will likely be fierce competition to get access to funds.
The consensus on Oregon solar power rebates and incentives
Oregon spent a decade building funding for its collective PV powered house. That is represented by the Energy Trust of Oregon, as supported by a fairly liberal legislature. The biggest trick is making sure we maintain funding for these excellent programs.
And it only makes sense for the utility that Oregon does that: the Northwest has a ton of wind and hydro, which works almost TOO well during the winter and spring. But come summer, Oregon must fire up a bunch of yucky thermal power plants to meet the electrical load during the day. Don’t forget: during the day, during the summer, it’s actually pretty darn sunny all across Oregon.
The list of improvements includes a solar carve out for RPS standards, performance payments across the state for smaller systems, and to keep funding for the good work. Oregon residents are either very liberal or very independent: two perfect dispositions to make us all residential PV owners. Just what the grid needs if we are to make our target of 100% renewable energy by 2100! Just the logical trend. Seriously though, keep up the good work, Oregon!