Soldier and a loved one overlooking Kansas
Kansas used to be the floor of an inland sea. That means the state is home to a phenomenal wealth of natural history. Not only that, Kansas is the breadbasket of America. Guess what you need to grow food? You guessed it: sun. With all those wide open spaces on the plains, Kansas is the perfect place to take advantage of clean solar power. Using renewable energy would protect the valuable natural history of the state and preserve its farmland too. Lately, the state legislature has been taking 1 step forward and 2 or 3 steps backward on clean power though. Here’s how the lawmakers have addressed renewable energy.
Kansas’ Renewables Portfolio Standard
A Renewables Portfolio Standard (“RPS”) is a law or other piece of regulation that mandates that a certain percentage of at state’s energy production comes from renewable resources by specified target dates. A strong RPS is important because it forces utility companies to promote conversion to renewable energy. That generally means free money for you in the form of solar power rebates and performance payments when you switch to solar.
Kansas is taking the legislative lead in the region, and unlike a lot of our neighbors, we have a pretty strong RPS in place here (yay us!) While most state RPS’s are based on total retail sales of electricity, the RPS here is based on total capacity for electricity generation. A utility’s total capacity is equal to the net capacity of all facilities the utility owns or leases. Each facility’s net capacity is determined by subtracting the power needed to operate a facility from that facility’s total electricity output.
Utilities must generate 20% of total electricity capacity from renewable resources by 2020. That target will be reached in phases. Currently 10% of electricity must come from renewable resources. That minimum raises to 15% is 2016, and reaches the final 20% in the beginning of 2020.
Solar Performance Payments and Rebates in Kansas
Unfortunately this is one of the few places that a solid RPS has not translated to utility-backed rebates or performance payments for residential solar power systems. There are currently no such incentives available here.
Kansas Solar Tax Credits
The legislature hasn’t been much help in picking up the slack on residential incentives; there are no tax credits available for installing a solar power system here either.
Kansas Solar Tax Exemptions
Fortunately the legislature has passed a property tax exemption. While this won’t save you any money upfront, it will save you thousands over the long haul. Installing a solar power system adds value to your home (we’ll get to how much value in just a minute). With the property tax exemption in place, you won’t have to pay a single extra penny in property taxes for that home value increase. That saves you thousands over the three decade life of your solar power system!
Unfortunately lawmakers have yet to pass a matching sales tax exemption. While you may not think about it on smaller purchases, not paying that extra 6.3% would save you a pretty nice chunk of change on your new solar power system.
Utility Prices in Kansas
Kansas pays an average of 11.61 cents per kilowatt-hour (“kwh”) of electricity. That’s right around the national average of 11.43 cents/kwh. We know you like the cheap electricity, but the long term costs of those prices are through the roof. All that cheap electricity is produced by burning fossil fuels. Millions upon millons of tons of greenhouse-gas producing, ozone killing fossil fuels. When the astronomical environmental costs start to mount, monthly electricity bills are inevitably going to rise as well. And that happens you’re going to feel pretty darn smart –we’re talking Einstein level smart– for all that cash you’re saving with your clean efficient solar power system.
Kansas Net Metering and Interconnection
Net Metering requires your utility to monitor how much energy your solar power system produces and how much energy you actually consume, and to make sure you get credit for any surplus. Kansas requires all investor-owned utilities to offer net metering. All monthly surplus energy production is applied as a credit to your next bill at the full retail rate. Unfortunately the utility will not cut you a check for long-term surplus. At the end of every calendar year all unused surplus credits will be granted back to the utility without compensation. Net metering is available for residential systems up to 25kw in capacity on a first-come first-serve basis until net-metered systems reach a total of 1% of a utility’s peak electricity demand during the previous year.
That’s a pretty solid net metering program. Overall we gave Kansas a “B” in this category only because of the system limits that prevent all customers from meeting on-site generation needs, and because electric cooperatives and municipal utilities are currently exempt from the requirement to offer net metering at all. We’d like to see the net metering program expanded to cover all utility’s and every-sized customer. But all in all the regulations in place are a solid start.
Legislators should use that solid foundation to expand interconnection procedures as well. Currently there are virtually no interconnection procedures in place here beyond basic safety requirements addressed in the net metering law. While lawmakers did set rules for additional liability insurance (prohibiting utilities from requiring it) and external disconnect switches (allowing utilities to require them, despite their redundancy), very little else is addressed. Interconnection could be vastly improved here by adopting the Interstate Renewable Energy Council’s standard procedures.
5kW Example Return on Investment in Kansas
Installing a typical 5kW solar system in Kansas should start at about $25,000. Don’t worry – even without state incentives, you’re still going to save a lot, just in the first year.
- Since the feds calculate the federal solar tax credit based on actual out of pocket costs, no state solar power rebates or other incentives mean a bigger federal tax credit. Subtract $7,500 (30% of $25,000) for a new price of $17,500.
- After the federal solar tax credit we subtract your first year’s energy savings, which we estimate to be about $770. That brings your cost after the first year to $16,730.
- With a conservative estimate for the future rise of electricity prices, you can expect your new solar power system to pay for itself in about 15 years. Even with that somewhat slower payback time frame, you can still expect to get another 15 years of profits out of your solar power system. We estimate those profits to be more than 20 thousand through 2036!
- In addition to those direct wallet-fattening savings, you also increased your home value by $15,395!
- And last but not least, you’ve created some green for the earth as well as yourself by not using all that fossil-fuel backed electricity. In fact, the fossil-fuel energy you’re not using is the carbon-saving equivalent of planting 117 trees a year, every year your solar power system is humming.
We used numbers for the Kansas City area, where folks get a little bit less sun than the western part of the state. Payback there should be a little bit faster. Even if you are in Kansas City however, keep in mind that these numbers are estimates. Your home is unique and how much power you generate and how much money you save depends on that uniqueness. The best way to find out how much cash switching to solar can save you is to get one of our free quotes, and an expert installer in your area can draw up a home-specific estimate for you. Your quote is 100% free (yes, that’s right, 100% free) and you can get as many of them as that smart shopper in you desires!
Kansas Solar Consensus
With all that space in Kansas, solar energy could really make a difference in the future of the state. If only lawmakers could see beyond their own noses and take advantage of this abundant renewable resource. Some work has been done, and at least the legislature has considered the issue from time to time. Unfortunately, the bills that are passed often end up watering down or completely removing any progress on clean power generation. In short, Topeka needs to take solar energy much more seriously. The RPS and property tax incentive are a start, but they’re only enough to earn The Sunflower State one bump up to a “D” for now.