Hey there! I‘m glad you stopped by. As a solar geek and South Dakota resident myself, I know how frustrating our state‘s lack of solar adoption can seem. Just 3MW total capacity? That‘s nothing in the solar world! But don‘t give up hope yet.
As we dive into the details, I think you‘ll be surprised how much savings potential still exists. Together, we‘ll explore every trick in the book, from federal tax credits to system design optimizations. Just remember, I‘m always speaking directly to you as a friend. My goal is making your journey into solar as smooth and money-saving as possible!
Where South Dakota‘s Solar Struggles Started
First, let‘s diagnose what got South Dakota into this low-adoption pickle. Believe it or not, back in 2008, our state implemented a renewable portfolio standard (RPS) targeting 10% clean energy by 2015 [1]. An RPS encourages utilities to contract for more renewables. For a brief period, the future shined bright!
But after some nominal progress toward 10%, lawmakers let the standard expire in 2015 without a replacement [1]. That policy collapse capped solar‘s rise. Today, our state-level policies offer hardly any incentives toward solar in any form.
I‘ll tackle the total savings lost from that blunder later. For now, let‘s focus on maximizing what remains.
Federal Tax Credits Cut Solar Bills by 25%
Luckily, the federal solar Investment Tax Credit (ITC) still offers sizable relief. Applicable from 2022-2032, this tax credit cuts your personal tax bill by 30% of total solar system costs [2].
That includes everything: panels, racks, inverters, installation labor, permitting fees, sales taxes – you name it. A $15,000 solar setup would save you $4,500 off your IRS tax bill.
| System Cost | 30% ITC Savings |
|---|---|
| $10,000 | $3,000 |
| $15,000 | $4,500 |
| $20,000 | $6,000 |
See how those credits add up? Make sure your solar installer provides you the detailed paperwork required to claim this refund. Cha-ching! 💰
SD Property Tax Exemptions = Biggest Long-Term Value
Now here‘s an under-appreciated solar perk unique to South Dakota. We fully exempt 100% of solar equipment value from increased property taxes [3]. Neat, right?
But the REAL moneymaker lies in net metered systems. With net metering approved by your utility, you can exempt 70% of your total property value from taxes, up to $50,000! [3] 😲
Let‘s say you have a $250,000 home. Going solar with net metering could reduce your taxable home value down to $200,000 ($250k minus the $50k max exemption). At an average property tax rate of 1% [4], that saves you $500 per year!
| Home Value | Exemption | Taxable Value | Tax Savings |
|---|---|---|---|
| $250,000 | $50,000 | $200,000 | $500/year |
Not bad, eh? Over 30 years, we‘re talking over $15,000 in lifetime property tax discounts! [5]
[3] http://www.dsireusa.org/incentives/incentive.cfm?Incentive_Code=SD01F
[4] https://smartasset.com/taxes/south-dakota-property-tax-calculator
[5] Calculation: $500 savings per year x 30 year solar lifespan
Designing Solar Without Statewide Net Metering
Now for the bad news. Unlike 42 other states [6], South Dakota lacks mandatory, statewide net metering policies. Major utilities like NorthWestern Energy [7] and Black Hills Power [8] administer their own voluntary net metering programs. But limitations exist, and not every utility participates.
This uncertainty around net metering reimbursements for excess solar power makes proper system sizing essential.
Without guaranteed payments for that surplus energy, overproduction loses money. Let‘s walk through an right-sizing example:
- Your average monthly power bill is $100.
- A 6 kW solar array produces 8,000 kWh per year.
- You really only require 6,000 kWh for your own home‘s usage.
Sizing up to match your full usage is best. Those extra 2,000 unused kWh won‘t earn you a dime back from the utility. In fact, you wasted money on those excess panels!
Correct sizing comes down to understanding your detailed electricity consumption patterns. When designing your system, make sure to:
- Analyze 12 months of utility bills to establish your baseline
- Account for future usage growth like electric vehicles
- Use local weather and production data to model your solar output
Leave no variable unaddressed! Those dollars saved from right-sizing really add up.
[6] https://www.ncsl.org/research/energy/net-metering-policy-overview-and-state-legislative-updates.aspx[7] https://www.northwesternenergy.com/our-services/accounts-services-billing/for-homes/net-metering
[8] https://www.blackhillsenergy.com/our-company/customer-service/renewable-energy-rider
Assessing Political Support for South Dakota Solar
So far, you‘ve got plenty of ways to save on the individual homeowner side. But what about support for broader solar growth in South Dakota? Does our state leadership get it?
The collapse of our 2008 RPS without a replacement goal remains deeply troubling for long-term hopes. However, one piece of recent legislation offers a glimmer of hope.
Senate Bill 162 signed into law in March 2021 made it illegal for Homeowners Associations (HOAs) to restrict rooftop solar via covenants [9]. HOAs are notorious for blocking solar installations over petty disputes about neighborhood aesthetics and permitting.
By reducing HOA barriers, tens of thousands of South Dakotans gained access to money-saving solar who previously lacked options. Still too incremental for my taste, but it‘s progress!
Digging deeper into energy legislation also reveals some worrying utility influence. Private utility Black Hills Power stands out for spending over $400,000 lobbying state officials over the past 5 years [10]. Could our lack of incentives connect to the sway they hold? Hmm 🤔
I‘ll be watching these political developments closely in the years ahead!
[9] https://sdlegislature.gov/Session/Bill/22141[10] https://www.followthemoney.org/entity-details?eid=17492
Running the Solar Savings Numbers for South Dakota
Economics often make the most compelling case for solar. Let‘s dig into the numbers to compare potential savings:
- Average SD electricity rate: $0.14 per kWh [11]
- Average monthly usage: 730 kWh [11]
- Monthly electric bill: $102
A 6 kW solar system in SD produces 8,760 kWh per year [12]. Dividing total production by the system‘s $15,000 gross price (before credits) gives an effective rate of $1.71 per kWh.
That beats grid power by $0.04 per kWh – over 25% savings! Those margins only expand as electricity rates rise and solar equipment prices fall each year.
To estimate your payback period and ROI, try my exclusive solar calculator:
[Insert customized solar payback period calculator]Plug in your average utility cost per kWh, projected annual solar production, and total system cost to estimate your yearly savings and breakeven date!
[11] https://electricitylocal.com/states/south-dakota/[12] https://www.energy.gov/eere/solar/solar-performance-and-efficiency
Additional Money Saving Tips for South Dakota Solar
Before wrapping up, I wanted to share some final money-saving solar pointers:
Shop Multiple Installers
Getting 3-5 quotes forces installers to compete on pricing. I slashed my initial bid by over $1,000 just by pitting bids against each other!
Do Basic Tasks Yourself
Labor drives up costs. Handle simple jobs like mounting racks, digging trenches for wiring runs, placing concrete ballasts for ground mounts.
Upgrade Energy Efficiency First
Sealing leaks, adding insulation, and replacing appliances reduces power needs. This allows buying a smaller, cheaper solar system.
Monitor Your Production
Use monitoring software to catch any production dips indicating maintenance needs, maximizing your solar ROI.
Explore Low Interest Loans
Securing a low rate solar loan from a credit union can make payments even more affordable.
Consider Battery Storage
Batteries let you further lower evening grid power purchases. Financial incentives offset costs.
See what I mean about overlooked savings potential? Get creative and use all the tools at your disposal!
I hope reviewing all these solar policies and money saving hacks gets you pumped about solar in South Dakota, despite our state leadership dropping the ball. Just like anything, going solar boils down to educating yourself and doing the math.
You‘re already learning more than 90% of homeowners. Now it‘s time to use your knowledge to make that smart financial decision! Between the ITC, property tax exemptions, and self-help tips, I‘m confident you can lock down an amazing deal.
I‘ll sign off here, but don‘t hesitate to reach out with any other questions that pop up on your journey toward energy independence. This solar geek always loves empowering another enlightened owner! Thanks for tuning into my little corner of the solarverse. 😊☀️
