Written by Sarah Hancock | Last Updated September 19th, 2019Sarah Hancock is passionate about green living and sustainability. She frequently writes about renewable energy and manages the Solar blog at BestCompany.com.
Nevada Solar Overview
Nevada hasn’t always been most solar-friendly state in the nation; back in 2015, the Public Utilities Commission of Nevada ended net metering for rooftop solar, which meant solar owners did not receive credit for the energy their panels sent to the grid (we’ll cover net metering more in-depth below). On top of that, solar owners had extra fees added to their electric bills. While it was in effect, PUCN’s 2015 ruling essentially destroyed the economic benefits of owning a rooftop solar system in Nevada, and several solar companies moved out of the state entirely.
However, Nevada residents and industry associations banded together to fight back, and the Silver State’s legislators have since passed a bill that reinstated net metering for solar owners and guaranteed rates for the next 20 years. Many solar companies have reopened operations and brought thousands of jobs back to the state, resulting in a booming solar marketplace. In fact, Nevada is now one of the best places in the country to go solar!
Here’s an at-a-glance description of the current benefits and drawbacks of switching to solar in Nevada:
Benefits of going solar in Nevada:
- Lots of sunshine to take advantage of
- 30% federal tax credit
- Solar rebate of $200 per kW
- Performance payments of approximately $0.03 per kWh
- Statewide net metering program
- RPS of 25% by 2025 with 6% solar carve out
- Multiple financing options available
- Easy to connect to the grid
- Good for the environment
Drawbacks of going solar in Nevada:
- No property tax exemption
- No sales tax exemption
- Must choose between solar rebate and performance payments
- Lower-than-average electricity prices
We break down and explain each of these items in the article below.
Cost of Solar in Nevada
Prices of solar in Nevada have fallen 47 percent over the last 5 years, and as of 2019, the average price per watt for a solar energy system purchased outright in the Silver State is approximately $2.93. For an average-sized 10 kilowatt system, this comes out to be $29,300 before tax credits and other local incentives are applied. After incentives are applied, the cost drops to about $19,500.
In terms of price per kilowatt-hour of energy used, those with solar panels in Nevada will pay only about $0.06 per kilowatt-hour. This is low compared to the average price of electricity from the utility, which is currently about $0.12 per kilowatt-hour. Utility prices are expected to go up over the next several years, which means that Nevadans who switch to solar now will see their savings increase over time.
Considering this, as well as inflation and financial benefits from available incentives, the average home or business owner in Nevada who purchases a solar energy system could expect to recoup their solar investment in about 10 years. After that, they will essentially be able to use the energy production from their solar panels to power their house or office building for free or for a very low rate.
In fact, over the life of the solar energy system, the average Nevada resident could reasonably expect to save upwards of $20,000.
Nevada Solar Financing Options
Home and business owners in Nevada have multiple solar financing options available to them, including outright purchases, loans, leases, and power purchase agreements.
In Nevada, purchasing a solar panel system outright will provide you with the biggest savings in the long run, but it does require that you to pay for your system in full upfront. However, since you’ll be the owner of the system, you’ll get to take advantage of the 30 percent federal tax credit and any local incentives that are available, which will help you to recoup a good portion of those costs in the first year. In addition, you’ll own the solar equipment and the energy it produces. In about 10 years after it pays itself off, all the electricity produced by the system will be pure profit.
Although this option is not feasible for everyone, you may want to consider it if you can swing it. Some solar companies will even offer a discount if the system is paid for in full upfront.
Getting a loan to finance your solar system in Nevada is a great way for you to get started with solar if you are interested in solar ownership but don’t have the cash to pay for the system upfront. Many solar companies partner with banks or companies that specialize in providing loans for solar projects. These loan companies typically offer contracts ranging from 5 to 20 years and interest rates between 1.99 and 4.99 percent, depending on your credit score and the length of the loan. Common benefits that come along with getting a solar loan include the ability to take advantage of federal tax credits and available local incentives, as well as the option to pay off the loan early with no prepayment penalties.
With a loan, it will take about 5 years longer for the system to pay itself off than it would with an outright purchase. However, after about 15 years, you’ll be the exclusive owner of the solar energy system and the energy it produces, essentially allowing you to power your home or business for free for the remainder of the system’s life.
Leasing a solar panel system for your home essentially means that you will be renting the system from a solar company or a third-party financier for the duration of a contract, which is generally 20 years, at a locked-in monthly rate. Leases typically do not require the homeowner to put any money down upfront, but because the solar company owns the system, the customer does not get to take advantage of tax credits, net metering, or long-term financial benefits.
Since electricity prices in Nevada are slightly lower than the national average, your solar lease payment will likely be about the same as your current electricity bill without solar at the beginning. However, electricity prices are expected to increase over time, which means you should still end up saving a few thousand dollars over the life of the contract, and let’s not forget the positive impact you’ll be making on the environment.
Power Purchase Agreements
PPAs are similar to leases in that the homeowner typically does not have to put any money down and a third party owns the system. However, instead of renting the system at a locked-in rate, the homeowner buys the electricity produced by the system at a set rate.
The solar savings a PPA customer in the Silver State will receive won’t be as hefty as they would for someone in place with higher electricity prices. However, because Nevada receives so much sunshine, it is still possible to save money with a PPA. Although savings will be slim in the first few years, as electricity rates rise over time, so will solar PPA savings.
Nevada Solar Incentives
While Nevada is lacking when it comes to state solar tax incentives, the state currently offers a solid solar rebate and decent performance payments.
There are two tax credits you need to be aware of when getting solar. The first is the 30 percent federal tax credit that anyone in the United States who owns their solar panel system can qualify for. Because these credits are given on a 1-to-1 basis according to your tax liability, you will want to have an idea about what your federal tax liability is to know how many years it will take for you to take full advantage of this tax credit.
The second is the state tax credit. This will differ depending on which state you live in. Because Nevada doesn’t have any state income tax, there’s no state solar tax credit to redeem in the Silver State. However, Nevadans who purchase a solar energy system outright or with a loan are still eligible for the 30 percent federal tax credit.
Some states offer tax exemptions on the sales and property tax of the solar panel system, while other states don’t offer tax exemptions of any kind.
Unfortunately, there are no tax exemptions available to residential solar customers in Nevada at this time.
Many utility companies offer rebates to homeowners that own a solar panel system. These rebates are similar to those that you’d receive on an electronic or appliance purchase and result in money back in your pocket after the solar installation.
One of the biggest perks of going solar in Nevada is the state’s solar rebate offered through its RenewableGenerations program. Nevada homeowners who install a solar system are rewarded with a rebate of $200 per kW. That means if you install a 10 kW system on your home, you’ll get $2,000 back. Nice!
While these are some of the best solar rebates in the nation, there is a downside. When you accept a solar rebate in Nevada, you forfeit your performance payments to the utility company. More on this below.
Performance payments reward solar owners for the electricity their panels produce on an ongoing basis. Utility companies will typically either offer a per-kWh bonus or pay you a fixed amount for credits earned.
Through Nevada’s performance payment program, solar homeowners are rewarded for the energy their panels produce with Portfolio Energy Credits, or PECs. For systems installed after December 21, 2015, 1 kWh of electricity equates to 1 PEC.
Because utility companies are looking to meet their Renewable Portfolio Standard goals (see below), they are willing to purchase these PECs for cash. While each PEC is only worth a few pennies, a 10 kW solar system should generate about 12,000 PECs each year. That means when you sell your PECs, you should earn about $360 per year for as long as the utility company needs to purchase them to meet it’s RPS (current goals are in place until 2025).
If you choose to accept performance payments in Nevada, you won’t be able to receive the RenewableGenerations rebate. Out of the rebate and the performance payments, the most beneficial option for you will depend on your location and the size of your system. Your utility or preferred solar company should be able to provide estimates.
Nevada Solar Policy Information
For the most part, Nevada has quite favorable solar policies; the Silver State has an aggressive Renewable Portfolio Standard with a solar carve out, a statewide net metering program, and straightforward interconnection rules. These policies make going solar attractive and affordable in Nevada.
Net metering refers to utility companies crediting solar owners for the excess power that they feed back into the grid from their solar energy system. During the day while solar panels are generating power, the meter typically runs backwards and sends surplus energy to the grid, as many homes aren’t consuming as much energy as their system is producing. At night, when the system is no longer producing energy, most homes pull energy back from the grid to cover their electricity needs. Through net metering, solar owners are able to generate credits to help offset any bills they receive from their utility company for tapping into the grid.
Nevada has a statewide net metering program in place that requires utilities to credit solar owners 95 percent of the retail cost of electricity for the power they send to the grid. If a solar owner has additional credits at the end of the month, those credits may be rolled over and applied to future billing periods where the solar owner may consume more energy than their panels produce. As more solar is installed in Nevada, the net metering rate will drop by 7 percent for every 80 megawatts of new solar until it reaches a floor of 75 percent of the retail cost of electricity.
Renewable Portfolio Standard
Utility companies are required by their state legislature to make sure that a certain percentage of their energy production comes from renewable energy sources, such as solar, by a specific date. If the utility companies in the state do not comply with RPS law, they will be heavily fined. Therefore, states that have a large RPS requirement usually have great incentives up for grabs from the utility companies in that state.
Nevada has an RPS of 25 percent by 2025, which is one of the most aggressive goals in the country. This means that by the year 2025, one-fourth of the state’s energy must come from renewable sources. Additionally, 6 percent of that energy must come from solar, which probably explains the awesome rebates and performance payments available in Nevada.
Interconnection standards have to do with the requirements involved when it comes to connecting a solar system to the grid. It’s important to know if your state has any additional requirements that must be met in order to get your home solar system plugged into the grid.
Nevada has a relatively streamlined interconnection process and does not require solar owners to pay a large fee or wait for an extended period of time in order to connect to the grid.
Nevada Solar Statistics
To date, Nevada has installed more than 3,100 megawatts of solar, enough to power over 555,000 homes in the state with solar energy. As of 2019, upwards of 12 percent of the Silver State’s electricity comes from solar. Nevada ranks fifth in the nation for projected solar growth, and over the next five years, more than 3,100 additional megawatts of solar are expected to be installed in the state. Currently, there are over 130 solar companies and nearly 6,700 solar jobs in Nevada.
Interested in a solar quote? Check out the top-rated solar companies in Nevada and read reviews from verified solar customers.