Your Guide to Solar Panels in Missouri: 7 Steps to Solar Panels in Missouri
By Dan Simms /
In this guide to solar incentives in Missouri, you’ll learn:
In Missouri, the state’s incentive programs make converting to solar energy accessible and affordable for homeowners. In fact nationwide, 1 in 4 homeowners plan to upgrade to solar energy in the next 5 years.
The average cost of converting to solar in Missouri is $27,195 before any incentives are applied. This total is about 13.6% higher than the national average of around $23,940. As you can see, your money doesn’t go quite as far when converting to solar in Missouri as it might in other states.
This difference is primarily because Missouri residents consume more energy each month than the national average.1 That means larger and more expensive photovoltaic (PV) systems are required to offset your energy consumption in Missouri.
However, Missouri has solar incentive programs that can help lower your effective system costs and increase your long-term energy savings. Missouri has better incentives than most other states despite its minimal Renewable Portfolio Standard (RPS) goal to generate 15% of all state energy from renewable sources by 2015.2
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The table below includes a comprehensive list of benefit programs available to solar customers in the state of Missouri. We’ll also include information on approximately how much money each perk can save you.
Solar Incentives in Missouri | Incentive Type | Description | Occurrence | Estimated Dollar Amount You Can Save |
Federal Solar Investment Tax Credit (ITC) | Federal | Credit to your income tax liability for 30% of your entire solar panel system value | One-time: Applied when you file your taxes for the year you install your solar panel system | $8,159 on average in Missouri |
Show Me Property-Assessed Clean Energy (PACE) Financing | State | Provides affordable and accessible financing for solar equipment | One time: Goes into effect prior to installation when you apply for the program | Varies based on your system size, the solar company you choose and how you use the savings |
Solar Property Tax Exemption | State | Exempts the value of your home solar equipment from your property tax assessment | Continuous: Applied to your property taxes after you convert to solar | Varies based on your property value, the cost of your system and your baseline property taxes |
Set the PACE St. Louis | Local | Provides affordable and accessible financing for PV equipment | One time: Goes into effect prior to installation when you apply for the program | Varies based on your system size, the installer you choose and your loan terms |
Net Metering | Local | Credits you for excess electricity production beyond what you use. Credits can offset future utility bills | Continuous: Always in effect | Varies based on your system size, your energy needs and your electricity production |
Columbia Water & Light Rebate | Utility | Rebate for installing a solar system — earn up to $625 per kilowatt (kW) for the first 10 kW of your system, then $500 for each additional kW | One time: Applied after you install solar equipment | $6,750 on average in Missouri |
Columbia Water & Light Financing | Utility | Solar financing program with low interest rates and terms of up to 10 years | One time: Goes into effect prior to installation when you apply for the program | Varies based on your system size, the installer you choose and your interest rate |
Evergy (Kansas City Power & Light) Solar Rebate | Utility | Rebate of up to $0.25 per watt for PV equipment | One time: Applied once after you install solar equipment | $2,525 on average in Missouri |
Empire District Electric PV Rebate | Utility | Rebate of up to $0.25 per watt for PV equipment | One time: Applied once after you install solar equipment | $2,525 on average in Missouri |
The federal solar credit is one of the most valuable solar incentives available to you as a Missouri resident, and the federal government makes it accessible to all first-time solar customers.
The credit is equal to 30% of your entire solar energy system cost, which gets applied to your income tax liability for the tax year you install your solar equipment. In Missouri, where the average solar energy system size required is 10.5 kW and costs $27,195, the 30% federal credit averages out to $8,159.
It’s important to note that this amount gets credited to your tax burden, so if you don’t owe taxes to the federal government, you won’t be able to take the credit. However, you can take a partial credit if you owe less than the full amount and apply any remaining credit to future tax years for up to five years.
The federal credit has been around since 2005, at which point it was also available at 30% of your entire system value. The percentage dropped to 26% in the early 2020s and was scheduled to dip again to 22% and disappear entirely in 2023.
However, thanks to the Inflation Reduction Act, the credit was renewed in 2022. The new rate schedule is as follows:
The Inflation Reduction Act can help with solar affordability but it can also do much more, calculating your return is easier than ever with the help of tools like IRA calculators that ensure you’re not leaving an IRA money on the table.
Applying for the federal tax credit is simple and should only take you a few minutes. We’ll outline the steps below to help you take full advantage of this solar perk.
If you only have time to file for a single incentive, make sure it’s the federal solar credit. The tax credit not only takes just a few minutes to file for but also provides the highest effective savings of any incentive available in Missouri.
Keep in mind that you can only benefit from this credit if you owe taxes each year. If your tax liability is $0 or the government owes you money, this credit will not provide any value to you. You can, however, take part of the credit and roll the rest over for up to five years.
If you expect to owe at least a few thousand dollars in taxes over the next five years, we recommend you take this credit.
PACE financing is a popular incentive across many states, including Missouri. This financing program provides accessible solar loans to homeowners in the Show-Me state. It’s a good alternative to lease options, which don’t lead to panel ownership nor provide the same warranty coverage.
The program uses your property value as collateral for a loan, and you pay monthly installments on your tax bill to keep prices as low as possible.
PACE and other solar financing programs are beneficial because they:
While you’ll pay more for your system over time with a loan — an average of around $5,000 more overall — the PACE program also gives you access to energy savings. The savings you can achieve with this financing program should be around $12,000. For comparison, the typical lifetime savings when buying a system in cash in Missouri — which provides the most savings over time — average around $18,292.
Filing for the PACE program in Missouri is relatively straightforward, although it can be a bit time-consuming. We’ll outline the steps you’ll need to take below.
PACE financing can benefit some Missouri homeowners, but it’s certainly not for everyone. It can be a bit time-consuming to check eligibility and provide all the necessary information to proceed with your PACE solar installation.
The most significant downside to PACE financing is that the lien on your home travels with your property, similar to a home equity line of credit (HELOC). So if you sell your home before your loan term has ended, the new homeowner will have to assume responsibility for the payments.
This lien can make selling your property a challenge, and in some cases, could lead to buyers paying less for your property. In our opinion, you should opt for a cash purchase or a more traditional solar loan if you can afford it. PACE financing is best for homeowners who expect to live in their homes for 20+ years and cannot afford other payment options.
Missouri exempts all solar equipment from property taxation, which means installing a solar system on your home will not make your taxes go up. This is great news, as it reduces the potential financial burden of converting to solar energy.
Normally, any home improvement that bumps up your home value will also cause a spike in your taxes. While solar is expected to boost your property value by around 4.1% in Missouri, the state’s property tax exemption prevents that boost from also causing an increase in your taxes.3
Given the average solar power system value of $27,195 in Missouri and the state property tax rate of 0.93%, this exemption should save you around $252 each year after your system is installed.
While the savings provided by this benefit program are generally low, it doesn’t require any work on your part to claim. The tax assessor’s office in your local municipality will not consider solar permits when determining the value your equipment adds to your home.
The solar exemption for property taxes is a beneficial program that helps reduce the financial burden of going solar. Without it, you’d end up spending an additional $250 per year in taxes just for adopting solar energy.
Since the exemption doesn’t require any time or effort on your part, it’s a great incentive for Missouri residents.
Set the PACE St. Louis primarily provides PACE financing — as we detailed above — for commercial solar customers. However, a subsection of the program also offers traditional low-cost solar loans for residential solar customers.
The program partners with YGrene and Fiona, two solar and home improvement financiers, to provide access to low-APR financing options with minimal down payment requirements. Applying for this program can help you access an affordable financing option so you can go solar without the upfront cost of a cash purchase.
The program is a good alternative to lease options, which are less appealing overall.
The process to enroll in this financing program is simple. We’ll lay out the steps below.
This program is a great option for commercial customers looking to convert to solar energy, and it also provides a decent financing option for residential customers. Loans with low APR and down payments, like those offered by this program, can help make renewable energy more accessible to Missouri residents.
The application process is simple and shouldn’t take long to complete, so the time investment is well worth it to access solar.
Net metering — also called net energy metering (NEM) — is an important incentive for solar customers in Missouri. Through interconnection with the electric grid, this billing policy allows you to overproduce energy with your solar array and bank the excess for later use.
In Missouri, net energy metering is mandated for all electric companies, which means you can utilize the program regardless of where in the state you live. Plus, the state sets the net energy metering rate for each kilowatt-hour (kWh) you generate in excess of what you use. The credit rate offered must at least be equal to the retail rate, which is the best-case scenario.
For example, if you generate 1,000 kWh of solar electricity in July, but only consume 800 kWh, you can use the additional 200 kWh to pay down future electric bills. This helps you offset more of your energy bill, which leads to greater savings over time.
Net energy meeting guidelines in Missouri also prohibit utility companies from charging an access fee to use the program, which is another bit of good news for solar customers like you.
It’s important to note that net energy metering policies are changing in many states, so the above information could be outdated by the time you convert to solar energy. However, there are currently no plans to reduce the net energy metering rate or decrease benefits for Missouri residents.
Net energy metering is another simple incentive to enroll in, and for most property owners, it won’t take any work at all. You can follow the steps below to ensure you opt-in to this incentive.
Net energy metering is an outstanding incentive and has proven to be one of the most valuable perks in the country. Missouri’s net energy metering program is very beneficial for residents, as it’s mandated for all utility providers and credits you for each kWh at the full retail rate.
Without net energy metering, offsetting your electric bill in Missouri would be quite difficult. With the benefits of this program, most residents with appropriately-sized solar arrays should be able to offset a good portion of their utility bills, if not the entirety of them.
Enrolling in net energy metering requires just a quick call to your electric company. It should take just a minute or two to confirm you’re eligible, which can help you maximize your energy savings — an average of $18,292 over the life of your system.
Missouri is also home to a handful of local solar benefit programs, all of which are offered by specific electric companies. We’ll list the more prominent local incentives below. If you’re a customer of any of the below companies, we recommend taking advantage of these benefits.
Above, we’ve listed all of the incentives available to solar customers in Missouri. Some customers, however, may find that some of these perks aren’t worth considering. Some benefit programs take time to apply for and qualify for, and they may not always provide the same benefits as others.
Below, we’ll include a quick list of what we believe are the best incentives in Missouri. In our opinion, these are the perks you should consider, even if you have limited time to apply to incentive programs.
The federal credit is, by far, the most beneficial solar incentive available in Missouri. It provides an average credit of around $8,159 for Missourians, which can effectively bring down the cost of your solar panels by 30%. Best of all, filing for the federal credit takes just a few minutes, so the time investment is well worth it.
Unlike some other incentives, this perk is available to all Missourians, so we can say with confidence that you’ll have access to it.
Net energy metering is usually cited as one of the most beneficial solar incentives in the U.S. It improves the value of your solar system by helping you save more money on your energy bills over time and reducing your panel payback period.
Net energy metering is also easy to take advantage of. For most customers — who have bi-directional meters installed already — simply installing solar will opt them into net energy metering. If you don’t have a two-way meter, a quick call to your electric company should fix that, and at no cost to you.
Finally, if you have limited time to dedicate to applying for solar incentives in Missouri, we recommend you check to see if your electric company offers any rebate programs. You should have a rebate available to you if you’re a customer of one of the following electricity providers:
The rebate amounts range from an average of $2,525 to around $6,750. These are sizable rebates, and they require filling out a simple form. Again, the time you’ll take to apply for these rebates is more than worth it.
Solar renewable energy certificates (SRECs) are credits you can earn for all of the energy your solar panels produce.
In states that have SREC markets, customers can sell their SRECs to utility companies for a profit. Companies buy SRECs in most cases to reach the Renewable Portfolio Standard (RPS) goals imposed upon them by the local Public Utilities Commission (PUC).
Missouri currently doesn’t have an SREC market so these credits are not available to solar customers in the area.
Missouri currently has solar incentives available that can make converting to solar energy more appealing for residents. Aspiring customers might wonder if incentives will change in the future, as this may help you plan the best time to convert to solar energy.
It’s impossible to tell with certainty how incentives are expected to change over time, but in our opinion, the perks available in Missouri are more likely to get worse than they are to improve.
First off, net energy metering policies across the country are changing regularly, and they often change for the worse. Missouri’s current net energy metering program is outstanding, crediting customers at the full retail rate for excess energy. The credit rate could drop to a lower and less appealing rate, however, as is the case in many other states.
It’s also possible that the local rebate programs from individual utility companies will disappear. In many cases, rebates are offered to help a state meet its renewable energy goals.
Missouri had an RPS goal of producing 15% of its electricity from clean energy sources by 2021, but the end date has come and gone and no new goal has been set.5 Some utilities that previously offered rebates — like Ameren Missouri — have already ended those programs.
Finally, the federal credit was recently extended by 10 years and is now set to expire in 2034. The credit rate will drop in 2032, though.
As a trusted source of the solar industry, EcoWatch fields many questions from Missouri homeowners who are interested in lowering the costs of going solar. If you have specific questions that aren’t answered here, reach out to our team of solar experts at solar@ecowatch.com.
The Inflation Reduction Act extended the federal credit to 2034 from 2024. Originally, the federal credit was scheduled to drop from 26% to 22% in 2023 and then no longer be available in 2024. The Inflation Reduction Act extended the credit by 10 years, which is great news for solar customers in Missouri.
Additionally, the legislation is providing increased incentives — in the form of credits to tax bills — for electric vehicles. The credit amount is up to $7,500. It also provides rebates and credits for energy efficiency upgrades, like installing energy-efficient appliances or solar water heaters.
There are currently no concrete plans for Missouri to reduce solar incentives in the next two years. However, as we mentioned above, the net metering program could become less beneficial in the future. We can see the credit rate dropping to an avoided-cost rate or a wholesale rate, especially since the state has no current renewable energy goal.
Missouri currently does not offer a sales tax exemption for PV systems. It’s unlikely that this perk will be added to the state’s available incentives any time soon.
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