Going solar can yield over $25,000 in energy bill savings over the 25+ year lifespan of a typical residential solar system in Missouri. With electric rates averaging $.15/kWh across the Show-Me state’s varied utility territories, households with solar arrays sized to offset 50-100% of usage can pocket some serious cash.
But with the state’s Renewable Portfolio Standard (RPS) having already met its goals back in 2021, some incentives tied to solar energy mandates have recently dried up. Luckily, between federal tax rebates, net metering payouts, and remaining utility programs, there are still plenty of ways Missouri homeowners can maximize savings with a solar installation.
This guide will break down every avenue to reduce costs when going solar in MO currently and project what smart homeowners could save.
Solar Savings in Missouri By the Numbers
Based on recent installation data for Missouri, here are some ballpark figures for average system sizes and costs for homes in the state:
- Average System Size: 6 kilowatts (kW)
- Average Installation Price: $2.60 per watt
- Total System Cost Pre-Incentives: $15,600 for 6 kW
With a 6 kW array meeting about 75% of an average home‘s electricity usage and MO energy prices around 15 cents per kWh, a resident could save roughly $1,500 per year…or $39,000 over a 25 year solar panel lifespan!
Of course those numbers will vary based on system size, household energy use, and other factors. But with smart planning and factoring available incentives, most Missouri solar customers can expect to pocket 20-30% short term savings off installed costs and tens of thousands long term from energy bill reductions.
Let‘s break down exactly what‘s out there to maximize savings!
Combining the Federal Solar Tax Credit with Missouri Utilities‘ Rebates
Without a doubt, the federal Investment Tax Credit (ITC) remains the most valuable solar incentive in 2023. This program offers homeowners a 30% tax credit based on the total cost of purchasing and installing a solar array.
In other words, put $10,000 towards a solar system and you‘ll get $3,000 back come tax refund season. This credit stays at 30% until the end of 2032 before incrementally stepping down each year. For homeowners in the Show-Me State, it essentially reduces upfront system costs by nearly one third.
When combined with additional rebates offered directly by Missouri utilities like Ameren Missouri, Evergy, Empire District Electric, and others, the savings can really add up.
For example, Joe Smith recently had solar panels installed on his St. Louis home through Evergy‘s rebate program:
- System Size: 5.2 kW
- Gross System Cost: $13,520
- Evergy Solar Rebate: $1,950
- Estimated Federal Tax Credit: 30% of Gross Cost = $4,056
Accounting for both rebate and tax credit savings, Joe‘s out-of-pocket cost dropped over $6,000! Not bad for what will likely amount to over $20,000 in total energy bill savings according to his installer Sun Solar.
Below is a table showing combined incentive savings in Missouri for varying purchase amounts:
| System Cost | Utility Rebate* | Federal Tax Credit @ 30% | Total Savings |
|---|---|---|---|
| $10,000 | $750 | $3,000 | $3,750 |
| $15,000 | $1,125 | $4,500 | $5,625 |
| $20,000 | $1,500 | $6,000 | $7,500 |
* Assuming $0.75/Watt rebate from Evergy Solar, Ameren Missouri, or Empire District Electric
As you can see, when you combine available incentives in Missouri, over 35% of solar equipment and installation costs can effectively be wiped away!
Homeowners who purchase solar outright rather than leasing reap the most savings from incentives and tax programs. Let‘s analyze why…
Solar Ownership vs Leasing in Missouri: The Financial Pros & Cons
While solar panel leasing and "zero money down" options have opened the door to more environmentally conscious homeowners going green, they also come with financial tradeoffs rarely explained up front. Namely, leased solar systems disqualify homeowners from tapping into big savings via tax credits and rebates.
To help Missouri residents make the most informed decision of whether to own vs lease solar panels, here is a quick pros/cons breakdown:
Solar Ownership Pros
- 30% Federal Solar Tax Credit eligibility
- Access to all available utility/state/local rebates
- Low interest solar loans provide affordable financing
- Panels and production belong to you
- Greater ROI with electricity savings
Solar Ownership Cons
- Higher upfront purchase cost
- Responsible for repairs and maintenance fees
- No performance guarantees from installer
Solar Leasing Pros
- Little to no upfront installation costs
- Fixed monthly payments likely less than bill savings
- Installer responsible for maintenance/repairs
- Possible production guarantee
Solar Leasing Cons
- Forfeit access to 30% Federal Tax Credit
- Ineligible for utility/state/local incentive programs
- Leasing company owns panels
- Smaller solar bill savings each month
While leased solar systems carry less personal risk and financial burdens up front, purchasing and owning your array allows far greater long term ROI thanks to combined savings from incentives and energy production credits.
For example, let‘s compare 25-year lifetime costs and savings for homeowner Lisa Johnson based on her two solar options:
| Solar Ownership | Solar Lease |
|---|---|
| System Cost: $18,000 | $0 upfront cost |
| Federal Tax Credit: $5,400 | Ineligible |
| Utility Rebate: $1,350 | Ineligible |
| 25-Year Energy Savings: $23,500 | 25-Year Savings: $12,150 |
| Total 25-Year Benefit: $30,250 | Total 25-Year Benefit: $12,150 |
By owning her panels, Lisa pockets an additional $18,100 over 25 years despite higher upfront costs!
Clearly, homeowners need to run the numbers based on incentives available to them in Missouri and projected utility savings. But in most cases, owning your solar system outright maximizes ROI.
This table summarizes key financial benefits accessible to Missouri residents who purchase vs lease solar:
Now let‘s examine other policy supports solar system owners can leverage for additional long term savings…
Net Metering & Renewable Energy Credits Add Up for Solar Owners
Aside from upfront incentives and tax programs, Missouri state regulations like net metering and solar renewable energy certificates (SRECs) offer additional ways for solar panel owners to save money over time.
Net Metering policies require utility companies to provide bill credits at retail electricity rates for any excess power generated by homeowners‘ solar arrays and fed back into the grid. Rather than just break even, this enables families with solar panels to actually generate income through selling surplus production.
While Missouri‘s version of net metering downgrades the credit rate solar customers receive, the bill savings can still add thousands back over a system‘s lifespan. Exact payout amounts vary by utility provider territory given differences in local energy rates, but below is an approximate 20-year projection based on 6 kW and 10 kW system sizes:
| System Size | Est. Lifetime Energy Export kWh | Avg MO Electricity Rate* | Est. Net Metering Credits |
|---|---|---|---|
| 6 kW | 22,500 kWh | $.15 / kWh | $3,375 |
| 10 kW | 40,000 kWh | $.15 / kWh | $6,000 |
* Statewide Average Retail Electricity Rate from U.S. EIA as proxy
Meanwhile, excess power sent back to the grid also qualifies Missouri solar homes for SRECs in regulated regional markets. As voluntary ‘credits‘ bought by utilities to meet state renewable targets, every 1,000 kWh (1MWh) of solar power exported currently earns homeowners ~$25.
Though the local solar incentive landscape remains uncertain, both net metering bill credits and SREC sales provide nice buffers while state or federal policies play catch up. Between these programs and upfront incentives, Missouri households investing in solar today are well-positioned to maximize savings.
Key Takeaways: Top Ways to Save with Solar Panels in MO
For Missouri residents eager to harness their state‘s abundant sunlight but uncertain if solar power can fit within their budget, this overview should provide a clearer picture and confidence. Between straight purchase discounts, future bill credit earnings, and generation incentives, current homeowners could feasibly save 50% off the lifetime costs of going solar while slashing energy expenses long term!
Here are the top money saving solar opportunities to take advantage of today:
- Claim the 30% Federal Solar Tax Credit before it starts stepping down (saves $1000s)
- Check Electric Utility for Rebate Offers while programs are active (save $100s)
- Explore Low Interest Financing Options to buy instead of lease
- Leverage Net Metering credits from excess solar production (save 1000s)
- Earn Income from Solar Renewable Energy Credits programs
And with federal tax benefits staying strong through 2032, Missouri homeowners still have some breathing room to capitalize on the most substantial current incentive.
Communicate with one of the qualified local solar installers servicing your region to run detailed cost savings estimates and financing options for your home. With their expertise guiding solar system sizing and financial projections, you can find the optimal balance of upfront affordability and long term ROI.
The path to affordability is clear for residents that want to profit from solar. Now is the time for Show-Me State homeowners to show themselves the savings!
Additional Resources:
- Database of Top Missouri Solar Panel Installers
- Solar Tax Credit Eligibility & Guidance
- Incentives for Electric Vehicles in Missouri
- EIA Data on Missouri Electricity Costs & Consumption
- The Brighter Future of Community Solar in Missouri
Frequently Asked Questions
How much can I really save by adding solar panels in Missouri?
- Between federal tax credits (30%), utility rebates ($750-$1500), net metering bill credits ($3000+), and 25 years of avoided electric bills ($25,000+), a Missouri homeowner investing in a typical 6 kW solar array today could pocket over $30,000 in lifetime savings!
What happens if I lease solar panels instead of buying them?
- While solar leasing comes with little to no upfront installation costs, it forfeits access to tax credits & rebates. In Missouri, that could mean losing out on $4000+ in purchase discounts and incentives. Leased solar systems lead to much lower lifetime savings.
When do solar incentives in Missouri expire?
- The federal solar tax credit remains at 30% through the end of 2032 before stepped phaseouts each year. Some utility rebates may reduce or disappear as early as 2025 if solar carve-outs are removed from renewables policies.
