Oregon may not be the first place you think of when it comes to solar energy. Cloudy skies and rainy weather obscure the fact that the Beaver State sits well within an ideal latitude for harnessing power from the sun all year. And thanks to progressive state policies, solar panels make good economic sense here too.
In this article, I‘ll analyze in detail whether solar power can save you money based on Oregon‘s incentives, electricity rates, and payback periods. I‘ll also discuss some persistent barriers like high upfront costs before making a final recommendation on whether now is the time to go solar.
Solar Use is Growing Despite Oregon’s Climate
Oregon has seen impressive growth in solar adoption over the last decade. Total installed capacity has risen over 3,000% since 2012 to rank 9th nationally. The state‘s 1,800+ megawatts of solar panels in operation can generate enough clean electricity to meet 6% of all demand – equal to the needs of 172,000 homes!
Much of this momentum comes from favorable state and federal incentives aimed specifically at overcoming Oregon‘s weather challenges. Later we’ll discuss exactly how these credits, rebates, and other programs work to make solar affordable.
First let‘s analyze the costs and bill savings potential of going solar in Oregon.
Solar Installation Costs Vary Across the State
Statewide average solar installation costs sit right around $2.50 per watt, ranging from $2.15/W in populous areas to $3.15/W in remote locales. But to right-size your system, you need to account for Oregon’s limited sunlight.
The state averages just 4.03 peak sunlight hours per day, meaning solar panels only produce at their full rated capacity for 4 hours. Yet the typical Oregon household uses 30.5 kWh of electricity daily. To meet that demand requires a 7.6 kW solar array rather than the oft-assumed 6 kW national standard system size.
| Location | Avg Cost Per Watt | System Size | Pre-Incentive Cost |
|---|---|---|---|
| Portland | $2.15 | 7.6 kW | $16,340 |
| Bend | $2.85 | 7.6 kW | $21,660 |
| Rural | $3.15 | 7.6 kW | $23,940 |
Costs are lowest in population centers where market competition keeps solar installer profit margins lower. But adjust expectations on required system size to account for less sunlight across Oregon.
Bill Savings Depend on Electric Utility Rates
Do electricity costs justify a large solar investment despite Oregon’s relatively low rates?
The state average is $0.105 per kWh thanks to abundant legacy hydropower. But solar economics improve for the 25% of households served by pricier electric co-ops and municipal utilities.
| Utility | Avg Rate | Monthly Bill | Annual Bill |
|---|---|---|---|
| Portland General Electric | $0.11 | $114 | $1,365 |
| Pacific Power | $0.10 | $92 | $1,100 |
| COUs & Municipal Avg | $0.13 | $167 | $2,000 |
To determine potential savings, we project a baseline 2% annual utility rate increase over 25 years. This is likely conservative given historical averages nearly twice as high.
| System Size | 25-Year Bill Savings |
|---|---|
| 7.6 kW – PGE | $15,820 |
| 7.6 kW – Pacific Power | $9,150 |
| 7.6 kW – COU/Municipal | $27,500 |
Solar economics improve further with higher utility rate forecasts. But even at just 2% annual increases, the bill savings justify solar investments for most Oregon homeowners.
Incentives Significantly Reduce Upfront Costs
Oregon features a suite of strong financial incentives to make solar affordable despite cloudy weather limiting output.
Federal Solar Tax Credit
This policy offers a 26% credit for systems installed in 2023, dropping to 22% in 2024. It applies directly against the full installation costs, including:
- Equipment (modules, inverter)
- Labor
- Permitting/inspection fees
- Sales taxes
Net Metering
When your solar panels produce more electricity than your house is using, net metering allows excess energy to flow back to the grid. Your utility credits that generation at the full $0.10 to $0.13 per kWh retail electricity rate.
Cash Incentives
Utilities and state/local programs offer upfront rebates to solar customers, typically around $0.50 to $1.00 per watt installed.
Combined, incentives reduce out-of-pocket solar costs to around $2.00 per watt across most of Oregon.
| Location | Net Cost After Incentives |
|---|---|
| Portland | $1.90 per watt |
| Bend | $2.25 per watt |
| Rural | $2.60 per watt |
That drops a 7.6 kW Portland system cost from $16,340 to just $14,440 after the 30% federal tax credit. Other cash rebates and ongoing net metering revenue reduce effective costs further.
Payback Horizons Still Trail Sunnier States
Even with strong incentives, solar payback estimates trail leading states. The above 7.6 kW system example would take:
- 13.5 years to break even for a Portland homeowner.
- 15.2 years for typical Pacific Power territory.
- 10.7 years for rural electric co-op customers.
Payback periods lag behind Arizona, Nevada, New Mexico and states with more sun mainly because Oregon’s underlying utility electricity costs started lower. Solar savings grow on top of that baseline.
However, Oregon solar return on investment (ROI) calculations still justify installations with panel warranties lasting 25 years or more. If high utility rate increases materialize, payback would occur even faster.
Barriers Beyond Payback Persist
So if solar works financially based on bill savings and incentives, why don’t we see more homes going solar in Oregon?
Upfront Costs – Even though incentives slash total solar costs by up to 65%, $15,000 all at once for equipment remains a tall order. Loans help ease that burden.
Aesthetics – Some homeowners worry about marring appearances or views from their property by putting solar panels on perfectly good roofs. But surveys show these concerns fade once panels actually go up.
Permitting & Regulations – Local inspection backlogs and fire code considerations occasionally slow installs. Most solar companies efficiently navigate the small paperwork challenges.
Weather & Maintenance – Oregon’s wet climate necessitates tilt-mounted solar arrays so water runs off easily. Rain and wind also require sturdy roof equipment. Conscientious cleaning keeps panels running at peak efficiency.
Grid Upgrades – In certain urban neighborhoods, adding solar may require costly utility equipment upgrades if lots of local homes feed power back to overloaded lines.
The Future is Bright for Oregon Solar
Incentive-driven economics already justify solar installations for many Oregon homeowners today even accounting for limited average sunlight. As solar purchase and financing costs fall while retail utility rates keep rising, ROI timeframes will continue improving.
If you‘ve considered going solar in the past but hesitated due to high costs or uncertainty over Oregon‘s climate, now may be an ideal time to get started. Reach out to local installers for quotes using estimated costs and appropriate system sizes from this article.
Take advantage of current federal tax credits before they step down again. And leverage all available Oregon solar incentives, bill credits, and rebates to maximize savings over the long run. Within 15 years, your array will have fully paid for itself while keeping the lights on using free power from the sun.
