Mississippi Solar Power: Check Your Savings, Costs, Tax Breaks, Incentives and Rebates
Mississippi is a very sunny state, receiving average yearly rates of solar radiation that exceed five peak sun-hours per day on many locations and is a great solar investment. Compared with states farther to the north, which receive around four peak sun-hours per day, this represents a 25% increase in energy output without having to make the photovoltaic system larger!
In addition to the available sunlight, there are further incentives to go solar in Mississippi if you are a customer of the Tennessee Valley Authority electric utility (TVA).
They offer a flat $1,000 rebate for any residential PV system, and then they will purchase all of your energy above the retail price.
Return on Investment for Residential Solar Power in Mississippi
The ideal solar PV system size for your home mainly depends on how much energy you consume each month and your available rooftop area.
However, a 5-kilowatt PV systems generally offers a great balance between initial investment and solar savings.
We will illustrate the performance of a solar PV system in Mississippi by assuming that rated capacity.
- The upfront expense before incentives is around $20,000. - However, the TVA rebate brings this down to $19,000. - After the rebate, you can apply the 30% tax credit from the federal government, valued at around $5,700, which brings the price down to $13,300. - Finally, consider you will save around $900 during the first year, so you will be able to go solar for net expense of around $12,400. This is roughly $2.5/watt, a great price for a residential PV system. - You can expect to get back your investment in around 14 years, and your total net profit over 25 years will be around $17,000! - Do solar panels increase home value? Your property has just increased in value by nearly $15,000. - The environment has also benefited from your investment, which has the same impact as planting more than 110 trees per year!
- The upfront expense before incentives is around $20,000.
- However, the TVA rebate brings this down to $19,000.
- After the rebate, you can apply the 30% tax credit from the federal government, valued at around $5,700, which brings the price down to $13,300.
- Finally, consider you will save around $900 during the first year, so you will be able to go solar for net expense of around $12,400. This is roughly $2.5/watt, a great price for a residential PV system.
- You can expect to get back your investment in around 14 years, and your total net profit over 25 years will be around $17,000!
- Do solar panels increase home value? Your property has just increased in value by nearly $15,000.
- The environment has also benefited from your investment, which has the same impact as planting more than 110 trees per year!
The payback period in Mississippi is extended by the low electric rate of $0.12/kWh, which is below the national average.
However, if you are a TVA customer you get $0.14/kWh thanks to their feed-in tariff… a 17% boost on top of your PV system savings is always welcome!
Also keep in mind that, by going solar in Mississippi, you are helping the environment in addition to saving money.
The low electric rates are possible in great part due to widespread use of fossil fuels such as coal, which is cheap in terms of cash but expensive for our planet.
Governments throughout the world are realizing the importance of environmental sustainability, and more stringent regulations for carbon-intensive sources of energy could come into play in the near future.
When this happens, electric power from fossil fuels will become more expensive and you will save even more money if you already have a solar PV system by then!
This general analysis is for a 5-kilowatt PV system, and it assumes the average sunlight available in the state. In reality, no two projects will have the exact same performance due to differences in terrain, rooftop orientation, natural or man-made obstacles, and other factors that are specific to each site.
- A south-facing roof.
- No significant obstacles blocking the sunlight that reaches your rooftop.
The NASA Atmospheric Science Data Center is a great web resource in case you want to know the exact sunlight availability at your location.
Just input your coordinates, and you will get detailed data tables breaking down solar radiation availability by month and by solar panel inclination angle, as well as average values for the entire year.
Mississippi Solar Power Incentives, Tax Breaks and Rebates
It is unfortunate that Mississippi does not have a solid framework to incentive solar power at the state level.
There is no Renewable Portfolio Standard setting renewable energy goals for local utilities, and there are no local tax deductions and credits.
Thankfully, the lack of state incentives is compensated by the natural incentive of abundant sunlight, as well the 30% federal tax credit.
Mississippi Tax Credit
The only tax credit available for Mississippi homeowners who go solar is the 30% ITC from the federal government.
- If you own the PV system, the federal tax credit is yours to take. This means that if you purchase your PV system through a low-interest loan, you will get a huge tax deduction first and can pay for your purchase later! - Don’t worry if you are not taxed high enough to get the full benefit from the ITC in one year: you are allowed to split it into two tax credits.
- If you own the PV system, the federal tax credit is yours to take. This means that if you purchase your PV system through a low-interest loan, you will get a huge tax deduction first and can pay for your purchase later!
- Don’t worry if you are not taxed high enough to get the full benefit from the ITC in one year: you are allowed to split it into two tax credits.
The best recommendation we can give, if you already decided to go solar, is to do it before the year 2020.
At the moment, that is the expiration date of the 30% ITC and it will then drop to a more modest value of 10% unless extended.
Are There Any Rebates for Solar Power in Mississippi?
In the absence of a Renewable Portfolio Standard, there are no state-wide rebates for solar power in Mississippi. However, TVA offers a flat rebate of $1,000 for residential PV systems of all sizes.
Since TVA is a very large utility covering roughly one-third of the territory in Mississippi, a significant portion of homeowners can benefit from their rebate.
Combine this rebate and the federal tax credit, and nearly $7,000 are deducted from upfront expenses!
Mississippi Electricity Rates
Mississippi has low electric prices, at an average value of $0.12/kWh, which is around one cent under the national average. Other states have cheap electricity thanks to hydroelectric and wind power, but unfortunately in Mississippi it comes mostly from fossil fuels.
Is There Net Metering in Mississippi?
Unfortunately, there is no net metering policy in Mississippi. This means that electric utility companies set the rules if you want to plug in a residential PV system on their grid.
- TVA is the most benevolent one by far: They give you a rebate for plugging your PV system to their grid, and on top of that they purchase all of your power at 2 cents above the retail price. In other words, you save $0.14/kWh even though the average rate is $0.12/kWh.
- Other utilities prefer to keep solar power at bay, and they may set complex interconnection requirements and purchase energy from your PV system below retail prices. In other words, they make a profit at your expense.
There is no standard interconnection policy either, so utilities also set the rules for this. To make sure this complex interconnection process goes by smoothly, we recommend you hire a qualified solar contractor.
Is there a Feed-in Tariff in Mississippi?
As mentioned above, the only electric utility in Mississippi offering a feed-in tariff is TVA. In fact, if you are a TVA customer you actually lose money by consuming the output of your PV system:
It is better to sell all of the energy from your PV system at $0.14/kWh than using it to save only $0.12/kWh!
Are There $0 Down Payment Financing Options in Mississippi?
Unfortunately, there is no legal framework for third-party ownership of solar PV systems in Mississippi.
This means that the only option available for going solar with $0 down is to purchase the PV system through a loan, ideally a low-interest HELOC (home equity line of credit).
The main advantage of using a HELOC to purchase a solar PV system is that you can juggle around the project financials in your favor.
You will have 10 to 15 years to pay the loan, but only have to wait until your next tax declaration to get the 30% ITC, and also your PV system will start generating savings right away.
Although you will have to pay some cash to fully cover the loan, you will be done with it in 10 to 15 years.
After that, all energy produced by your PV system is free cash flow and you will achieve net savings of around $10,000.
It is less than the net profit of $17,000 you get from a cash purchase, but consider the loan lets you go solar for 0 cash down.
Cash Purchase VS Loan: What’s Best for Mississippi Homeowners?
There are three main factors you should take into account when deciding between a cash purchase and a loan to finance your PV system: the cash availability for an upfront purchase, the payback period that is acceptable to you, and the home equity you own.
Purchasing a PV system in Mississippi
Purchasing a PV system in Mississippi in cash is recommended if you are willing to pay $19,000 upfront and assume a 14-year payback period, in order to maximize your savings and get a net profit of $17,000 after getting back your initial investment.
Purchasing a PV system through a loan in Mississippi
Purchasing a PV system in Mississippi through a loan is recommended if you have a lot of equity in your home for a HELOC, and are willing to reduce lifetime savings of your PV system to $10,000… in order to have access to the option of going solar for 0 cash down.
What is the Solar Power Installation Process in Mississippi?
The lack of both a net metering policy and an interconnection policy can complicate solar PV system installation process in Mississippi, so the best advice we can give is to make sure you hire experts to do it.
1. Fill our solar installation form, providing basic information about your property.
2. Talk with trusted solar contractors near you to get detailed quotes.
3. Compare quotes and choose the best option for you. We recommend you get at least three.
4. Have your contractor install the PV system, and enjoy clean power while helping the planet.
The installation process is quick and free of disruption, lasting from three to four years after you sign the agreement.
Keep in mind this article assumes average sunlight conditions for the state of Mississippi, and the installation of a 5-kilowatt system.
You will know the exact project financials and performance once your contractor of choice evaluates your property and presents you with a proposal. To get an esstimate of what the propsal will be you can visit our solar calculater page.
Mississippi receives a generous amount of sunlight throughout the year, and all of it represents potential energy you can save if you install a residential PV system.
We strongly recommend you go solar if you are a TVA customer, since you will get an exclusive rebate and feed-in tariff.
You can also expect a huge tax break the next year thanks to the 30% ITC from the federal government.
The main areas in which Mississippi can improve the outlook for solar power are establishing an RPS, providing tax benefits at the state level, and setting clear rules for net metering and interconnection that favor homeowners.