Mississippi Solar Rebates and Incentives

How Much Can You Save on Solar in Mississippi?

Key Details

• Federal Solar Tax Credit offers Mississippi taxpayers a 30% tax credit to offset the cost of installing and purchasing solar energy systems.
• Mississippi Clean Energy Initiative offers state income and franchise tax exemptions for companies that manufacture renewable energy equipment.
• Entergy Efficiency Program provides residences and commercial establishments with rebates on energy saving appliances.
• Mississippi Development Authority Energy Efficiency Revolving Loan Program offers low-interest loans for energy efficiency projects.

Mississippi Energy Profile

In 2022, Mississippi generated 437 Megawatts of solar energy for the state across 813 installations. Enough to power approximately 46,210 homes.

Solar energy projections for the state are positive. With a planned investment of about $475 million dollars, the state is set to leap to number 18 on the rank of solar energy usage in the United States by 2030. In this period, the state is projected to increase its solar capacity to generate about 2900 megawatts of solar electricity.

renewable energy rebates, credits, and incentives:

How Affordable is Solar Energy in Mississippi?

In 2022, electricity in Mississippi currently costs 9.50 cents per Kilowatt hour, average relative to the general cost in the United state. Solar panels, on the other hand, cost an average of $2.60 dollars per watt.

As of 2023, a 6kw solar panel costs $15,840 in Mississippi, without the Federal solar tax credit. With the Federal tax credit, solar panels cost $1.841 per watt in Mississippi. By this value, a 6kw solar panel costs $11,046. Homeowners can save** $4,794 on a 6kw** Solar energy system with the solar tax credit.

Renewable Energy in Mississippi

With renewable energy only representing 3%, Mississippi consumes four times its energy generating capacity. The major sources of renewable energy in the state include biomass, solar, and wind. Biomass accounts for 75% of Mississpi’s renewable energy.

Overall, the state was estimated to generate 72% of its total energy from Natural gas. Mississippi does not have any hydroelectric power plants for public utility. The state does have wind resources in the Northwest extremities. However, these wind resources are not utility-scale yet. They, therefore, contribute no significant portion to the state’s renewable energy portfolio.

Since the commissioning of the first utility-scale solar power facility in 2017, the State has witnessed significant development in its solar energy portfolio.

As of 2021, solar energy represents about 25% of the state’s renewable energy generating capacity and 0.6% of the total energy. More recent estimates suggest that solar energy accounts for 0.78% of the state’s total energy.

As of 2023, the state has no renewable energy portfolio standard.

Mississippi Household Profile

As of 2020, Mississippi was estimated to consume a total of 350 million British Thermal units of energy per capita across all sectors. For residences, the energy consumption per unit head was estimated to be 60.8 million British Thermal units in a single year.

For commercial establishments, on the other hand, the energy consumption per capita was approximated at 47.2 million British Thermal Units.

The consumption and self-generation of renewable energy in Mississippi improved significantly, partly due to the solar energy incentives and rebates.

Federal Solar Tax Credit in Mississippi

The Federal Solar Tax Credit is an Investment Tax credit introduced as part of the US Energy Policy Act. With the Federal Solar Tax Credit, solar energy systems installed from 2022 to 2032 are eligible for a 30% tax credit. However, after 2032, it decreases to 26% in 2033 and 22% in 2034.

With the tax credit, taxpayers in Mississippi can purchase and install solar energy systems at lower cost. It's designed to reduce the energy burden on commercial establishments and industries.

According to the Department of Energy, the solar tax credit covers the following costs:

• The Permit Fee, the cost of inspection, and regulatory compliance.
• The cost of purchasing equipment. This includes wiring, mounting equipment, inverters, batteries, and the tools necessary to get the energy system functioning.
• The cost of labor. The solar tax credit covers the cost of onsite solar preparation, offsite assembling, and coupling. It also covers the cost of installation as charged by the contractor.
• The cost of solar batteries.
• The sale taxes for eligible expenses.

In the bid to encourage solar energy adoption, the United States established the Federal solar tax credit scheme in 2005. The Scheme was introduced as the Investment Tax credit as part of the energy policy act.

Originally, Taxpayers who had their solar energy system installed between 2005 and 2007 were entitled to a 30% tax credit. Over the years, the policy has undergone different adjustments according to the prevalent energy reality in the country.

The most recent adjustment was made in 2022 by the United States Department of Energy. With this new adjustment, the new deadline for the solar tax credit is 2034.

With the new adjustments to the federal solar tax credit and other renewable energy incentive programs, poor and low-income families can offset part of the cost of solar energy installation. The solar tax credit is paid against the Federal income tax and can accumulate for up to four years. Finally, there are no maximum or minimum amounts to claim.

Eligibility

To be eligible for the Federal Solar Tax credit in Mississippi, you must meet the following criteria:

• Be a Taxpayer: The solar incentive is awarded as a tax credit against the federal tax income. As a result, only tax-paying citizens are eligible for the credit. Most importantly, taxpayers must possess enough tax liability. Otherwise, you can accumulate tax credit for four years, after which it no longer counts.
• Own a Solar Energy System: Rented or leased-out solar energy systems are not eligible for the Solar tax credit. The renewable energy tax credit is only available to legal owners of the energy systems regardless of the means of ownership.
• Own the Right Type of Energy System: The Tax credit is only available to energy systems that convert solar power to electricity. Pool heaters, bathing systems, and similar appliances may, therefore, not qualify for the credit.
• Install your System before the Deadline: According to the updated legislation, solar energy systems installed after 2034 do not qualify. Put in mind the system must be installed and operational before it is eligible for the Federal Solar Tax Credit.
• Meet the Minimum Safety and Regulatory Requirements: Your Solar energy system must be certified by the relevant regulatory bodies. It is especially important that you get local permits for safety before you install your solar energy system. Unsafe solar panels are not eligible for the Federal Solar tax credit or any renewable energy incentive whatsoever.

How do I claim the Federal Solar Tax Credit in Mississippi?

As a taxpayer in Mississippi, here are the steps to claiming the Federal solar tax Credit:

Step 1. Confirm your Eligibility: Before you apply, it is necessary that you check your system and tax conditions against the criteria above. Also, depending on the conditions of your application, you may need to have good tax and credit information.

Step 2. Gather the Necessary documentation: You need documents that register your ownership of the solar energy system. You also need documents that indicate the costs associated with installation and purchase. Essentially, you need receipts and invoices, and tax documents to verify the amount you are eligible for.

Step 3. Obtain and Fill out the IRS 5695 form: This form is also known as the residential energy credits assessment form. You need to request the form from the tax assessor’s office and fill out the necessary details as it applies to you. The form is important to collate your tax and energy information and estimate the amount you are eligible for.

Step 4. Request and Fill out the IRS 1040 form: The primary tax form can be obtained from the tax assessor’s office. This form is necessary to gather your information and estimate your income tax return.

Step 5. Submit the Forms and documents: After filling out the appropriate forms, gather all documents and submit them to the tax assessor’s office. If you have doubts about your taxes, you may need to contact an accountant.

Net Energy Metering in Mississippi

With the Net Energy Metering program, energy consumers are credited for any excess energy they generate and send back to the grid for redistribution. Net Metering Energy was introduced in Mississippi in 2016. According to state laws, it is only mandatory for Investor Owned Utility companies, including the Tennessee Valley Authority.

According to the legislation, the utility companies credit the consumers at the wholesale cost rate for every Kilowatt of energy they send back to the distribution grid. There is an additional premium credit of 2.5 cents per Kilowatts hour. The total credit rate, however, does not add up to the retail rate.

The credit gotten for excess energy generation can accumulate from month to month. However, after the annual billing cycle, the credit expires. Aside from the mandated companies, some utilities in Mississippi offer Net energy metering on their own accord. However, the credit condition and the limits are determined by these utilities.

After approval, the utility system is mandated to fix a bidirectional meter for the consumer with two channels. Each of the Channels records different credit types. The excess generation clause stipulates that consumers are credited at the full retail rate for self-generated electricity on the second channel of the meter.

Also, all the power that the consumer does not use is stored on the second channel and converted to credit. However, this credit does not directly offset the electricity bill of the consumer.

Eligibility

To be eligible for Net Energy Metering under the Mississippi State laws, you must meet the following criteria:

• Utility Company: To qualify, you must be under an Investor-owned utility. The legislation also mandates the Tennessee Valley Authority to operate a Net Energy Metering program. You can also apply for net energy metering if your utility company independently offers the program.
• System Capacity Limit: To apply for Net energy metering in Mississippi, the legislation stipulates a system capacity limit that’s less than 20 Kilowatts for residences. For non-residential establishments, the maximum eligible generating capacity is 2 Megawatts.
• Aggregate Capacity Limit: To be eligible, your energy system must amount to 3% of the total system peak in the year prior. Regardless of its operational capacity, any system that generates less may be disqualified.
• Location Criteria: You must be a tax-paying resident, business, or commercial establishment in the State of Mississippi to apply.

While your application may be rejected on any of the above basis, the state laws mandate that the utilities seek approval before they reject any application.

How to Enroll for Net Energy metering in Mississippi

To enroll for Net Metering in Mississippi, you should follow the following steps:

Step 1. Check If you are Eligible: You must confirm which utility company your house operates under and whether they offer Net Energy Metering. You should also check against the eligibility criteria above to confirm if you can apply. Finally, your system must meet the minimum safety requirements for operations.

Step 2. Apply for Interconnection: You may need to apply for interconnection depending on the utility company involved. Ideally, the utility company should guide you through or even take care of interconnection. In some cases, however, you may need to apply for an interconnection first before requesting net metering.

Step 3. Apply for Net Energy Metering: You will be required to fill in different relevant pieces of information, depending on the company you operate under. Usually, the company requests information about the type, size, and capacity of your solar energy system.

Step 4. Install a Bidirectional Meter: Also, depending on the company you operate under, you may have had yours fixed during interconnection. Sometimes, you have to apply for it after your Net Energy Metering application has been approved. The utility company always handles this installation, so rest assured.

Mississippi Property Tax Exemption

Mississippi passed property tax exemption legislation for solar installations in 2021. Miss. Code Ann. Section 27-31-46 stipulates that renewable energy projects are eligible for a 50% tax exemption of the value of the project at fair market value.

However, this exemption is only limited to projects that have a minimum capital investment of $100 million. The legislation was amended in 2022, and the scope of the exemption was adjusted.

Prior to this, in 1989, the State created a similar tax incentive under Miss. Code Ann. Section 27-31-104. The incentive allows renewable energy projects an abatement that amounts to two-thirds of their annual payable tax for ten years. Eligible projects were also required to have a minimum investment of $100 million. This requirement in the Fee-in-Lieu legislation has been amended several times, including as recently as 2022.

Renewable energy projects can now combine the Fee-in-Lieu with the 50% property tax exemption scheme. This way, large-scale renewable energy projects are executed with as little cost in tax as possible until they are commercially viable.

Mississippi Development Authority Energy Efficiency Revolving Loan Program

Under the Miss. Code § 57-39-39, the Mississippi Development Authority offers loans to commercial establishments for energy efficiency projects. The legislation was enacted in 1989. Despite the extended period, the loan is still open and supported with a revolving fund of $ 7 million from the Federal oil overcharge fund.

The Available loans range from as low as $15,000 to $50,000 with a 10-year repayment period. The interest rate is capped at 2% below the prime rate. The scope of this loan covers all energy-efficient appliances, from retrofits to cooling systems, heat pumps, and even Window and Door Ventilators.

To apply, your establishment has to send a loan request to the Mississippi Development Authority. The application can be assessed on the Authority’s website.

To be eligible, the commercial establishment must be creditworthy. Organizations with questionable financial reputations are not eligible for the loan. The Authority would request a document of creditworthiness from a reputable financial institution. Also, the projects are assessed by the Development Authority, and the loan is awarded on the basis of the project’s relevance. Additionally, it is important that the energy system is certified safe by the relevant regulatory agencies. Lastly, the establishment must operate under a utility company within Mississippi.

Mississippi Property-Assessed Clean Energy (PACE) Financing

Mississippi does not have a Property assessed clean energy finance program in place. The closest thing to an appliance-specific Mississippi renewable energy rebate in the state is the Entergy renewable energy efficiency program.

State Sales Tax Exemptions in Mississippi

Mississippi does not have a sales tax exemption scheme for renewable energy. Instead, it has several other rebates and incentives to encourage a switch to solar energy in the State. Many of these rebates and the conditions for their eligibility have been discussed earlier in this article. Homeowners in Mississippi can do well to read them and take advantage of as many as possible.

State Profile

Mississippi lies in the southwest region of the United States. It is the 35th most populous State in the US. By size, it is the 32nd largest. As of 2022, the State is estimated to have a population of 2.9 million people. Lastly, Mississippi ranks 50th by per capita income in the United States.