6 States That Are Great for Solar Panels

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Many of the world’s nations have agreed to transition away from using fossil fuels such as coal, oil, and natural gas. But long before this milestone moment occurred, individuals have been seeking greener, affordable energy alternatives. Much of their focus has been on the installation of solar panels.

Latitude, elevation, cloud cover, shade, and volume of aerosols are key factors in determining where solar energy can best be produced. The calculus can get complicated. But in general, higher latitudes are poorer spots for panels, while higher elevations are better. Hours of sunshine matter.

For those living in the United States, there are other factors to consider when calculating the benefits of solar energy. There’s the cost of nonrenewable energy and financial incentives that make going solar more affordable and allow homeowners to recoup their investment quicker.

The fact is that, for different reasons, some states are better suited for investing in solar panels than others. Here are six that are and why they’re at the top of the list.

1. Massachusetts

When you’re thinking about the best states for solar energy, Massachusetts probably doesn’t immediately spring to mind. But residents of the Bay State pay some of the highest electric rates per kilowatt hour in the nation. That makes the cost effectiveness of going solar quite attractive.

The state also offers numerous incentive programs that make solar installation more affordable. It supports a significant number of jobs in the solar industry, too. That’s a plus for access on the smaller residential scale.

Today’s solar panels operate on both direct and indirect sunlight. Although you can convert more energy on bright, sunny days, your panels are still working when it’s cloudy. And when you need backup, Massachusetts utilities are there to assist.

2. Connecticut

In terms of the number of sunny days each year, Connecticut is roughly on par with Massachusetts. As for its utility rates, they’re the highest in New England. Like its neighbor to the north, that means its solar power prowess comes from factors other than the sun itself.

What makes Connecticut a great state for solar is that it provides great incentives for residents wanting to install solar panels. Low-interest loans and loans requiring no money down are two of them. Valuable tax exemptions are another.

What’s another thing that lands the Constitution State on the list? How about the fact that it’s one of the top states in the country for recouping the up-front solar investment? That’s a utility savings advantage in its own right.

3. California

OK, so you knew the state where it “never rains” had to be a great spot for solar energy. But it’s not all about sunny weather. It’s also California’s aggressive goal to be 100% carbon neutral by 2045.

To that end, the state offers more solar power incentive programs than any other state. It’s paying high rates for net metering and is making solar energy accessible to low-income residents. And although California has relatively low property taxes, there are tax exemptions for solar customers.

The Golden State’s utility rates are in the top three nationwide, so that should be incentive enough to install solar panels. Its rank among the top five states for average days of sun is also a bonus. California residents are benefiting from investing in solar, come rain or come shine.

4. North Carolina

If you want to get on board one of the fastest-moving solar trains, North Carolina is it. Ranked 14th in the nation for solar power generation in 2022, it jumped to 4th in 2023. Its current megawatts of cumulative solar capacity lag behind only California and Texas.

North Carolina residents don’t have to pay property taxes on the increased value of their homes after installing solar panels. And residents can lease their solar setups rather than buy them. That means more people can benefit from the technology without the major outlay to get their panels up and running.

The state’s commitment to building solar capacity is evident in governmental policy and regulatory support. It makes sense that if the state government is pushing policies that make solar easier to access, the industry will grow. And apparently, the Tar Heel State isn’t biding its time to reach the top.

5. Texas

When you think about Texas, you probably think about big oil. You might also remember the state’s self-run, deadly power grid failure during winter storms in 2021. Solar energy helped keep that problem from getting even worse.

The Lone Star State is investing billions in solar energy in its efforts to make its grid more resilient. Solar rebates, property tax exemptions, and buy-back and net-metering programs are healthy incentives for residential customers. Plus, it’s among the top 10 states with the most clear days and is less forested than many others.

By most solar impact measurements, Texas is second only to California. These two states may be on the opposite ends of the political spectrum, but they’re getting closer on the solar one.

6. New Jersey

Rounding out the list is yet another less obvious contender for “great” status. On average, New Jersey has fewer than 100 days of sunny skies per year, but that’s not stopping growth of solar power use. Neither is its current production of solar on the electricity grid of less than 10%.

The Garden State is aiming for greener pastures with more than 40 incentive programs. No matter where you live in the state, you’ll get one credit for every megawatt hour of solar energy you produce. You’ll also get a payout of $90 for every credit earned under its Successor Solar Incentive Program.

New Jersey residents pay no sales tax on solar panels and equipment, which is a huge savings on the overall investment. While that’s a loss to the state’s coffers, it’s a boon for residents who go solar.

Reach for the Sun

When considering ways to make solar panels pay off, you can’t overlook the value of federal tax credit incentives for residential solar installation. The Inflation Reduction Act of 2022 boosted the tax credit from 26% to 30%. It also moved the credit sunset to 2032 and made the higher credit retroactive to installations purchased in 2022.

Nonetheless, where you live in the U.S. matters. It determines everything from what additional incentives you’ll receive to how much energy you’ll produce. The six states discussed here are reaching for the stars by way of the sun.

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