One million solar installations in the United States took about 40 years to install, and the next million took just three years to install. That''s an acceleration that hasn''t really slowed down. Whether or not, you''re looking to use the federal tax credit before it goes away or for another reason.
While the Midwest isnt California or Arizona, this doesn''t mean installing solar panels on a roof of the Midwestern is a foolish concept. In many situations, it may be a wise financial decision. Here are some key information on the Midwestern states from which you can get rid of. Look here if you live in New England or on the East Coast.
The cost of electricity
Were referring to the Midwest as the following states: Illinois, Indiana, Iowa, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio, South Dakota, and Wisconsin. This group of researchers has formed the United States Energy Information Agencys in the east and west north central regions.
Electricity prices in 2020 ranging from $10.22 per kilowatt in North Dakota to $14.32 per kilowatt in Wisconsin. Average monthly bills, which reflect the amount of electricity used as well as the price, landed fairly close to $100: Illinois ($93.98), Indiana ($120.34), Iowa ($107.78, Kansas ($113.11), Minnesota ($109.35, Nebraska ($109.30), North Dakota ($113.26), Ohio ($107.30), South Dakota ($121.77)
These bills are more common than other states in the United States, but they also increase by over $1,000 per year. Electricity rates and bills are expected to rise today. The average cost of electricity increased by 3.4 percent from 2020 to 2021, the highest increase since 2008.
The cost of solar panels
Solar panel installations vary in cost from state to state, from roof to roof, and contractor to contractor. In order to consider costs across projects, the solar industry is talking about the price of solar panels per dollar, divided by its costs. Hardware costs have decreased by about 40% per year, but sales, labor, and installation only decreased by 10-20 cents per year.
According to Wood Mackenzie, the average cost of solar panels in the United States is $3.28 per watt, according to research. EnergySage reported average prices for several Midwestern states: Illinois ($2.98), Indiana ($3.25), Iowa ($3.25), Michigan ($3.10, Minnesota ($3.04, Ohio ($2.68), and Wisconsin ($3.02). This list is incomplete because EnergySage does not operate in every state or have sufficient data to calculate averages. This scenario could be because the Midwest is behind much of the country
Sunrun, a solar company, told investors in a recent presentation that in Midwestern states, between 0 and 1% of the available market has adopted residential solar. While other areas of the country, like New England and the Southwest, are far ahead.
An investment tax credit for solar will reclaim 26% of the cost of a solar panel installation in time of tax time. The federal tax credit will drop to 22% in 2023 and is expected to expire in 2024, although it technically might be extended.
State and local incentives in the Midwest are broadly less attractive than those in New England, although they aren''t far off from those in the Southeast. There are variations throughout the Midwest, according to the Database of State Incentives for Renewables and Efficiency.
In Michigan, solar panels are generating renewable energy.
Nearly every Midwest has a net metering program to compensate solar panel owners for the excessive electricity they produce. South Dakota does not. Customers there are compensated at an avoided cost rate, which is usually up to the utilities to decide and typically a smaller amount than offered under the net metering. Kansas limits the property tax exemption to 10 years. Iowa and North Dakota set the limit at five.
While statewide incentives remain behind other areas, city- and utility-specific incentives exist. Indianapolis, Chicago, Cincinnati, and other cities include rebates or reduced permit fees. Utilities in Iowa offer solar rebates.
Several Midwest states offer opportunities for people to sell solar renewable energy certificates they generate. Illinois'' SREC market is only open at certain times, when SRECs can be sold on long-term agreements up to 15 years. Ohio has its own SREC market and permits nearby states (Indiana, Kentucky, Michigan, and West Virginia) to sell inside it. This increases supply and lowers the price at the time of this writing.
The solar potential of the Midwest
So far, the Midwest has reached the bottom of solar adoption. Missouri (187.7 solar installations for every 100,000 people) and Iowa (185.74 solar installations per 100,000 people). Both states are tied to the 28th and 29th in charge of this measure. The Midwest also has two of the lowest three states for solar adoption: North and South Dakota.
According to the National Renewable Energy Lab, solar potential isn''t a technical term and can be described in several ways. By one measure the amount of energy a standard solar panel would generate if mounted horizontally the Midwest rates around 4 kilowatt hours per day. However, in parts of Missouri and South Dakota that same square meter of solar panel would produce closer to 5 kilowatt hours per day, and in Kansas and Nebraska it''s closer to 6.
Solar panels provide some power for an unusual house near Chicago.
According to a NREL study, the average residential solar array in Iowa, Indiana, North Dakota, and Ohio would offset 60-70% of an average electricity bill, while in Illinois, Kansas, Michigan, Nebraska, and South Dakota its 80-90%. In Wisconsin, its 90-100%.
Despite the fact that other parts of the country have a lot of sun and more incentive, solar panels in the Midwest are still likely to benefit greatly.
This is a brief overview, and each individual who goes solar will have a different calculus to make given the impact of roof design and direction, energy usage, and the availability of solar installers. Solar in the Midwest might be worth a long run.