Is Solar Worth It in Missouri? (2022 Homeowner's Guide)
Here’s a quick overview of solar viability in Missouri:
- Missouri ranks 35th in the country for solar installations.*
- The average cost of electricity is 11.22 cents per kilowatt-hour.**
- The average solar payback period is 13 years.***
- Homeowners are eligible for Property Assessed Clean Energy (PACE) financing and the federal solar investment tax credit (ITC).
- The average homeowner saves $18,292 over the lifetime of their solar system.***
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Missouri ranks 35th in the country in terms of solar conversions, meaning solar energy systems are less prevalent in the state than in most areas throughout the country. Coupled with the fact that electricity costs are below average in the Show-Me State, many homeowners are left wondering if solar is a worthwhile investment at all. Generally speaking, it is, but there are some things you need to consider before you decide if it’s right for your home. Below, you’ll find information on some of the most helpful metrics to determine if your home is suited for solar panels. We’ll also discuss the benefits of converting to solar in Missouri and some important considerations you make before you convert.
How to Figure Out if Solar Panels are Worth It in Missouri
Solar will turn out to be a great investment for most Missouri homeowners, but some residents won’t save any money by converting. Of course, figuring out if solar is right for your home is crucial so as not to spend money needlessly. Below are some metrics you can use to gauge your home’s solar viability.
What’s Your Home Electricity Consumption?
First, you should check your past electric bills for your average monthly energy consumption. A standard benchmark to use when assessing if solar will offset enough energy to make the investment worthwhile is a minimum monthly energy usage of 500 kilowatt-hours. The more electricity you use in a month above this amount, the more you’ll offset with your solar panels and the more money you’ll save in the process. The average Missourian uses an average of 1,028 kWh per month, putting the majority of homeowners well above the cutoff for solar viability. This consumption rate is also well in excess of the national average of 893 kilowatt-hours, meaning solar is more worthwhile in Missouri than in most other states.
How Much Is It To Go Solar in Missouri?
The price of solar panels in Missouri is around $2.59 per watt. With a standard system size requirement of 10.5 kW, the typical total price is $20,124 after the federal tax credit is considered. These numbers are well below the national averages, meaning solar equipment is more affordable in MO than in most of the country. Solar panels provide more value in areas with high electricity rates or above-average energy consumption. Although the going price per kWh in Missouri is a bit below average, the electricity consumption far exceeds the national average. As such, Missouri homeowners stand to save more by going solar than most.
What’s the Payback Period for Solar in Missouri?
Most home solar systems pay themselves off with the energy savings they provide, although the time frame for repayment can vary. The average solar panel payback period in Missouri is 13 years, which is a bit longer than the national average of 12 years. Any payback period between 10 and 16 years in MO is considered normal, but homes that have a shorter period are better suited for solar panels. Provided your payback period is lower than 25 years, your solar panel system is expected to save you money over time. However, payback time frames that are longer than 16 years in the area will lengthen the time it takes you to recuperate your investment and will reduce your return on investment over time.
What Are Average Buy-Back Rates in Missouri?
Most states do what they can to incentivize solar conversions, and the efforts often include mandating net metering, or an electricity buy-back program. Net metering means that solar customers that take part in interconnection can overproduce electricity with their panels and sell the excess back to their power company for a credit to their utility. Missouri mandates net metering for all electric companies, which is outstanding news for residents. The rate at which you’re credited for outgoing kWh can vary, depending on your electric company. You should check with yours before signing anything, and you might need to consider adding a battery to your solar project if you have a less favorable net metering program and want to eliminate your utility bills. Doing so can often bump up your ROI.
How Much Sun Does Your Roof Receive?
Solar panels only produce energy — and therefore save you money — when they receive sunlight, which means the homes that are exposed to more sun will benefit more from solar panel installation. On average, Missouri experiences around 206 sunny days every year, which is just a touch above the national average of 205 days. In a broad sense, this means homes in Missouri are well-suited for solar conversion. With that being said, there are some individual factors you’ll need to use to assess your home for sun exposure. First, you’ll need to determine your roof orientation, as south-facing roofs in the US receive the most sun by far, while only some west-facing roofs are suitable for solar panels. Additionally, you need to check for shading on your property from trees or buildings, especially during peak production hours. Any obstruction will decrease how valuable your solar panels will be.
What’s the Outlook on Solar in Missouri?
Residential solar panels are less prevalent than in most states, but the market for solar equipment has been steadily increasing over the past decade, with 2021 being the best year for new installations statewide. Commercial solar, community solar and utility-scale solar are all finding their foothold in Missouri as well. Solar adoption has been relatively slow in the Show-Me State primarily because wind power and hydropower are both more prevalent in terms of renewable energy sources. The market for clean energy is clearly present, which is, in part, due to the state’s Renewable Portfolio Standard (RPS) goals. As such, it’s expected that the demand for solar electricity systems will continue to grow.
Benefits of Solar Energy in Missouri
There are many benefits you’ll enjoy when switching to solar power in Missouri, including financial and environmental upsides. We’ll discuss the most appealing benefits of going solar below.
Electricity Bill Savings
Most prospective solar customers know that the most significant financial benefit of going solar is the savings they’ll enjoy on their electric bills. The average Missourian spends around $115.35 per month on electricity, meaning there are potential annual savings totaling $1,384. In time, these savings are expected to pay for your solar power system and then save you an additional $18,292 over the lifespan of the photovoltaic equipment. These estimated savings are based on current electricity costs, so if the cost of power continues to rise as it has historically, your total savings and return on investment could be even higher.
Lower Taxes & Access to Other Incentives
The federal and state governments seek to incentivize homeowners to convert to solar energy and other renewable energy sources, so they provide access to some solar incentives. One of the most substantial incentives is the federal solar tax credit (ITC) from the federal government. The ITC is a credit to your federal income tax liability for the year your system is installed, and it totals 26% of your installation cost. In Missouri, the ITC averages around $7,071. Some additional solar incentives offered in Missouri are listed below:
- Utility Solar Rebate Programs: Although there is no state solar incentive, some of the larger utility companies in Missouri — including Columbia Water & Light, Kansas City Power & Light and Liberty Utilities — offer rebate programs for solar PV installations.
- Show Me Property Assessed Clean Energy (PACE) Program: The PACE program aims to make solar more accessible and affordable by providing access to low-APR and low- or no-down-payment solar loans for Missouri residents.
- Net Metering: As mentioned above, Missouri mandates net metering and requires that all utility companies buy back excess energy from solar customers. You’ll get a credit on your energy bills or cash, depending on your solar company and how much power you overproduce.
- Solar Property Tax Exemption: Normally, home improvements that bump up your property value also cause your property taxes to go up. This property tax exemption prevents this from happening in Missouri when you install solar panels.
Home Resale Value Increase
Another massive benefit to going solar is that the panels will add instant value to your home. According to Zillow, homeowners who install solar arrays can expect their property value to jump by around 4.1%.3 For most residents in Missouri, where the average home value is $217,345, most solar customers will see a boost to the value by approximately $8,911.4 It should be noted that this is only expected if you use solar financing or cash to acquire your solar panels. A major downside of opting into a solar lease or power purchase agreement (PPA) is that your property value won’t be positively affected.
Clean, Renewable Energy
Finally, Missouri homeowners who are concerned with their impact on the environment will find some significant benefits even beyond the financial ones mentioned above. Going solar leaves you less dependent on your electric company and fossil fuels. As a result, you’ll reduce your contribution to global warming and pollution. Your newfound energy independence will also let you avoid energy rate increases, which are expected in the future.
What to Look Out For When Considering Solar in Missouri
Deciding that solar panels are a good investment for your home is an important step to take in your solar conversion process, but there are many additional things to think about. We’ll discuss some additional considerations you should make below.
The upfront cost of solar panels will be a crucial factor for all homeowners, even in Missouri, where the average cost of solar PV equipment is below average. You can keep your upfront outlay of money to a minimum by choosing cheap solar panels, avoiding add-on products like solar batteries and electric vehicle chargers, and securing solar financing that requires a nominal down payment or none at all.
Your solar panel payback period is a crucial metric for determining how suitable a solar panel system is for your home, but it can also help you figure out your return on investment. Most Missourians have an estimated payback period of between 10 and 16 years. If yours is estimated to be longer than 16 years, your overall ROI will be lower than average, and it will take you longer to make back your investment.
Net Metering Policies in Missouri
Net metering is mandated in Missouri, but utility companies can set their buy-back rates individually, and many choose to offer an avoided-cost rate. This is below the retail rate, which is less appealing. However, some companies provide more enticing net metering rates, so you should check with your provider before you sign anything. If you have a lower net metering rate, you will very likely need to pay extra for a solar battery to eliminate your electric bills and maximize your long-term savings.
Pending Policies & Changes to Incentives
The solar industry continues to grow and improve throughout the country, and the potential for expansion is highest in areas like Missouri, where solar adoption has been slower than average. The policies, incentives and rebate programs discussed above are subject to disappear and improve, and others could pop up at any time. It’s not financially wise to wait for better incentives to come along, but you should check for new ones or changes before you commit.
Weather & Climate in Missouri
Solar panels work best in areas with abundant and direct sunlight, meaning states closer to the equator are best-suited for solar conversion. Missouri is, therefore, one of the best places in the country for solar panel installation. The state as a whole receives just over the average sunny days per year, which is great news for solar customers whose panels’ efficiency plummets on cloudy days. Many residents worry about the extreme weather that is prevalent in the Show-Me State, with tornadoes being of particular concern. Strong winds and tornadoes can put your equipment at risk of damage, but you can mitigate the negative impact of Missouri’s intense weather by choosing a solar installer that provides a good warranty.
Companies Pushing Solar Leases or PPAs
Finally, you should put some thought into the solar panel installation company you choose to handle your home solar project. Companies that advertise “free solar for life” might seem appealing, but these offers are really just marketing ploys to get you to sign a solar lease. Leases are a bad way to go, as they don’t increase your home value, don’t let you take the ITC, and provide far fewer savings — if any — overtime. Unfortunately, local news stations like FOX4KC have warned residents about disingenuous solar installers who over-promise and under-deliver, often making unrealistic claims of savings and solar benefits.5 There have even been nefarious installers in Missouri whose shady business practices have escalated to FBI investigation.6 You should be very careful only to work with reputable, vetted solar installers to avoid getting scammed.
Wrap Up: Is Solar Worth it in Missouri?
For most Missouri residents, solar panels are an excellent investment that provides enormous savings and a number of financial benefits. However, solar panels aren’t right for everyone, so you need to assess your home’s solar viability before you decide to go solar or not. Some things to consider to determine if your home is a good candidate for solar panels include your monthly energy bills, your estimated solar panel payback period, the direction your roof faces, shading on your property and more. We recommend contacting a reputable solar installer to help you calculate if a solar panel system will be beneficial for your home.
Frequently Asked Questions
At EcoWatch, we’re thrilled to get questions about the potential of solar power, especially from residents of states like Missouri, where adoption is still on the rise. Below are some of the questions we see most frequently from homeowners in your area, along with our responses.
The average solar panel payback period in Missouri is around 13 years, which is just a bit longer than the national average of 12 years. Most residents will find their panels paying themselves off in between 10 and 16 years. However, there are many factors that can affect your payback period, including your system costs, your energy costs, how much power you consume monthly, and more. You should use a solar calculator to estimate your payback period or, for a more accurate estimate, contact a reputable solar installer to estimate it for you.
Most of the time, yes. Solar panels reduce your energy bills, and if you have an above-average net metering policy or couple your solar panels with a solar battery in Missouri, you can eliminate your energy bills entirely. With the average homeowner in the state paying around $115.35 per month for electricity, the potential yearly savings total $1,384. After your system pays for itself, it could save you an additional $18,292 over the lifespan of the equipment.
Yes! Installing solar panels will make your home more valuable as long as you use a cash purchase or solar loan to acquire your equipment. Solar leases and power purchase agreements (PPAs) will not boost your home value. According to estimates from Zillow, solar panels make home about 4.1% more valuable, meaning the average Missourian will experience a bump in home value of around $8,911.
Yes, permits are required for major home alterations in Missouri, including installing solar panels and connecting the system to the grid. In most cases, your solar panel installation company will tackle the permitting process for you.
You can install your own solar panels in Missouri, but the process is quite complicated, and it’s generally not a great idea. It’s true that you do stand to save some money on the labor costs you’d pay for professional installation. However, you’ll be putting yourself at risk of injury and your home and photovoltaic equipment at risk of severe damage. We recommend against DIY solar panel installation and deferring to a reputable solar company instead.