Press Release: October 12, 2020
Solar power has been growing exponentially since the last 2 decades in the US. In the year 2000, there were only around 100 MW of solar installations. However, the Solar Energy Industries Association (SEIA) has already reported over 85,000 MW by mid-2020, an is estimated to reach 100,000 MW mark by early 2021.
There have been several factors that contributed to the tremendous success of solar power in the US. One of the biggest success factors being the technology becoming more and more affordable each year coupled with the rising prices of electricity. In simple terms, the upfront cost per kW is reduced, while the total savings per solar panel increases. In addition to this, governments or utility companies are now offering incentives depending on the location of the project.
Speaking of incentives, the Investment Tax Credit (ITC) has greatly contributed to the solar growth in US. The incentives can be availed by businesses as well as homes. The federal tax credit for solar installations was 30% by the end of 2019. However, the federal tax credit was reduced to 26% in 2020 and will further drop to 22% in 2021. The ITC will likely be only 10% and available for businesses only from 2022.
In US, some states are much ahead in solar adoption as compared to others, while some are estimated to become leaders in the coming years. This article intends to breakdown the best states for solar power in US considering factors like incentive programs and electricity prices.
New York offers excellent incentives for solar installations even though it’s not a very sunlight rich state. Considering the Federal Tax Credit, the State Tax Credit and the NY-Sun Rebate, solar installations can be around 50% cheaper in New York.
Highlights for Solar Power in NY
For a given capacity, the number of kWh produces will be less compared to a sunny state like California or Colorado. However, since the electricity cost is much higher in NY state, the dollar value of solar generation is very high.
New Jersey offers a combination of incentives and favourable policies for solar power. Solar power system owners can make additional income by selling the excess SRECs (Solar Renewable Energy Certificate). As of 2020, each SREC sells around $230 which is equivalent to 23 cents/kWh. The electricity prices in NJ are currently 16 cents/kWh, which means the SREC sales will be higher than the power bill savings.
Highlights for Solar Power in NJ
As of 2020, Massachusetts is arguably the best state for solar power. Electricity costs are above 20 cents/kWh and you get a SMART incentive of around 10 cents/kWh. This means 1 kWh generated from solar panels has a value of over 30 cents.
Highlights for Solar Power in MA
The SMART program is available only for customers of 3 investor owned utilities, National Grid, Eversource and Unitil. Several municipal power entities have their own incentive programs which provide upfront rebated for solar power.
The Residential Program offers a rebate up to $7000/project and the Commercial Program offers up to $75,000/project. To avail the maximum benefits from the incentive programs, the solar capacity required in 8.235 kW for residential systems and 175 kW for commercial systems.
Highlights for Solar Power in RI
Maryland offers a combination of incentives for solar power for reducing the payback period while increasing the ROI. In Maryland, electricity generation with solar panels have 3 cash flows benefits which are electricity savings, SREC sales and production tax credit for large systems.
Highlights for Solar Power in MD
Electricity prices in Maryland in around 13 cents/kWh, while each SREC sells for around $80 (8 cents/kWh). This means, for every 1000 kWh produced, you get savings of around $210.