If you’re a homeowner considering a sustainable investment that benefits not only the planet but also your pocket too, solar panels might be just the solution you’re looking for. In recent years, solar panels have become increasingly popular as ways to generate renewable energy at home and reduce electricity bills. But because the initial cost of installing solar panels is quite high, considering the return on investment (ROI) before making a decision is important. Let’s take a look at the states with the highest solar panel ROIs.
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New Mexico
New Mexico is known for its clear skies and abundant sunlight, making it the perfect setting for solar energy. For homeowners there, the solar panel ROI is impressive, often showing payback periods of five to seven years. Through a mix of production incentives, property tax exemptions, and performance-based incentives, the state is helping residents tap into the desert’s natural power supply.
California
California is also among the states with the highest solar panel ROIs. With power purchase agreements and net metering, California homeowners can see their systems paid off within four to six years. The Golden State also offers a property tax exclusion for the added value of the solar panel system and exempts solar energy systems from state sales tax.
Perhaps most notably, California’s net metering program means homeowners can receive one-to-one bill crediting for each kilowatt-hour of excess electricity they feed back into the grid. This cuts down electricity bills and can also result in actual payments for surplus energy.
Hawaii
Hawaii is geographically isolated and heavily reliant on imported oil, which means electricity prices are high. For homeowners who transition to solar, the ROI accelerates, with payback periods often starting as low as three to five years.
Hawaii’s favorable policy environment includes a nonrefundable income tax credit of 35 percent of the actual cost of the system for use on a domestic or hot water system or wind energy. This goes up to 20 percent for other technologies, with a maximum credit of $5,000 per technology.
Rhode Island
Although it’s the smallest state in the US, Rhode Island is big on solar incentives. The Ocean State’s Residential Renewable Energy Tax Credit allows homeowners a credit of 25 percent of the system’s installed cost, up to $7,000. This, in conjunction with the Solar/Wind Energy Grant Program and net metering, makes investing in solar power financially prudent, with payback periods typically hovering around four to six years.
Beyond these initiatives, Rhode Island also offers many incentives for homeowners who use solar panels and batteries. The state’s Renewable Energy Fund offers a generous incentive for battery storage systems that enhance the reliability and security of a solar panel setup.
The decision to go solar can be among the smartest you make as a homeowner. Each of these states, through a combination of natural factors and public policy, is setting an example for how local economies can benefit from renewable energy. If you reside in or are considering a move to New Mexico, California, Hawaii, or Rhode Island, take the opportunity to build a sustainable home by harnessing renewable energy, and see the impressive returns for yourself.
