Written by: Aaron Hall | Best Company Editorial Team
Last Updated: July 13th, 2020
Depending on where you live, you might have to deal with more red tape than you think if you want to install solar panels. Different states have different laws when it comes to installing solar power and some states even offer incentives for selling it back to the grid. In this article, we break down the different factors of what makes solar power so varied from state to state.
Lobbyists and Electricity Costs
First off, money is always an issue. And by that, we're talking about lobbyists. Fossil fuels (coal, oil, and natural gas) account for nearly 81% of the energy used in the United States, so there are a lot of jobs on the line and a lot of money to be made. Often, these major corporations will have lobbyists representing them on Capitol Hill and try to pass legislation that gives them more power. When this happens, fledgling solar companies are typically pushed aside. This also happens at the state level, which is another reason why regulations vary from state to state.
Some states are known to make solar access difficult in order to keep electricity costs down. This is the case in many southern states that are able to access cheap electricity through the use of coal. With that being said, coal and electricity companies find interference of solar power systems as cumbersome to the system in place. Ironically, it's some of these states, such as Florida, which experience hundreds of sunny days out of the year. Though these problems exist, the fear of solar companies encroaching upon the business of utilities is likely playing a bigger role.
Renewable Portfolio Standards
This doesn't mean that solar energy is getting completely pushed aside in its growth. Many states have renewable portfolio standards in place to help the renewable energy industry flourish. A renewable portfolio standard is a government mandate that requires states to increase their production of renewable energy sources such as solar, wind, and biomass. Some states offer better RPS than others, such as Minnesota, New Mexico, and Vermont. States such as Arkansas, Wyoming, and West Virginia score the worst when it comes to RPS. Not surprisingly, the latter three states are in the bottom five in the country for solar-friendliness.
Homeowners Associations and Solar Access Laws
A homeowners association is a group you're obligated to join if you lease/rent a condominium, apartment, or some other unit of joint housing. Being a member of a homeowners association can make acquiring solar panels nearly impossible. However, some states have solar access laws in place that give consumers the green light to acquire solar panels, even if it goes against a homeowners association. States that include solar access laws are the following:
Community Solar Policies
These are relatively new to the solar industry, having been introduced in 2006. A community solar policy would involve a group of individuals owning property collaborating to benefit from the same solar panels. This is more common for people that are renting or for homeowners whose roofs don't support solar panels. Some of the worst states in the country for solar do not support community solar policies.
This involves leasing or loaning solar panels to potential owners. According to Green Tech Media, approximately 72% of solar panels installed in 2014 were third-party owned. This is so popular because, frankly, solar power is expensive. It's safe to say that most consumers don't have tens of thousands of dollars of expendable income, so this makes leasing or loaning solar power more appealing. If it comes time to decide between leasing and taking out a loan for panels, it's good to know that leasing is trending down in the market. This is because leases are often bound by long contracts, you can't claim the 30% Federal income tax credit, and they don't increase the market value of your home.
The Overall Best and Worst States
Solar Power Rocks recently compiled a list of the best and worst states in terms of solar-friendliness with criteria considering factors such as RPS, net metering, property and sales tax exemption, interconnection, and others. The data revealed the following:
Best states for solar:
- New Jersey
- New York
Worst states for solar:
- West Virginia
Interested in seeing exactly where your state ranks in relation to others when it comes to solar friendliness? Our friends at solarpowerrocks.com also put together this helpful chart to illustrate just how "green" friendly your state is:
Because solar regulations are different in every state, some companies choose to operate in some states and stay out of others. Web sites such as BestCompany.com sort out solar companies that don't operate in certain states because the issue is so prevalent. To put this in perspective, approximately 190 solar companies operate in the state of Massachusetts (the most solar-friendly state) while only one operates in Arkansas (the least solar-friendly state).