Is Solar Worth It in Mississippi? (2022 Homeowner's Guide)
Here’s a quick overview of solar viability in Mississippi:
- Mississippi ranks 36th in the country for solar installations*
- The average cost of electricity is 11.17 cents per kilowatt-hour (kWh)**
- The average solar payback period is 13 years***
- Homeowners are eligible for net metering and the federal solar investment tax credit (ITC).
- The average homeowner saves $20,147 over the lifetime of their solar system***
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Mississippi ranks 36th in the country for solar installations, and residents enjoy an average cost of electricity that is below the national average. As such, many Mississippi homeowners wonder if the large investment to install solar panels is a worthwhile endeavor. Generally speaking, solar is a great option for most homeowners in the Magnolia State, although it’s not ideal for every home. Below, you’ll find an in-depth guide on how to decide if solar panels are right for your home. We’ll also go into the many benefits you’ll enjoy when you go solar and some things you should consider before converting to clean energy.
How to Figure Out if Solar Panels are Worth It in Mississippi
While most Mississippi residents will find that solar conversion ultimately saves them a significant amount of money, not every property is suited for solar panels. Below, we’ll get into some crucial metrics that you can use to determine if solar is a good option for your home.
What’s Your Home Electricity Consumption?
First, you should consider your energy consumption. Solar panels are generally considered worth it if they’re used to offset a monthly consumption of at least 500 kWh. The more energy you consume each month, the more your panels will save and the more worthwhile they’ll be, but 500 kWh is a common benchmark for solar viability. The average homeowner in Mississippi uses around 1,146 kWh, which is well above this benchmark. As such, solar panels will be worth it from an energy consumption perspective for the majority of Mississippians. Local energy needs are also well above the national average of 893 kWh. Mississippi ranks third in terms of energy needs in the nation, so solar will be more valuable there than almost all other states.
How Much Is It To Go Solar in Mississippi?
The price for solar panel systems in Mississippi is typically a per-watt price, which averages around $2.64 per watt. This is just below the national average of $2.66. An average system size requirement in MS of 11.5 kilowatts means a typical total of approximately $22,466 after the federal tax credit is considered. Solar panels are more valuable in areas where electricity rates or energy needs are high. While the price for electricity is lower in Mississippi than in the rest of the country, the well-above-average energy consumption means that solar panels have more potential to save money in Mississippi than in most of the nation.
What’s the Payback Period for Solar in Mississippi?
While the cost of solar panels is high, most residential systems pay for themselves in the energy savings they provide each month. The time it takes for your energy savings to overcome the cost of the system is called the solar panel payback period. The average timeline for repayment in Mississippi is 13 years, with a typical range of 10 to 16 years. These numbers are just above the national average of 12 years and a standard range of 9 to 15 years. Most homeowners have a professional solar installer estimate their payback period for them, but you can also use a slightly less reliable solar calculator. If your estimated payback period is longer than 16 years, it will take you longer than normal to offset the cost of your system, and your total return on investment (ROI) will be lower.
What Are Average Buy-Back Rates in Mississippi?
Most states now mandate an electricity buy-back policy or a net metering program. These options allow you to send excess energy production to the grid via your inverters in exchange for a credit to your energy bills for incoming electricity. Mississippi does allow interconnection and mandates net metering, but not for the electric cooperatives that dominate the area. Some coops do privately offer net metering, but your policy will be highly dependent on your utility provider. If your net metering policy is non-existent or your buy-back rates are below the retail rate for electricity, you might need to consider installing a solar battery. These will help you offset electricity costs by storing your overproduction for a 1:1 return, making your panels more valuable in the long run.
How Much Sun Does Your Roof Receive?
Solar panels are only as valuable as the sunlight they receive, so properties with roofs that are ideal for sun exposure will naturally benefit more from going solar. Mississippi as a whole is a great place for abundant sunlight, as the state receives 216 sunny days per year, which is above the national average of 205. That means that, in terms of sun availability, Mississippi is better for solar than most states. However, you need to assess your individual property as well, specifically for shading and the direction your roof faces. Shading during peak energy generation hours from trees, buildings or other obstructions will significantly limit your production potential as well as your savings, so an unshaded roof is your best option. Additionally, roofs that face south and west in the US receive the most sun, and north- and east-facing roofs might not be suitable for solar panels.
What’s the Outlook on Solar in Mississippi?
Solar is one of the only viable renewable energy sources in Mississippi, but its adoption has been slower than in most other states. This is primarily due to a lack of incentives available, as the state is still focused on providing incentives to gas and oil companies. As the nation as a whole moves away from its dependence on fossil fuels, we expect to see the solar market in Mississippi to pick up. In fact, solar adoption is becoming more popular in the Magnolia State. While utility-scale solar soared in popularity in 2017 and became the primary source of solar installations in the area, residential conversions have slowly been growing in popularity as well.
Benefits of Solar Energy in Mississippi
Converting to solar power in Mississippi might be costly, but it brings along with it a slew of benefits for adopting clean energy. We’ll discuss why solar is so appealing in Mississippi below.
Electricity Bill Savings
The primary financial benefit of installing solar panels in Mississippi is that they offset or eliminate your energy bills. Mississippi homeowners consume more electricity than residents in nearly every other state, so electric bills are quite high. The real value of solar is the monthly savings you’ll enjoy on your utility bills. After the average solar power system in MS pays for itself in savings, it typically provides additional energy savings amounting to an impressive $20,147! In fact, your total savings could be even higher, as this is based on current electricity rates. Energy costs are expected to rise in the future, meaning you’ll save even more monthly, shortening your payback period and increasing your ROI.
Lower Taxes & Access to Other Incentives
Although Mississippi isn’t the most solar-friendly state, there are some incentives available that can make converting more appealing and more worthwhile. Most important is the federal solar investment tax credit (ITC), which is offered by the federal government. The ITC is a credit to your income taxes for 26% of your total cost to go solar, or an average of $7,894 in Mississippi. Some additional Mississippi solar incentives are explained briefly below:
- Net Metering: As mentioned above, Mississippi mandates net metering for all public utility companies and investor-owned utilities (IOUs). Electric coops don’t have to offer it, but many do. Net metering helps you bump up your ROI and shorten your panel repayment by providing more savings on your electric bills.
- Mississippi Clean Energy Initiative: The Clean Energy Initiative is set up to entice solar manufacturers to relocate to Mississippi with tax incentives. While this doesn’t directly benefit homeowners, it does in the long run by reducing the cost of solar panels in the area and increasing accessibility overall.
- Local Energy Efficiency Rebates & Incentives: Although Mississippi lacks a state tax incentive, there are some rebate programs for energy-efficiency upgrades that you can use to improve the value of your solar panels overall.
Home Resale Value Increase
A substantial benefit to going solar that many solar customers fail to consider is that solar panels increase home value. Estimates from Zillow suggest that most homes go up in value by an average of 4.1% when a solar energy system is installed. In Mississippi, where the typical home is worth $157,849, most homeowners will see a spike in value of around $6,472. Your home value is only expected to go up if you use a solar loan or cash purchase to acquire your panels. Solar leases and power purchase agreements (PPAs) are far less beneficial, in part because they don’t increase your property value.
Clean, Renewable Energy
Some Mississippi homeowners will be more concerned with their impact on the environment than about their financial savings, and going solar is a great way to stay eco-friendly. Ultimately, you’ll reduce your dependence on fossil fuels, you’ll contribute less to pollution and global warming and you’ll increase your energy independence. You’ll rely on your power company less, which means you can also avoid rate hikes in the future.
What to Look Out For When Considering Solar in Mississippi
If you’ve determined that your home is a good candidate for solar, you’ve made an enormous step toward financial savings and taking advantage of numerous benefits. Still, there are some additional things to consider before you convert to this renewable energy source. We’ll discuss some important considerations below.
Solar panels are expensive, even in areas like Mississippi, where the average cost for solar equipment is lower than the national average. You will need to ensure your upfront investment fits into your budget, and you might have to take some measures to reduce your initial payment. Some things you can do include choosing a solar financing option that requires a small down payment or none at all, avoiding add-on products like solar batteries that bump up your installation costs and choosing a cheaper solar panel brand at the expense of efficiency.
Your estimated solar panel payback period is great for determining your solar panel viability, but it can also help you budget and estimate your total ROI. If your payback period is longer than what’s typical in Mississippi — between 10 and 16 years — your ROI will be lower than average. Once your solar panel system is paid off, you can count on the additional monthly savings each month, which can help with financial planning.
Net Metering Policies in Mississippi
Net metering is mandated by the Public Service Commission, but only for public and investor-owned utilities. Customers of electric cooperatives might have access to net metering privately, depending on the provider. A solar battery might be necessary for your home solar project if you don’t have a good net metering policy, as this will allow you to store excess production and use it to offset kilowatt-hours on a one-to-one basis. Solar batteries will increase your installation costs but are often worth it in Mississippi, where electricity usage is abnormally high.
Pending Policies & Changes to Incentives
All of the solar policies and incentives discussed above are subject to change as the solar industry expands and improves throughout the country. Changes to state incentives are even more likely in areas like Mississippi, where adoption has been relatively slow thus far. Incentives and rebate programs could disappear, new ones could pop up and changes could be made without notice. It’s not usually a good idea to wait around for better incentives to come along, but it is wise to check for updates to incentives and policies before you commit to going solar.
Weather & Climate in Mississippi
Solar panels are most efficient and provide the most savings in areas with intense and abundant sunlight, which means states closer to the equator will benefit more from solar panels. Mississippi is one of the southern-most states, making it generally a great place for solar conversion. Some homeowners worry that the frequent cloudy weather will reduce panel efficiency. While cloudy days can mean up to a 90% reduction in production, the state receives more than the national average of sunny days per year, meaning it’s still a good place for solar panels. Others are concerned about the excessive rainfall and the risk of extreme weather. The rain will serve to keep your panels clean, thereby increasing overall efficiency. Extreme weather can put your equipment at risk of damage, but choosing an installer that provides a good warranty should provide some peace of mind.
Companies Pushing Solar Leases or PPAs
Finally, you should be very careful which solar company you choose to tackle your solar project. Some solar companies will overstate savings and even push less appealing purchase options like solar leases. Often, these installers advertise “free panels,” but the leases they’re really selling you on don’t increase your home value, don’t let you take the federal solar tax credit and take far longer to pay off, providing much fewer savings in the long run. The State of Mississippi started warning residents about local solar companies that don’t provide the savings and benefits they claim when trying to make the sale.5 There have also been statewide reports of automated call systems put in place for local solar companies to gather potential customer information to sell or use for their own advantage by applying high-pressure sales tactics.6 To protect yourself and your property from solar scams, it’s crucial that you only ever work with a reputable and vetted solar installer.
Wrap Up: Is Solar Worth it in Mississippi?
With its high energy needs and a cost of solar equipment that’s lower than the national average, Mississippi is a great place for most residents to install solar. However, solar panels aren’t right for everyone, and determining if they will actually save you money is a crucial step to take before committing to this clean energy source. Some things you’ll want to consider when you’re determining if solar is right for you include the direction your roof faces, your average monthly electric bills, your estimated solar panel payback period, and more. We suggest reaching out to a reliable solar installer in your area to discuss if solar is right for you.
Frequently Asked Questions
The EcoWatch team gets lots of questions from Mississippi homeowners about how valuable solar is in the area. Below are some of the questions we see most often, along with our responses.
The answer to this question will be different for every homeowner, as the solar panel payback period is based on your monthly energy needs, your total installation cost, the size of the system you need, and much more. With that being said, the average payback period in Mississippi is around 13 years, but any time between 10 and 16 years is considered normal. Provided your payback period is under 25 years, you’ll still ultimately save money, but the lower your estimated time frame is, the higher your ROI will be.
In most cases, yes. While installing a solar panel system is costly, it will provide you with monthly energy savings that add up over the lifespan of the equipment. On average, the savings will pay off the panels within 13 years, after which the 12+ years of expected energy production will provide an additional $20,147 worth of energy savings.
Yes! As long as you purchase your panels with cash or a solar loan, your property value will increase as a result of the installation. Solar panels bump up home value by an average of 4.1%, according to estimates from Zillow, which means the typical property owner in Mississippi will see an increase of approximately $6,472.
Yes, permits are a requirement for solar panel installation in Mississippi, as they help ensure connection to the electrical grid is made correctly and that your home can structurally support the weight of the photovoltaic equipment. Most solar installers will include the cost of permits in the total installation cost and will handle the actual permitting for you.
You can opt to install your own solar panels in Mississippi, but the savings are typically fairly limited, and you put your home, your roof, and your solar photovoltaic system at a much higher risk of damage. We strongly recommend letting an experienced solar panel installation company tackle the installation for you.