Cost of Solar: Kansas

Why Kansas is Ideal for Solar

Kansas is a state with so much solar energy! With more than 225 sunny days a year, the state ranks 5th in the nation for solar generation potential. The western regions of the state can receive up to 6 peak sun hours per day on average, which is comparable to California’s abundant sunshine.

When a home is bathed in lots of sunlight, that means there are substantial opportunities for generating electricity from a rooftop solar system. Renewable energy generation through solar saves money and contributes to a healthy environment. Kansans who add solar onto their homes protect the state’s natural resources like open spaces and farmland, too. Kansas is the ideal place to take advantage of clean solar power.

Residential homeowners in Kansas have three very compelling reasons to add rooftop solar panels to their properties. First, the cost of solar equipment and installation has never been lower. And the property tax exemptions that Kansans can tap into definitely are incentives, as homeowners can increase the overall value of their homes with solar systems without having to pay property taxes on that increase valuation. Finally, the 30% Federal tax rebate on solar systems reduces the overall cost of the solar equipment purchase, making solar in Kansas very appealing.

Cost of Solar Equipment is at an All-Time Low

According to the Solar Energy Industries Association, the cost to install solar has dropped by more than 70% since 2010, leading the industry to expand into new markets and deploy thousands of systems nationwide. With improvements to solar cell and solar panel technology as well as how solar cells and solar panels are produced, costs have been coming down at an impressive rate. As a result, no longer is there a pressing need for shattering breakthroughs in solar technology, since solar is already getting to the point where it will beat already built and operating coal, nuclear, and natural gas power.

In 2018, US average solar costs range from $11,380 to $14,990 (after tax credits). Because price paid per watt ranges from $2.71 to $3.57 and the average U.S household system size is 6 kW (6,000 watts), the average gross solar panel cost is $18,840. That’s 6.5% lower than it was a year ago, and solar panel system costs are continuing to fall.

If a Kansas homeowner applies $21,250 toward solar system installation, by the end of year one, incentives and energy savings will continue to erase initial costs. Over 25 years, this system will have produced about $14,000 in income.

Property Tax Exemptions for Energy

Kansas offers property tax exemptions for installed solar systems. What is a property tax exemption? It is a reduction on the valuation of certain parts of a property. In the case of solar systems, homeowners can exclude the added value of a system from the valuation of their property for taxation purposes.

A solar system can increase the value of a residence in Kansas considerably based on the home’s annual electricity savings alone. For example, a 5kW system increases the value of a Kansas home close to $17,000. The property tax exemption for Kansas homeowners who install solar systems makes good, solid sense. Who wouldn’t want to increase the valuation of a property without having to pay the associated taxes on that enhanced valuation?

Solar Federal Investment Tax Credit

In late 2015, Congress renewed the popular solar tax credit, which incentified thousands of homeowners to go solar, save on their power bills, and become more energy independent. The solar tax credit also had the effect of awakening and invigorating the solar industry.

In 2018, however, the future of the solar tax credit for Kansas citizens and elsewhere in the US is much more uncertain. Scott Pruitt heads the Environmental Protection Agency within the Trump administration, and he is pushing to eliminate the solar tax credits. “I would do away with these incentives that we give to wind and solar,” he said in 2017 to the Kentucky Farm Bureau. “I’d let them stand on their own and compete against coal and natural gas.”

For 2018 and 2019, the tax credit is still in place, and it can reduce a Kansas homeowner’s tax bill by 30% of the amount it costs to install solar on a home.
For example, if an individual spends $20,000 on a solar system, the 30% tax credit would be $6,000. Additionally, if that person only owes $4,600 in taxes for 2018, that tax bill will be reduced to zero, with an additional $1,400 tax credit on the 2019 return. The residential solar tax credit will continue at 30% through the end of 2019 then “step down” to zero after 2022.

Look Beyond Energy Costs Today to Fossil-Free Energy Tomorrow

Kansas ranks 18th out of the 50 states in the amount it costs to purchase residential electricity. We’ve got to say it: that’s pretty appealing. Kansas pays an average of 13 cents per kilowatt-hour of electricity, about the national average. Because a state’s electric rates is a key factor in predicting whether an investment in solar panels makes sense, a Kansas homeowner may hesitate to make the move into the a solar system purchase. But think again.

There are many hidden costs to inexpensive electricity, and Kansas homeowners should be informed of the whole inexpensive electricity picture prior to eliminating residential solar systems as a viable energy-producing option. Cheap electricity is produced by burning fossil fuels, which produce greenhouse gases. Those greenhouse gases are destroying the atmosphere, altering local weather so that devastating storms result, threatening species… The list is quite long.

Moreover, many investment firms are advising their clients to divest from fossil fuels holdings in what is known as a “stranded assets.” New regulations on carbon emissions and shifting energy supplies will spike the cost of fossil fuels as the years go on. Indeed, recent findings published in the journal Nature Climate Change point to the transition from fossil fuels to renewables as unstoppable. In the wake of such change, assets valued at trillions of dollars will become stranded as what the researchers call the “carbon bubble” collapses.

The Natural Resources Defense Council has launched a new tool to track the historic development and cost reductions of clean energy technologies, including solar. Homeowners in Kansas can log in and see for themselves the progress and trajectory of solar systems. Investing in a solar system now means that Kansas homeowners will have a stable, efficient, independent, and cost-effective energy source for decades to come.

Net Metering

Kansans who generate electricity from their solar array reduce the amount of energy they purchase from their electric utility and lower their monthly electricity bills. But there is another economic benefit to be obtained from a solar system — net metering. Net metering is a system in which a homeowner’s solar panels are connected to a public-utility power grid.

Kansas offers strong net metering laws. Kansas residential solar systems that produce more energy than is needed sell that excess power back to the grid, and the amount of energy returned is deducted from the homeowner’s monthly bill or credited toward a future bill. That means the homeowner is able to offset the cost of power drawn from the utility during times when it’s not sunny.

The one small negative aspect to net metering in Kansas is that Kansas utilities are not required to carry over these credits indefinitely. The credits expire after a 12 month period.

Renewable Portfolio Standards

Kansas has voluntary Renewable Portfolio Standards (RPS). RPS regulations in many states require utilities to increase their production of energy from renewable energy sources, such as solar, generally be a predetermined date. Utilities must meet the standards by either producing their own renewable energy or by purchasing it from customers. Penalties in these states for failure to comply include high fees. Instead, RPS ards are not met. Rather than paying high fees, utilities in strong RPS states offer solar incentives to homeowners.

Kansas’s voluntary RPS mandates 20% of all energy come from renewable sources by 2020. It’s hard to envision how voluntary RPS will reach these mandated renewable energy goals. With so many other positive reasons to install a residential solar system, perhaps the voluntary Kansas RPS won’t be too much of a deterrent.

Final Thoughts

Solar power in Kansas has been growing in recent years due to new technological improvements and a variety of regulatory actions and financial incentives. Several large retailers in Kansas have gone solar, including IKEA, which has installed one of the largest corporate photovoltaic systems in the state with 730 kW of solar capacity at their location in Merriam. A significant portion of electricity in Kansas could be provided by rooftop solar panels. Kansas homeowners who decide to invest in a rooftop solar system will lead the way toward a cleaner, healthier tomorrow for their families and local communities.

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June 22, 2018

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