Is Solar Worth It in Nevada? (2022 Homeowner's Guide)
Here’s a quick overview of solar viability in Nevada:
- Nevada ranks 6th in the country for solar installations.*
- The average cost of electricity is 11.34 cents per kilowatt-hour.**
- The average solar payback period is 13 years.***
- Homeowners are eligible for a decent net metering policy and the federal solar investment tax credit (ITC),
- The average homeowner saves $18,319 over the lifetime of their solar system.***
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Nevada ranks 6th in the nation for solar conversions and maintains a relatively low cost of solar equipment. However, residents also pay less for electricity than most homeowners in the country, so many Nevadans wonder if solar panels are worth the investment. Solar is a great option for many people in Nevada, but it’s not guaranteed to save you money. Below, you’ll find information on how to determine if solar panels are a good option for your home. We’ll also discuss the many benefits you’ll enjoy when you install solar panels and some additional considerations you should make to ensure your installation process goes smoothly.
How to Figure Out if Solar Panels are Worth It in Nevada
Nevada is a hot spot for solar conversions in the United States, but not every homeowner will benefit from going solar. Below are the metrics you can use to figure out if your home is a good candidate for solar panel installation.
What’s Your Home Electricity Consumption?
The first thing you’ll want to consider is how much electricity your household consumes in an average month. Solar panels save money by providing you with a reduced energy bill, so the more electricity you use, the more potential savings you’ll enjoy. Although there are no hard rules, a general benchmark is that a home should use at least 500 kilowatt-hours in a given month to be eligible for solar savings. The average home in Nevada consumes 973 kWh, which means converting to solar energy will be worthwhile for the large majority of Nevadans, at least from an energy usage standpoint. You can check your past electric bills to see what your average monthly consumption is.
How Much Is It To Go Solar in Nevada?
The price of solar panels in Nevada depends largely on the system size you need, but the equipment averages around $2.52 per watt. At $0.14 per watt less than the national average, solar equipment will be more affordable in Nevada than in most states, and your money will go further than average. Most homes in the area need a 10-kilowatt system, which would total approximately $18,648 after the federal tax credit is applied. Solar panels are more valuable in areas where energy bills are high, which could be attributed to high energy consumption or high electricity rates. Nevada has below-average power prices but above-average energy needs. As such, Nevada is about average for solar conversion when it comes to power bill metrics.
What’s the Payback Period for Solar in Nevada?
Many homeowners don’t realize that most home solar projects pay for themselves over time in energy savings. The amount of time it takes your solar energy system to pay for itself can vary based on many factors, but the average solar panel payback period in Nevada is around 13 years. This is just above the national average of 12 years. Most solar customers in NV will find that their panel payback period falls between 10 and 16 years. If you use a solar calculator or a solar installer’s estimate to check your payback period and your estimate is longer than 16 years, it will take you longer to earn back your investment, and your total ROI will be lower than average.
What Are Average Buy-Back Rates in Nevada?
Many states have enacted a net metering program, which requires utility companies to buy back excess energy produced by your panels. This policy helps reduce your payback period and increase your return on investment. Nevada has a good net metering policy that not only requires an electricity buy-back program but mandates that energy purchased from solar customers at 75% of the retail rate. This is, however, set to decrease over time. The sub-optimal net metering program in Nevada has led mean solar customers to install a battery backup along with their panels. Solar batteries guarantee that you get credited at the full retail rate for whatever you’re able to store, which further improves savings and ROI. Solar storage solutions also provide energy during power outages.
How Much Sun Does Your Roof Receive?
Solar panels utilize sunlight to generate electricity, and you ultimately save money with solar based on how much electricity you produce with your panels. As such, solar panel systems are the most efficient and cost-effective in areas that receive abundant sunlight. Arizona is the best state in the nation for sun availability, receiving an incredible 296 sunny days per year.3 This is well in excess of the national average of 205, making Arizona a great place for solar conversion. However, there are some factors that can make some homes in AZ less appealing for solar panel installation. For example, the direction your roof faces can make a huge difference in panel efficiency, with south-facing roofs being the best and west-facing roofs sometimes being suitable. You will also need to assess your roof for shading during the daytime. Shade from trees or buildings will reduce energy production and make your solar system less valuable overall.
What’s the Outlook on Solar in Arizona?
Arizona currently ranks as the 6th state in the country in terms of solar conversions, so it’s very safe to say that solar power is well-accepted and even favored throughout the state. Residential solar installations are more than 10 times as prevalent in the Silver State than they were a decade ago, and the solar industry shows no signs of slowing down. Utility-scale solar also has a massive foothold throughout Arizona. Solar power systems are so popular in AZ for two primary reasons: the sunshine is the most abundant in the country, and the solar incentives are excellent and quite enticing for homeowners looking to save by switching to solar power.
Benefits of Solar Energy in Nevada
There are quite a few benefits you’ll enjoy when you decide to convert to solar energy, including numerous financial incentives and some environmental upsides. We’ll discuss the most appealing benefits of solar conversion below.
Electricity Bill Savings
As mentioned above, the most substantial savings you’ll enjoy when you convert to solar will be on your electric bills. Solar panels reduce or even eliminate your utility bills and provide you with monthly savings. The average Nevadan spends around $110.36 on electricity every month, which means the maximum potential savings are around $1,324 per year. Over the lifetime of your solar PV equipment, these savings are expected to add up to around $18,319 in Nevada after they pay off the total cost of your system! In addition to these massive savings, you’ll also essentially lock in a lower electricity rate for your system’s 25+ years of performance, which means you’ll be able to avoid future price hikes from your utility company and save even more.
Lower Taxes & Access to Other Incentives
Nevada is considered quite a solar-friendly state, in part because there are quite a few solar incentives afforded to residents by the state and federal governments. One of the most rewarding incentives is the federal solar tax credit, commonly called the ITC. This is a credit to your federal tax liability for the year your system is installed, and it totals a massive 26% of your installation cost. In Nevada, the ITC averages around $6,552 for solar customers. Some additional Nevada solar incentives are listed below:
- Net Metering: Net metering lets you overproduce energy with your panels and sell the excess to your power company to reduce your electric bills. Net metering is mandated in Nevada and currently guarantees a buy-back rate of 75% of the retail rate.
- Nevada Energy (NV Energy) Storage Incentive Program: NV Energy offers incentives to customers who install a solar battery along with their panels, provided they agree to let the utility provider use the stored energy when needed.
- Local Solar Rebate Programs: Some utility companies — like NV Energy and Southwest Gas — provide rebates for solar panel installation to qualifying customers.
Home Resale Value Increase
Homeowners are often surprised to find out just how much solar panels add to their home value. Estimates from Zillow suggest that the average home in the US will jump up by around 4.1% in value.4 This value jump averages out to around $18,266 in Nevada, where the average home value is $445,515.5 This value increase could be even more significant in higher-priced areas, like Las Vegas and Reno. This is one benefit that not all solar customers will get, as it’s only expected from systems that are purchased using cash or a solar loan. The lack of a home value boost is one of the primary downsides of opting for a solar lease or power purchase agreement (PPA).
Clean, Renewable Energy
Of course, not all solar benefits are financial, and converting to clean energy is a great way to reduce your negative impact on the environment. Installing solar panels will reduce your dependency on your utility company and fossil fuels as a whole. You’ll limit your contribution to pollution and reduce your carbon footprint, all while becoming more energy independent and reducing your energy costs.
What to Look Out For When Considering Solar in Nevada
There are still some decisions and considerations to be made after you confirm that your home will benefit from solar panel installation. We’ll explain some other things you’ll need to think about as you move toward installing panels on your property.
The upfront cost of solar panels will be an important factor for any homeowner, even in Nevada, where the total for conversion is well below the average throughout the rest of the country. You can keep your upfront investment down by choosing a solar financing option that doesn’t require a large down payment. You can also opt out of add-on products like solar batteries and electric vehicle chargers and choose a cheap solar panel brand, at the expense of losing efficiency and durability.
The time it takes for your solar panels to pay themselves off is an important factor both for determining your home’s solar viability but also for estimating your overall return on investment. The average solar panel payback period in Nevada is around 13 years, with a standard range of 10 to 16 years. If your payback period is longer than 16 years, your total savings will be lower than the average of $18,319 in your area.
Net Metering Policies in Nevada
Local utility companies are required to offer net metering to solar customers in Nevada, and the minimum rate at which you’re compensated for excess energy is 75% of the retail rate. However, your electricity provider might have a more appealing rate, so you should check with your power company before signing anything. The minimum rate is scheduled to decrease in the future, so coupling your panels with a solar battery can help ensure a better ROI in the long run.
Pending Policies & Changes to Incentives
The solar industry is changing constantly, so the policies and incentives mentioned above are always subject to change or disappear, and new solar rebate programs or incentives could be added. One example of a projected change in Nevada is the net metering policy, which is set to become less appealing over the next few years. You shouldn’t wait around for better incentives to come along, but you should check for updates before you install panels on your home.
Weather & Climate in Nevada
Solar panels work best in areas that receive direct sunlight, which is to say, closer to the equator. Nevada is a good place for solar panels in terms of a southern location in the US. Plus, it’s the sunniest state in the entire country, with residents enjoying nearly 300 days of sun every single year, on average. Cloudy days reduce panel efficiency, but most Arizonans don’t need to be concerned with obstructed sunlight. Arizona also doesn’t experience much extreme weather, so panels will be relatively safe from the threat of damage. The abundant sun and mild climate make Arizona one of the best places in the country for solar panel installation.
Companies Pushing Solar Leases or PPAs
Your final consideration is one of the most important: the solar panel installation company you choose to handle your solar project. Not all companies will provide the same service, and some installers should strictly be avoided because they don’t have your best interests at heart. Companies that advertise “free solar for a year,” for example, are really just pushing solar leases on customers under the guise of lower costs. Solar leases are actually bad, as they don’t let you take advantage of the federal tax credit, they don’t positively affect your home value, and they almost always save much less over time on energy bills. Unfortunately, some companies are even more nefarious and could be out to scam you. ABC 13 Las Vegas has reported on companies posing as genuine installers who are just looking to take your money.6 NV Energy has also warned customers about phone scams that involve sales reps claiming to offer rebates and incentives from NV Energy that don’t really exist.7 It’s important only to work with a vetted and reputable solar installer to ensure you don’t run into scams or other issues.
Wrap Up: Is Solar Worth it in Nevada?
For the large majority of homeowners in Nevada, solar panels will be an excellent and worthwhile investment that ends up saving close to $20,000. However, solar isn’t suitable for every property, so you will need to determine your solar viability before pulling the trigger and installing panels. To do this, you’ll need to assess your average monthly energy bills, your estimated panel payback period, your home’s orientation, financing options, and more. We suggest contacting a reputable and experienced solar company in your area to get help figuring out if solar is right for you.
Frequently Asked Questions
Given the popularity of solar installations in Nevada, we’re not surprised to get questions about the potential of solar panels from Nevadans on a daily basis. Below are some of the questions we see most frequently, along with our responses.
The average solar panel payback period in Nevada is around 13 years, which is just a touch longer than the national average of 12 years. Most homeowners in the Silver State have an estimated payback period between 10 and 16 years. With that being said, your payback period can vary quite a bit based on several factors. Among the most crucial factors to consider is the direction your roof faces, the system size and cost, your monthly energy consumption, the net metering policy offered by your utility company, and more. You can use a solar calculator to get an idea of where your payback period falls, but an experienced solar installer will be able to get a more accurate estimate.
In most cases, yes, solar panels will save you money in Nevada. Installing solar panels provides you with savings on your electricity bills, and these savings gradually accumulate to pay off your installation cost. This is expected to occur in about 13 years in NV. The remaining 12+ years of expected system performance will save an average of $18,319 on your utility bills.
Yes! If you buy your solar panels with cash or a solar loan, they will cause your property value to go up. Solar leases and power purchase agreements (PPAs) will not afford the same benefit. The average property will increase in value by around 4.1%, according to estimates from Zillow. This comes out to an average value bump of $18,266 in Nevada, on average.
Yes, permits are required by your local municipality before you can start installing solar panels or connecting them to the electric grid. Permits will add to your system costs, but they are unavoidable and are in place to keep you and your home safe. Most installers will build the permit charges into the estimated total and then handle the permitting process for you.
You can install your own solar panels in Nevada, but it’s not a great idea. DIY solar panel installation will save you some money on labor, but you’ll also be taking on far more risk of personal injury and property damage. Overall, it’s much better to leave the installation process to experienced professionals.