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The cost of electricity in the South in June 2024 ranged from 11.49 cents per kilowatt-hour in Louisiana to 15.05 cents per kilowatt-hour in Alabama, according to the EIA. That's around the national average. In general, you'll save more money quicker with solar if it's replacing more expensive energy, but that's also dependent on how much energy you use and the policies that support or deter solar adoption.
As of the first quarter of 2023, a finished solar installation was running $3.28 per watt on average nationwide, according to consulting firm Wood Mackenzie (PDF). The Lawrence Berkeley National Laboratory did its own analysis and found the cost of a typical 8.6-kilowatt residential system was $31,558 to install before incentives, or about $3.67 per watt. Throughout the south, the cost of solar tends to run close to or below the national average, according to data from FindEnergy.com. A few exceptions are Louisiana, where the cost is above the national average, and Alabama, where state legislation disincentivizes solar installations and pricing data is hard to gather.
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System size (kW) | Price per watt | Installed cost | |
---|---|---|---|
Alabama | N/A | N/A | N/A |
Arkansas | 10 | $3.49 | $34,900 |
Kentucky | 10 | $3.65 | $36,500 |
Louisiana | 10 | $3.80 | $38,031 |
Mississippi | 11 | $3.14 | $34,540 |
Oklahoma | 10 | $3.13 | $31,257 |
Tennessee | 11 | $3.58 | $39,363 |
Texas | 9 | $3.33 | $30,014 |
Nationwide | 8.6 | $3.67 | $31,558 |
This map provides an insight on the average total cash price, cost per watt and system size for a typical solar panel system in your state, according to data from FindEnergy.com. Any prices you see don't represent potential rebates from tax credits or state incentives. Certain states don't have any FindEnergy solar data and are grayed out on the map.
Overall, the south is lagging behind the rest of the country when it comes to solar incentives. According to Kysor, Alabama and its largest monopoly utility, Alabama Power, have some of the most punitive regulations in the country designed to discourage the spread of solar. That said, net metering policies and some incentives like property tax exemptions tied to solar systems, have slowly been put in place over the years and the region is catching up to the rest of the country slowly.
Living in the South doesn't exclude you from one of the most valuable incentives available: the US federal tax credit for solar. For any solar panels installed through the end of 2031, the federal government will credit you 30% of its cost on your income taxes.
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Net metering | Property tax exemptions | Sales tax exemptions | |
---|---|---|---|
Alabama | Not available | Not available | Not available |
Arkansas | Available | Not available | Not available |
Kentucky | Available | Not available | Not available |
Louisiana | Available | Available | Not available |
Mississippi | Available | Not available | Not available |
Oklahoma | Available | Not available | Not available |
Tennessee | Not available | Available | Not available |
Texas | Through some utilities | Available | Not available |
The process of paying for or financing a new solar system generally works the same in the South as anywhere else in the country. However, markets are influenced by the conditions set by local legislation, so you may find fewer financing options for solar in places where the policy climate is less favorable.
Cash: Paying upfront is typically the quickest way to get your solar project moving forward, as with most things. It's also a good way to keep more in your account by avoiding today's high interest rates.
Solar loan: There are a variety of financing products available designed specifically with solar systems in mind. They're offered by both national and local financial institutions, so be sure to shop around for the best rates. A number of installers, particularly the larger national solar companies, may also have in-house programs to assist you, just ensure you read all the fine print.
Other types of loans: All kinds of organizations are out there waiting to lend money for whatever reason. You can bring your own financing to many solar companies in the form of a personal loan, home equity loan or home equity line of credit, aka HELOC.
Lease or power purchase agreement: If a decades-long commitment isn't your thing right now, ask about the possibility of leasing a solar system. Another popular arrangement is a power purchase agreement, that amounts to almost the same thing in practice, but with a different payment structure. Power purchase agreements availability varies state to state and location to location.
The south may have a reputation for being cloudy compared to the desert southwest, but it still has some of the best solar potential in the country, especially in Texas. Some southern states, notably Alabama and Mississippi, have relatively high electricity prices, making solar potentially more attractive where policies like net metering are in place.
Lots of solar panels and other equipment is currently manufactured in a few southern states, like Alabama.
"Without good solar policies, most of those panels are going to get shipped outside the state," Kysor said.
The region continues to lag behind with such policies, but Kysor is optimistic that nationwide incentives like the federal tax credit may provide needed momentum to change that.
Almost every home has solar potential, but there may be dealbreakers like a lack of line of sight to the east, south and west or other obstructions. Among the key things to consider as you begin to ponder going solar:
The companies we listed above as "the best" are curated from CNET's best solar companies list. Companies making the best list are scored on the equipment, warranties and customer service they offer. Then, we make sure these recommendations are available in your state. You can read a full breakdown of how we review solar companies here.
Companies listed under the local installers (unless otherwise noted) were chosen in a less rigorous way. We chose them because they offered something unique or notable to customers in the state, they seemed well-regarded by internet reviewers or because they were one of the few installers we could find information on in the state.
Whether we've completed a full review on a company or not, it's always a good idea to get multiple quotes from different installers before choosing a company.
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Do solar panels save money?
Solar panels typically pay for themselves over time via net metering programs that credit homeowners for the energy they produce and send to the electrical grid. Off-grid systems can also save money by replacing a monthly electric bill completely.
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Net metering is a program run by a local utility in which homeowners connect their solar system to the electrical grid and are compensated for the power they produce with billing credits against their own energy consumption.
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Source: cnet.com