How Much Can You Save on Solar in Missouri?
Missouri receives an average of 2,690 hours of sunlight annually. The Show-Me state has a thriving solar industry due to the large number of industrial and small-scale solar installations.
According to the SEIA Report, as of 2021, the state has up to 472 megawatts of solar installations, enough to power over 48,028 homes in Missouri.
Missouri is projected to produce up to 1,607 MW of solar energy by 2028. It aims to achieve this growth via favorable solar energy incentives for commercial and residential solar users.
Homes in Missouri may receive power from small-scale residential solar panels or from industrial solar farms. Some of the top solar farms in Missouri include:
Missouri Solar Tax and Incentives at a Glance
|Missouri Solar Incentives||State or Federal||Program Overview|
|Federal solar tax credit||Federal||The federal solar tax credit reduces the cost of solar installation by 30 percent.
Beneficiaries will receive the incentive in the form of a tax credit.
To receive the incentive, you must file Form 5695 alongside your income tax.
This is a one-time offer.
|Net Metering||State||Beneficiaries of this program will get paid for sending excess solar power to an investor-owned electric utility company.
The utility company pays for the energy in the form of credits, which are stored on a net meter.
Sometimes, users may opt to sell off excess energy for cash. The utility company will buy the credits at the wholesale rate.
This is a continuous solar incentive.
|Solar Property Tax Exemption||State||Under this program, people who install PV systems don't have to pay property tax on them.
The Missouri solar property tax exemption only applies to commercial solar users.
The offer varies, depending on the value of the property and the cost of the PV system.
|Show Me Property-Assessed Clean Energy (PACE) Financing||State||A low-cost loan to ease the financing of renewable energy installations.
It has a fixed interest rate.
Furthermore, beneficiaries can increase the repayment period up to 20 years
How Affordable is Solar Energy in Missouri?
The retail cost of grid electricity in Missouri is 9.85 cents per kilowatt-hour. In comparison, it costs an average of $2.7 per watt to install a solar panel.
However, the installation cost will greatly reduce when the user applies for various renewable energy incentives in Missouri. Applying the federal solar tax credit will drive down the cost to $1.89 per watt.
|State||Number of solar Installations||MW Installed||Average cost for grid power (2021)||Average cost per watts|
|Missouri||28||472 MW||$0.98 per kWh||$2.7 per watt.|
Thanks to the above-average sunlight hours, a 6 kWh panel in Missouri can generate between 8,000 and 10,000 kWh annually. For this reason, solar companies in Missouri will often recommend a 6 kWh solar panel for an average-sized household.
As of 2023, it will cost $16,200 to install a 6 KWh solar panel in Missouri. Keep in mind that this figure may fluctuate due to factors like the solar installer's cost, the type of solar panels, and the mount type.
Irrespective of the cost, solar users can utilize incentives like the Federal Solar Tax Credit to lower the price. This incentive will refund 30 percent of the cost of solar installation. So, you get to save $4,860 via this scheme. In addition, you can further reduce the cost through local rebates in Missouri.
Note: The 30% solar tax credit for renewable energy only works for solar systems that are installed between 2022 and 2032. Users will get a 22 percent tax credit for PV systems installed in 2021.
|State||Cost of installing a 6kw system||Federal tax credit value 2023 (30%)|
The federal solar tax credit, or the solar investment tax credit, is an incentive for users of renewable energy. Those eligible for this incentive will receive a discount off the cost of solar installation in the form of tax credits when they file their annual income tax.
The act created a new set of rate schedules for each phase of the program.
The Missouri solar panel tax credit will cover all solar equipment under these categories:
Missouri residents can claim the federal solar tax credit if they meet these criteria:
Missouri residents can claim the federal solar tax credit by following these steps.
Step 1: Start by gathering the necessary documents. This includes downloading IRS Form 1040, Form 5695, and invoices from solar manufacturers and installers. The Form 5695 is for claiming tax credits for installing solar equipment.
Step 2: Complete IRS Form 5695. Fill out the total expenses for solar installation in line 1 of IRS Form 5695. Also, you can claim tax credits for other renewable energy sources by filling out lines 2 to 5.
Step 3: Determine your annual tax on Form 1040. Fill out sections 1 to 18 to determine your tax liability. This step will help you know how much renewable energy tax credit you can access in a tax year.
Subtract your tax credit from the tax liability. If the credit exceeds your tax liability, you must rollover the excess credit to the next year.
Note: The Missouri tax credit for solar panels can be rolled over for five years.
Step $: Add the tax credit you're eligible to receive in line 5 of Schedule 3 on Form 1040.
You may file completed tax documents either through a third-party tax company like Intuit or TurboTax. On the other hand, you can file your taxes using a tax preparer who is also an Electronic Return Originator. Search online for the nearest ERO tax preparer in your region.
You may also send the documents via mail to:
Department of the Treasury
Internal Revenue Service
Kansas City, MO 64999-0002
Net metering is a solar incentive in which renewable energy users receive credits for generating excess electricity. In this program, an electric utility company buys the excess electricity and pays the user in the form of energy credits.
These credits are stored in a net meter installed on the user's property. That said, the user may use the stored credits to pay for electricity when their renewable energy output is low. Solar energy output is low at night and during the winter season. Cloudy weather conditions can also reduce solar energy output.
Net metering is one of the oldest renewable energy incentives in Missouri. It came into existence through Section 386.890 of the RSMo or Easy Connection Act of 2007. This law enables users of renewable energy to get incentives for sending their excess power to utility companies.
You must fulfill these requirements to qualify for net metering in the state.
In Missouri, each electric utility company has a specific guideline for net metering enrollment. For instance, Intercounty Electric Cooperative's customers must follow these steps to enroll in net metering.
Step 1: Download and fill out sections A, B, C, D, F, and G of the Interconnection Agreement Form.
Step 2: Attach these documents to the form:
Step 3: Send these documents to the utility company via mail at:
Intercounty Electric Cooperative
P.O. Box 209 102
Licking, MO 65542
Phone: (573) 674-2211.
Step 4: The company will send an approval or denial within 30 days for PV systems rated at less than 10 kWh. However, it will take 90 days to get feedback if the system has a capacity above 10 kWh.
Step 5: Once approved, you must construct the solar system according to the rules on the agreement form.
Step 6: Next, fill out Section H of the Agreement Form and resend it to the company.
After receiving the application, Intercounty Cooperative will connect your renewable energy system to the grid within 15 business days.
As of March 2023, there are no local property tax exemptions for residential solar owners in Missouri. However, commercial solar owners are eligible for this incentive under Missouri Senate Bill SB 881. The bill allows companies to avoid paying property tax on installed solar systems.
However, residential solar owners are eligible for numerous renewable energy incentives in Missouri. These incentives help reduce the financial burden of an increased property tax.
For example, you can use the PACE financing option as an alternative. It offers low fixed-interest loans and reduces the upfront cost of solar installation.
The Property-Assessed Clean Energy Financing is a loan option for renewable energy users. Under this scheme, residents will receive loans to finance their renewable energy system projects. Furthermore, the program will calculate the repayment plan and add it to the property tax.
The PACE financing program is beneficial to Missouri residents for these reasons:
Step 1: Check if you're eligible to apply for the program. Visit the Missouri Clean Energy District website to view the eligibility requirements. \
Step 2: Fill out the PACE application for any of the state's PACE programs. Show Me the PACE and Set the PACE are examples of these programs. \
Step 3: Follow the application guidelines and choose an approved solar installation company.
You can sign up for the PACE program with these solar companies.
Ameren Missouri's Solar PV Rebate Program offers incentives to solar users who are also customers of the electric company.
To access this offer, interested parties must create an account and fill out an online application form on the Ameren website. Furthermore, you must provide these details during sign-up:
Beneficiaries will receive $250 for every kWh of solar power installed. This offer is valid from June 1, 2019 to December 31, 2023.
This program offers cash incentives to entities that increase their energy efficiency by 30 percent. Only commercial or industrial customers of Columbia Water and Light can access this incentive.
These entities will receive $300 for every kilowatt saved by increasing energy efficiency. Nevertheless, the program will only reward you for saving a maximum of 75 kWh, or a maximum of $22,500. Also, the Missouri energy rebate program only pays for half the cost of installing the energy-efficient system.
To qualify for the program, the project must be one of the following:
Furthermore, the project must be completed within one year.
To apply for the rebate, customers must send an application to Columbia Water & Light’s Utility Services. Also, add these documents when sending an application.
Under this Missouri renewable energy rebate program, you'll receive $0.25 for every watt of solar power installed in your home. Only customers of Kansas City Power and Light can access this offer. To qualify, the PV system must be new and installed on the customer's property.
Liberty Utilities is a first-come, first-serve solar incentive. It offers $0.25 per watt for solar systems installed between July 1, 2019, and December 31, 2023. To qualify and access this rebate, you must fulfill these criteria:
Missouri does not offer a sales tax exemption for solar equipment. According to the Missouri Department of Revenue, residents must pay a 4.225% sales tax on any solar equipment purchase. That said, you may add the sales tax as expenses when filing for a federal solar tax credit.
Wind, solar, hydropower, and biomass are the major renewable energy sources in the state. Wind energy accounts for 70 percent of the state's renewable energy production. As of January 2022, Missouri had installed over 2,000 megawatts of wind energy-producing facilities. In addition, the state is currently developing a 53-megawatt facility to increase the current power capacity.
Missouri is home to five industrial-scale hydroelectric power plants and three pump-storage hydroelectric plants. The state switches to the pump-storage plants when there's a higher demand for electricity. As of 2022, the state's hydroelectric facilities had the capacity to produce up to 500 MW. Besides hydroelectric facilities, Missouri also generates power from solar energy.
About six percent of all the renewable energy in Missouri comes from utility-scale and small-scale solar installations. Furthermore, 75 percent of solar energy production comes from customer-sited solar installations.
Note: small-scale solar installations often have a power generating capacity of less than 25 kWh.
Biomass is also another renewable energy source in Missouri. In fact, the state has the third-largest biodiesel production capacity in the US. It produces over 253 million gallons of biodiesel annually. Livestock manure, wood pellets, and ethanol are also generated to power biomass facilities in the state.
Note: Missouri residents do not have an obligation to purchase 100 percent of their electricity from renewable energy sources. However, investor-owned electric utilities must purchase 15 percent of their electricity from renewable energy-producing facilities. These facilities may include solar systems, wind turbines, and hydroelectric power plants.
The U.S. Department of Energy's 2021 report revealed that Missouri generated 91.8 terawatt-hours of energy. The state's total output is about 2 percent of the total energy generated in the US.
Missouri generates electricity from both renewable and non-renewable energy sources. As of 2021, 89 percent of its energy output came from non-renewable energy sources like coal, nuclear energy, and natural gas. The remaining 12 percent of the state's energy output comes from renewable energy sources.
The state's power plants burn bituminous coal to meet 74% of the energy demand. Natural gas and nuclear energy account for nine and six percent of the state's energy output, respectively.
According to the EIA report for 2020, Missouri consumed a total of 276.6 million BTUs of energy per capita. The report provided information on the energy consumption in these sectors: