Your 2019 guide to getting solar panels for your home in West Virginia
This page is a complete guide to the complicated and sometimes confusing process of installing solar panels on your West Virginia 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 **
West Virginia is home to the Appalachian Mountains, and some of the most beautiful hills in the country. Tourists here enjoy cultural activities like traditional music and crafts. People who live here enjoy the state's natural beauty, and maybe a pepperoni roll once in a while. But none of those activities have much future unless West Virginia can kick some of the coal habit and switch to cleaner power sources. Hey, how about that solar energy?
Unfortunately, the past year has been a tale of woe for solar in the Mountain State. While the state was saved from the bottom of our rankings for 2015, the governor and Legislature have destroyed the few bright spots here. They repealed the state's barely-adequate RPS, and re-wrote the laws that provide for net metering and interconnection. All that adds up to a sad state of affairs for solar in WV.
But! prices for solar equipment and installation are still falling all over the world, and nothing the West Virginia government can do will stop that. With falling costs and increased electric rates, solar here pays itself back 6 years faster than it did this time last year. That's something to celebrate, so if you're still thinking about solar in the Mountain State, read on to find out all about the financial ins and outs!
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 West Virginia solar incentives you see below.
The Solar Strategy section is focused on the 3 ways of paying for solar in West Virginia, 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 West Virginia. 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 West Virginia.
Click any of the boxes below to go to that section of the page, or scroll down to read the page in order.
|Your West Virginia Solar Strategy|
|West Virginia Solar Policy Information|
|West Virginia Solar Incentives|
|Your West Virginia Solar Strategy|
|Comparing Solar Investment Options|
|Paying Cash for Solar in West Virginia|
|Solar Loans in West Virginia|
|Solar PPAs in West Virginia|
|Solar Purchase Payback Time in West Virginia|
|West Virginia Solar Policy Information|
|Renewable Portfolio Standard (RPS)|
|RPS Solar Carve-Out|
Your Solar Strategy in West Virginia
Figuring out the best way to go solar in West Virginia 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 West Virginia
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. Here's the thing about West Virginia: the state has next to zero incentives or policy that make solar a good idea, but it's actually still not that bad of an investment here. That's because prices for solar have fallen dramatically over the past decade or so, and even West Virginia's famously bad policy and low electricity prices can't keep it down.
Now as for that complicated chart above... let's break it down a little:
The green bars show solar's financial return over 25 years if you pay up front. As you can see, there's a big payment (negative) 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. Our example goes to year 25, which is when most solar panel warranties end, and in West Virginia, you'll end up with just over $10,000 in total profits by that date. That's pretty good!
The orange bars, on the other hand, show what happens if you take a 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 solar tax credit, meaning you actually come out ahead in year 1. The bars dip below the $0 line after 4 years, because your loan payments (over a 15-year term) will exceed your energy savings each year. By kind of a lot. Once you pay off the loan in 2030, the savings start stacking up. In the end, you'll come out just $1,425 ahead at the end of our 25-year estimate. You're basically breaking even on solar here, unless West Virginia electricity prices go up by a lot more than we estimate (3.5% annually).
Finally, the blue bars represent a similar HELOC option, but for a smaller, 2-kW solar system. This size system is great if you only have a little equity, and it still lets you break even over 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, and it's the surest bet in West Virginia. 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 over $10,000 in income.
Here’s an example of how the numbers work for a purchase of a 5-kW rooftop solar system in West Virginia:
- Installing a typical 5-kW solar system should start at about $20,000.
- The Feds offer a tax credit of 30% of out-of-pocket costs, so you'll get $6,000 back next April. Note: you can take the credit over two years if you don't owe $6,000 in Federal taxes this year.
- Then there's your first-year energy savings. That's another $624, and it brings the cost after 1 year to just $13,376.
- 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 $1,100 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 $10,305 with an internal rate of return of 4.5%. That's not quite the return of a stock market index fund over 25 years, but it's a solid investment if you're looking to save money and the planet at the same time.
- On top of those returns, your home's value just increased by $12,480, 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 113 trees a year, every year your solar power system is humming.
Keep in mind, the numbers above are based on an average home in West Virginia. 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 usually where we tell you that taking a loan for solar panels is a no-brainer, because it means investing in an income-generating asset. But in West Virginia, with solar policy so lacking in basic protections for homeowners, it's not necessarily true. The state gets a nice amount of sunshine, so if lawmakers here would get their heads out of their behinds, we could see some really nice returns. In most states, just the electricity savings are enough to make solar worthwhile, generating a good deal of income for you after you pay your loan off.
Here's how a solar loan works in West Virginia:
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 the 30% federal solar tax credit just like if you paid $20,000 up front for your system. You'll come out ahead over $4,700 after the first year! In the 14 years that follow, your loan payments will cost quite a bit 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 "sizeable investment" territory, and then slowly gain after the loan is paid off. That's when the solar "savings account" will pay dividends. You'll be saving money every year because you'll own the system outright. If our prediction of 3.5% annual increases in energy costs hold, you'll be $1,836 to the good at the end of 25 years, which is not too bad 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 get a home-equity line of credit (HELOC) for $20,000 with a fixed rate of 5% or lower and a 15-year repayment period (lower rates and shorter repayment increases your profit).
- You have an appetite for more-or-less breaking even on a long-term investment, while also producing a ton of benefits for the environment.
Here’s how the numbers pencil out for a West Virginia solar purchase with a HELOC:
- 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 $624, but your loan payments will be $1,898, for a difference of $1,274, or about $106 per month.
- But here comes the tax credit! 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 $4,726 at the end of the first year.
- When your loan’s paid off in 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 minor returns, to the tune of $1,836 after all the payments. If you took a 10-year 5% loan for $20,000, your payments would increase, but so would your final profits, to $4,849 after 25 years.
- Finally, the environmental benefits cannot be overstated. Operating your system will take as much carbon out of the air as planting 113 trees every year!
Keep in mind, the numbers above are based on an average home in West Virginia. 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)
West Virginia 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!
West Virginia 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 West Virginia:
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.
West Virginia used to have a solid goal of having 25% of its energy needs met by renewable energy sources by 2025. While it was by no means the most aggressive RPS in the country, it was a step toward getting electric utility companies to help the little guy (that means you!) get into the solar game. Sadly, in early 2015, the West Virginia government repealed the RPS.
West Virginia’s RPS was critical to strong renewable energy policy. 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. Without an RPS law in West Virginia, there is little chance the electric companies will help anyone 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
As mentioned above, West Virginia no longer has an RPS, so there's no chance it has special requirements for certain amounts of electricity from solar. It's a sad state of affairs, considering nearby states like Ohio and Maryland do have solar carve-outs, which have been quite successful.
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!
West Virginia Electricity Prices
West Virginia homeowners pay an average of 12 cents per kilowatt-hour (kWh) of electricity. That’s quite a bit less than the national average of 13.6 cents/kWh. We know you like paying less now, but the long term costs of cheap electricity are through the roof. All that cheap electricity is produced by burning fossil fuels. Tons and tons of earth-killing fossil fuels. When the astronomical environmental costs start to mount, monthly electricity bills are inevitably going to rise as well. When that happens you’re going to feel pretty darn smart for making the early switch to producing your own clean, efficient solar power.
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.
West Virginia 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.
Currently, West Virginia requires all utilities to offer net metering. All monthly surplus energy production is applied to your next bill. Unused credits can be rolled ever perpetually, and unlike many other states, they do not ever have to be surrendered back to the utility. That’s a really solid net metering program. The only thing we want to see changed is the elimination of liability insurance requirements for small residential systems.
Sadly, like the RPS, West Virginia has decided to change its successful net metering rules. We're still waiting to see what changes the Public Utility Commission makes, so stay tuned; we'll update this page when we learn more. Fingers crossed it isn't a debacle.
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.
West Virginia Interconnection Rules
Statewide with caveats
Interconnection is solid here as well. All systems up to 2 MW are eligible to hook up to the grid. The connection process is split into two tiers depending on system size. Your residential system of less than 25 kW qualifies for a reduced application fee of only $30 (maximum) and is exempt from requirements for a redundant external disconnect switch.
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 West Virginia
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 West Virginia measures up:
West Virginia Solar Power Rebates
That’s right, West Virginia got left in the Stone Age. Ahem, I mean the Coal Age. There aren’t any utility rebates for solar power here. It’s time to start calling your legislators to tell them to get on the ball when it comes to promoting clean energy. West Virginia is still in the early stages of reaching for their RPS targets, but once those compliance deadlines start rolling around, expect to see greater rebates and incentives offered. The established benchmark mandates that 10% of electricity sales between 2015 and 2019 must come from alternative and renewable energy resources. Let’s see some hustle, West Virginia!
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.
West Virginia Solar Power Tax Credits
While West Virginia used to offer a personal tax credit to help bring down the costs of switching to clean power, that incentive is no longer being offered. Hopefully legislators have a replacement or renewal in the works. We hate to see good incentives left behind.
Luckily, all solar installations are eligible for a 30% tax credit from the Feds. There's no cap on the federal tax credit and fortunately for West Virginia, having no state rebate to deduct means a larger tax credit coming your way. 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
There aren’t any performance payments for solar power here. It’s time to start calling your legislators to tell them to get on the ball when it comes to promoting clean energy. As we mentioned earlier, West Virginia is still in the early stages of reaching for their RPS targets, but once those compliance deadlines start rolling around, let’s hope greater rebates and incentives (like performance payments) start popping up.
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
West Virginia continues to disappoint in the tax exemption department. Even without utility incentives, the legislature could do a great deal to incentivize solar power simply by adding these simple, straightforward laws. A property tax exemption would do a lot to help get solar rolling here. When you add a solar power system your home goes up in value by about twenty times your annual electricity savings. A property tax exemption would save you from paying taxes on that increase in value, earning you extra cash year, after year, after year.
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
As we said above, West Virginia continues its disappointment tour on the tax exemption front. Even without utility incentives, the legislature could do a great deal to incentivize solar power simply by adding these simple, straightforward laws. A sales tax exemption would save you 6-7% up front. In addition to helping you, sales tax exemptions also help the local solar industry, so they’re a double win.
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 West Virginia solar power rebates and incentives
Hey mountaineers! Your legislature has failed! We hear so much about coal mine safety every year. Here’s a thought: retrain those miners to work in a safer industry – the solar power industry. Seriously! Coal mining may be part of the heritage of the state, but clean energy is the future of the planet. If you want to keep the state “Wild and Wonderful,” it’s time to start renewing the West Virginia political scene: vote yes on solar!