Missouri offers several incentives and policies to help make the switch to solar power more affordable. Here are some key reasons to go solar in the Show-Me State, from local solar incentives to federal tax credits. You can also check out our guide to the best solar companies to find providers that will help you apply for these incentives.
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What Are the Available Missouri Solar Tax Credits and Rebates?
There are some rebates and solar incentive programs available for Missouri homeowners. Here is the most recently available Missouri solar incentives
USDA REAP Grant
Missouri residents in more rural areas can use the United States Department of Agriculture’s Rural Energy for America Program (REAP). This program assists rural small businesses and agricultural producers by conducting energy audits and providing Renewable Energy Development Assistance (REDA). Applicants must submit separate applications. The maximum aggregate amount of an energy audit and REDA grant is $100,000.
More resources: DSIRE page
Property Assessed Clean Energy (PACE) Program
In certain cities and towns in Missouri, this financing program allows homeowners to pay for energy efficiency improvements or renewable energy. Repayment is handled through the annual property tax bill and can offer terms of up to 20 years at a fixed rate.
How Can You Apply For the Federal Solar Tax Credit?
The federal solar investment tax credit (ITC) is a valuable incentive for homeowners who install a solar system. The ITC provides a dollar-for-dollar reduction on your owed federal taxes, equaling 30% of your solar panel installation costs. You apply for this credit during tax time by filling out IRS Form 5695 and submitting it with your annual tax return. This credit directly reduces or eliminates your owed federal tax. For example, if you owed $5,000 in federal taxes and your solar tax credit was $4,500, you would only pay $500 in taxes. If your tax liability is lower than the value of your solar tax credit, any remaining credit rolls over to the next year.
Eligibility for this tax credit depends on ownership. If you lease your solar panels or have a power purchase agreement (PPA) with a provider, you won’t qualify for the ITC because you don’t technically own the system. To be eligible, you must purchase the system outright or finance it with a loan that allows you to retain ownership.
Does Missouri Offer Net Metering?
Net-metering is a billing program that provides energy credits to solar energy system owners for the electricity they add to the grid. Missouri’s Net-Metering and Easy Connection Act requires all utility companies to offer net-metering and free grid interconnection to Missouri customers with a solar system under 100 kW. The law applies to all regulated electric utilities, municipal electric utilities, and rural electric cooperatives.
The law also requires municipal utility companies and rural electric cooperatives to adopt simple contract policies for interconnection and net metering. For systems of 10 kW or less, the application must use an all-in-one document that includes an interconnection request, simple procedures, and a brief set of terms and conditions.
How Much Do Solar Panels Cost in Missouri?
The average cost of a solar panel system is around $16,129 before tax incentives or rebates. However, solar panel installation in Missouri is more affordable than the national average, with 5-kilowatt systems in the state costing an average of $14,264, according to EnergySage. Applying the federal solar tax credit can save you $4,279, bringing your total system cost down to approximately $9,985.
Your total solar investment and return on investment (ROI) depend on the solar financing method you choose. Here’s a breakdown of each option:
- Cash purchase: Paying for your system upfront provides the highest long-term savings and ROI. Since you own the system outright, you qualify for all incentives and avoid interest rates, credit checks, and loan fees.
- Solar loan: This financing option allows you to own the system while spreading payments over time. Though you’ll pay interest, you still qualify for tax incentives and rebates, making it the second-best option for maximizing savings.
- Solar lease: A solar lease lets you rent your solar system for a fixed monthly fee. While it reduces upfront costs, it disqualifies you from incentives and doesn’t add value to your home since you don’t own the panels.
- Power purchase agreement (PPA): With a PPA, you pay only for the electricity your system generates, similar to a utility bill. Some PPAs include system maintenance, but you won’t own the panels or qualify for solar incentives.
Each financing option has advantages and trade-offs, so consider your budget, eligibility for incentives, and long-term financial goals. Consulting with a solar provider can help you find the best option for your needs
Is Going Solar in Missouri Worth It?
Based on our research, solar is worth it in Missouri. The state has open skies with plenty of sunshine, quality solar rebates, and an effective net-metering program. Your system will pay for itself in an average of 9–12 years, and you can continue enjoying energy bill savings for the remainder of your system’s 25- to 30-year life span.
How To Go Solar in Missouri
Here’s a step-by-step guide on going solar in Missouri:
- Consultation: Start by reaching out to multiple solar companies to assess your home’s sunlight exposure and determine the best system size for your energy needs. Installers typically use online tools to estimate your property’s solar potential before conducting an in-person site survey that determines how many solar panels you need. This initial evaluation usually takes a few days.
- Design: After the site survey, your installer will create a custom solar system design based on your roof space, energy consumption, and budget. You’ll receive design options that balance cost and performance, including recommendations for inverters and battery storage if needed. Finalizing the design typically takes one to two weeks and involves ongoing communication with your installer.
- Permitting and approvals: Once the design is approved, your installer will handle the permitting process, which includes submitting applications to local zoning offices, homeowners’ associations (if applicable), and utility companies. Approval timelines vary by city and utility provider, but this step generally takes one to two months.
- Installation: After securing permits, your solar panels will be installed. Most companies complete the installation in a single day, though the entire process—from consultation to installation—typically spans one to three months. Some installers may conduct site visits or even use drone technology to streamline the process.
- Final inspection and activation: Following installation, a final inspection ensures your system is functioning properly and meeting utility requirements. Your installer will help set up net metering with your utility company so you can earn credits for excess solar energy and explain any required system maintenance. You’ll also learn how to monitor your system’s performance, either through a mobile app or by checking your inverter manually. If your system includes battery storage, your installer will explain how it operates during power outages for off-grid power.
Our Conclusion
Missouri is missing a few key solar benefits, such as a property tax exemption, but it has plenty of other incentives to make going solar more affordable. As energy costs increase, so will your savings from a home solar system and other clean energy initiatives.
It’s important to do thorough research and consult a solar expert to understand your specific savings potential and to receive the best solar panels for your home.
FAQs About Solar Tax Incentives in Missouri
How to get free solar panels in Missouri?
There is no way to get free solar panels in Missouri or any other state. If you encounter anyone claiming to provide free solar panels, this is a red flag, and you should consider a different company.
Where not to put solar panels?
A 50-degree or more angle roof is considered too steep for a solar panel. The panel would likely be in deep shade for large portions of the day, so it can’t harness the required power.
What wears out on a solar panel?
Solar panels degrade over time because of their exposure to the elements. Heavy rainfall, snowfall, ice, and high temperatures cause hardening of the crystalline silicon, frame corrosion, and cell contamination.
