State Solar Incentives: DIY Solar Policies For All 50 States
When it comes to do-it-yourself projects, building a solar energy system is fun, challenging, and rewarding. DIY Solar can save customers a huge chunk of money on hiring an installer, and the DIY process can provide homeowners more freedom, flexibility, and ability to adapt to the design to specific needs of their project.
There are, however, a few things to be mindful of while you plan your project. Different states in the US have different attitudes toward DIY projects, and to solar in general, which are reflected in their policies. A DIY solar installation may or may not be possible depending on your location.
In addition, some locations are more solar-friendly, offering state and/or local government incentives to encourage the adoption of solar. These incentives often come in the form of a tax credit, like the federal solar tax credit available to all Americans. But they can also be offered as rebates, utility rate discounts, or other forms of financial relief.
There are hundreds of state, local, and utility company programs that will help you with the initial costs of installing your home solar panels.
DSIRE: Database of State Incentives for Renewables & Efficiency
The Database of State Incentives for Renewable Energy (DSIRE) is the site everyone uses to get an up-to-date list of incentives available for people who want to make their homes or businesses greener.
We can offer some general advice in this article, but we encourage people to look at DSIRE to get a full understanding of solar incentives available in their area.
While most solar incentive programs don't come with excessive red tape, several place limitations on the installation process. You may not qualify for incentives unless your solar energy system is inspected or installed by a state-approved contractor. Below, we'll review some of the best and worst states for DIY installers and what limitations may apply in specific states.
To this end, states have been divided into three categories:
- those that provide rebates, grants, or tax credits to DIY-ers
- those that provide some or few benefits, and may have stipulations with regard to installation
- those that do not offer substantial incentives, or actively discourage DIY solar
DIY Solar Friendly States
These states generally offer strong financial incentives for system ownership, favorable net metering, tax exemptions, and accessible permitting:
- Arizona
- California
- Colorado
- Connecticut
- Delaware
- Florida
- Hawaii
- Illinois
- Iowa
- Maine
- Maryland
- Massachusetts
- Minnesota
- Nevada
- New Hampshire
- New Jersey
- New Mexico
- New York
- North Carolina
- Oregon
- Rhode Island
- South Carolina
- Texas
- Vermont
- Virginia
- Washington
States in this category offer financial aid for people who wish to install a solar energy system themselves. They offer some form of state rebate program which allows self-installation of your residential solar system. Oftentimes, there are local incentives that include waivers for building permit fees and expedited licensing that can reduce the project timeline.
Many utilities within these states also offer direct incentives for going solar, which may include:
- Buyback programs: resale of excess solar power production to the utility for profit
- Favorable net metering: some utilities bill solar customers at a reduced rate, meaning electricity created from solar is more valuable than electricity purchased from the utility
- Community solar: regulations for the sharing of a central solar system amongst a group of local home or business owners, generating energy savings for everyone involved
While not every incentive is available in every state, these states generally lean toward providing programs which are favorable to DIY solar installations.
DIY Solar Neutral States
These states have some incentives, but lack comprehensive support. They may have limited state tax credits/rebates and standard (non-expedited) permitting processes:
- Arkansas
- Georgia
- Idaho
- Louisiana
- Michigan
- Missouri
- Montana
- Ohio
- Pennsylvania
- Utah
- Wisconsin
Solar is completely viable in these states, but they offer no special advantages beyond what is typical around the country. Net metering policies are likely neutral, with the utility buying and selling electricity at the same rate, without any advantageous terms for solar homeowners. Rebates, tax breaks, and other incentives that reduce overall system cost may be modest, or non-existent.
However, this doesn't change the fact that solar is more cost-effective than utility power in the long run, even if you pay full price for your system. These states generally have few restrictions on DIY projects, allowing homeowners the opportunity to save thousands on their project with a self-directed install. The absence of truly favorable solar policies does not stop us from wholeheartedly recommending solar in these states.
DIY Solar Unfriendly States
These states have minimal or no state-level incentives for system ownership, poor net metering policies, and lack supportive infrastructure for DIY solar:
- Alabama
- Alaska
- Indiana
- Kansas
- Kentucky
- Mississippi
- Nebraska
- North Dakota
- Oklahoma
- South Dakota
- Tennessee
- West Virginia
- Wyoming
The vast majority of these states have net metering policies which are unfavorable to solar homeowners. Many utilities bill a higher rate for electricity pulled from the grid, and pay a lower rate for solar electricity fed into the grid. In short: you get "partial credit" for solar and end up paying the difference.
Other themes include:
- Slower permit processing, dragging out project timelines
- Utilities charging homeowners for the right to connect to the grid
- Specific restrictions on DIY construction projects
- Lack of SRECs (Solar Renewable Energy Credits), a program which allows solar homeowners in friendlier states to sell excess energy to third parties, allowing them to meet renewable energy standards
In these states, most or all of these limitations give us some pause in recommending DIY solar specifically. While solar may still be viable through a full-service installer, that costs about twice as much money on average, dramatically changing the ROI and payback period calculations.
Conclusion
This article may help you be more prepared for your big DIY solar energy project. Knowledge of incentive programs and how they work is a crucial tool in helping you reach your goal of solar power, as cost-effectiveness is definitely the deciding factor when debating a solar installation.
Some states have excellent programs to help pay for your system. Some states require installation (or, at least, inspection) by a certified contractor. And some states hardly offer help at all.
For more information on your local policies, check the DSIRE website. If you'd like guidance putting together a custom solar kit for your DIY project, please fill out this form to reach out to us.