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SPR Report Card 2010 – Part 4 – Solar Incentive Summary Grades

Avatar for Dave Llorens
Published on 08/19/2010 in
Updated 01/18/2019

About the chart above:

Here’s this year’s solar incentive summary breakdown by state. The incentives portion of the report is worth 50% of the total overall report card grade (See the green sections of the weighted pie chart).

The graded sections are described in detail here and the weights used for scoring are in parenthesis. Aside from the years to payback column which we covered in Part 1, each of the following will be covered in more detail later.

Years to Payback (25% of total summary grade)
The question so many homeowners ask themselves first when considering an investment in solar energy, “How long is it gonna be before I see a return on my investment?” That answer was calculated for each of the 50 states. The assumptions were a resident in each state installed a 5kW system at $7/watt (or $35,000 total) on a south facing roof with no trenching or extensive racking required.

We then calculated the amount of time it would take the homeowner to recoup 100% of the costs by using amount of electricity generated by the 5kW system, the average cost of electricity in the state, the 30% federal tax credit, SREC or feed-in tariff payments for the electricity generated, available state and utility rebates, and state tax credits. The calculations did not take into account immediate property value increases, which would have created immediate payback in many states.

Here’s a visual representation of the above payback periods by state.

SREC / FIT Payments (10% of total summary grade)
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.

If you don’t know what an SREC is, or how they work, check out this great SREC video.

Rebates (5% of total summary grade)
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.

For more information on how state rebates compare, check out Part 6.

Personal Tax Credits (4% of total summary grade)
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.

You can view our detailed grades and calculations and tax credits for a 5kW solar energy system by state below.

Property Tax Exemption (3% of total summary grade)
Property tax exemption status is a pretty big factor when putting together your investment considerations. Solar will add approximately twenty times your annual electricity bill savings immediately to the value of your home upon installation. for many 5kW systems, that amounts to about $20,000. 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. The stronger the tax exemption, the higher the grade.

For detailed descriptions of state property tax exemptions by state, use the report card navigation below.

Loans (2% of total summary grade)
State loan availability for solar energy differs wildly by state, but are an important component to consider, especially since many homeowners don’t have thousands of dollars lying around to put on their roofs. The availability of a state loan options for residential solar energy was sourced from the Database of State Incentives for Renewables and Energy Efficiency. The stronger the loan program, the higher the grade.

For the details behind the state loan programs, click here (published later).

Sales Tax Exemption (1% of total summary grade)
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).

2010 SPR Solar Report Card Navigation:

Part 1, Residential Solar Energy ROI by State
Part 2, Residential Solar Report Card Summary Grades
Part 3, Electric Utility Policies and Rates
Part 4, Solar Incentive Summary Grades (you are here)
Part 5, Solar Yearly Performance Payments by State
Part 6, State Rebate Details
Part 7, Tax Credit Overview by State
Part 8, Property Tax Exemptions
Part 9, State Loans for Solar
Part 10, Sales Tax Exemptions

Last modified: January 18, 2019

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chck twomblyAlexandraDan HahnJim Jenal Recent comment authors
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chck twombly
chck twombly

If my business leases $300,000 worth of solar equipment plus installation, will I get the same tax incentives as owning.


Hi Dan,

I couldn’t help feeling surprised to see New York in second place, and with an “A” for SREC/FIT payments. New York does not have a solar generation requirement, and therefore no SREC market, and it doesn’t have an FIT policy either. Can you explain how New York was still scored “A” in this area?


Jim Jenal
Jim Jenal

First of all, thanks for putting this together, very interesting. As an installer in Southern California I have a couple of thoughts regarding your methodology and conclusion. My biggest concern is looking at payback time based on statewide average energy cost. A very large percentage of our customers are also SCE customers which means that they have a steeply tiered rate structure. A properly sized solar system brings their usage out of the top tiers, but does not try to offset the lower tiers. When a system is sized in that manner, the payback is accelerated. As to your final… Read more »

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