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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

6 thoughts on “SPR Report Card 2010 – Part 4 – Solar Incentive Summary Grades

  1. Avatar for Dan Hahn Dan Hahn says:

    Hi Chuck? Chck? Chick?,

    The amount of incentives you receive under a leasing arrangement completely depends on the specifics of the lease arrangement you would have with your PPA (Power Purchase Agreement) provider.

    Most times, you would not be able to take tax credits, as you are not the party installing and owning the panels, the PPA provider is. You do of course get all the green benefits of solar, and lock in your electric rate.

  2. Avatar for chck twombly chck twombly says:

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

  3. Avatar for Alexandra Alexandra says:

    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?


    1. Avatar for Dan Hahn Dan Hahn says:

      Hi Alexandra,

      Great question! New York does have a solar specific carve out in its renewable portfolio standard (.5% by 2015), and residents may sell their SRECs into the DC market. However, the standards for doing so are quite complex, and homeowners would have to be able to prove they are providing energy to a special electric region called the PJM (See a map in the performance payments section of our report). Eligibility is not state wide, and it’s worth mention to clarify the difficulty you may have in selling your SRECs into DC.

      However, NY will most probably create an even more aggressive solar set-aside and establish their own SREC trading platform in the near future.

      All these complexities do indeed call into question the “A” grade in this category, thank you for pointing this out and we may alter the grade on next year’s report if nothing changes by next August.

      Here’s some further information from SRECtrade:

      New York is defined as an “Adjacent PJM State” and the New York Independent System Operator (NYISO) as an “Adjacent Control Area”. The crux of the issue seems to be the wording “consumed within the PJM interconnection region”. Electricity flows bidirectionally between PJM and NYISO every day, the amount varying based on supply and demand in the two ISOs. An electron generated in NYISO clearly can’t be tracked (Heisenberg and all), so there is no way to know if a given electron generated by the grid-tied solar installation makes its way into PJM and is consumed. In fact there is no way to know if a given electron generated by any installation in any “Adjacent PJM State” makes its way to PJM and is consumed there, although it is possible that any electron generated in an adjacent PJM state will. Going even further, an electron generated by a system located in DC might actually be consumed outside PJM! As we see it, this leaves two choices on how to interpret the DC RPS rules. Either every grid tied generator in an “Adjacent PJM State” could be delivering their electrons to be consumed in PJM and therefore all are eligible to create DC renewable energy credits, or none can prove that their specific electrons where consumed in PJM and so none are eligible.

  4. Avatar for Dan Hahn Dan Hahn says:


    Thank you for your thoughts and spot on about California. We were honestly ambivalent about the “F” grade, since it was California after all who got the ball rolling to catalyze the whole solar industry in this country.

    This is a very present value of a solar investment type of report, and since the California electricity market is so segmented, it becomes difficult to capture the nuances of how the incentives work in the different markets.

    We sought to standardize the report as much as possible, and while there is no “solar history” section of the report, California clearly would get an “A”. The report is weighed much more in terms of where we are now, not where we’ve been or where things might go!

    Thanks again for your thoughts,

    – Dan

  5. Avatar for Jim Jenal Jim Jenal says:

    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 grade, California getting an ‘F’ seems a bit unfair. While I understand that you are looking at the present value of these factors, that ignores what California has done over the past few years (and well before that). The ‘F’ grade makes is sound as if CA is hostile to solar – but remember that the CSI rebates were at $2.50/Watt in 2008 and we have installed more than 800 MW of solar since then! None of the states with a grade of ‘A’ is even close to that accomplishment.

    Still, this is a stark reminder that we need to refresh our thinking on solar policy and push Sacramento to put more money into these programs in the form of FITs or other sources.

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