The old Fargo theater
North Dakota has a little of everything that make the northern plains great: wide open spaces, phenomenal archeological digs, Painted Canyon, and Native American and pioneer historic sites. Oh, it also has ranches, wineries, and the Maah Daah Hey trail – with 97 miles of some of the best single track biking around. All of that history and outdoor excitement needs clean solar power to preserve it for generations to come. How has the North Dakota legislature done with promoting renewable energy? Read on…
North Dakota’s 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.
North Dakota has set an objective of 10% renewable energy by 2015. While that would ordinarily be an adequate first step for an RPS, North Dakota’s RPS is entirely voluntary. There are no penalties or other sanctions for utility companies that do not meet the 10% goal.
Unfortunately the patterns we’ve seen elsewhere is repeated in North Dakota: A voluntary RPS simply is not enough to spark meaningful incentives for solar power. For instance …
Solar Performance Payments and Rebates in North Dakota
North Dakota lacks any utility solar power rebates or performance payments. If the RPS set mandatory levels of renewable energy production, we can guarantee the utility companies would offer incentives to help you make the switch to solar. How do we know? It’s worked everywhere that a real RPS has been implemented!
North Dakota Solar Tax Credits
The legislature isn’t picking up the slack either; there are no tax credits for installing a solar power system here.
North Dakota Solar Tax Exemptions
While you won’t save money on your state income taxes, you will save loads of cash with a five-year, 100% exemption from paying property taxes on the value installing a solar power system adds to your home (we’ll talk about how much value in a minute).
Lawmakers almost went two for two here, but unfortunately the current sales tax exemption only applies to systems above 100 kilowatts (“kw”) (i.e., commercial and industrial systems only). We don’t know what they were thinking down in Bismarck when they failed to include small systems in the exemption, but it’s an easy fix that could save you 5% up front.
Utility Prices in North Dakota
North Dakota pays an average of 9.57 cents per kilowatt-hour (“kwh”) of electricity. That’s one of the lowest average rates in the nation, and well below the national average of 11.43 cents/kwh. We know you like paying less now, but the long term costs of cheap electricity are through the roof. All that cheap electricity is produced by burning fossil fuels. Tons and tons of earth-killing fossil fuels. When the astronomical environmental costs start to mount, monthly electricity bills are inevitably going to rise as well. When that happens you’re going to feel pretty darn smart for making the early switch to producing your own clean, efficient solar power. Just remember to thank us …
North Dakota 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 make sure you get credit for any surplus. North Dakota requires investor-owned utilities to offer net metering to all customers; electric cooperates and municipal utilities are exempt from the net metering regulation. For customers of investor-owned utilities, the electric company is required to cut you a check for all surplus energy at the utility’s avoided-cost rate. All systems up to 100kw in size are eligible for net metering.
Overall we were forced to give net metering here a low grade because of its limited scope (excluding cooperatives and municipal utilities), limited system size allowances (only up to 100kw, excluding commercial customers) and lack of payments at the full retail rate. That said, if you are lucky enough to be a customer of an investor-owned utility who only needs a residential-sized system, you’re still getting a pretty sweet deal.
While the net metering program is pretty strong for residential customers of investor-owned utilities, even for those lucky folks there are no interconnection standards in place to regulate the process of getting connected to the grid. Generally a strong net metering program comes with statewide standards limiting the utilities’ discretion over interconnection studies and associated fees, potential insurance requirements, and redundant external disconnect switches. Because North Dakota lacks statewide standards, those costs and requirements will vary from utility to utility. Don’t worry; the expert installers we partner with can answer all of those questions and more.
5kW Example Return on Investment in North Dakota
Installing a typical 5kW solar system 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 $634. That brings your cost after the first year to $16,886.
- 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 17 years. Even with that somewhat slower payback time frame, you can still expect to get about 8 years of profits out of your solar power system. We estimate those profits to be nearly 14 grand through 2036.
- In addition to those direct wallet-fattening savings, you also increased your home value by $12,690, tax free for the first five years!
- In addition to all that cash (and home value), you’ve created some green for the earth as well 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.
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!
North Dakota Solar Consensus
Most people think about cold, often snowy plains when they think about North Dakota. And it sure does get cold here. Most of them don’t realize we get lots of sun here as well. As much sun as most parts of Florida in fact. Unfortunately that tremendous solar power potential is being squandered. The lack of state or utility backed solar power incentives is keeping costs high (compared to solar-friendly states) for homeowners like you to make the switch, and keeping payback time frames slow. Even without any incentives, solar power is an excellent investment, but the legislature should be harnessing our natural solar resources to help bring down initial costs. That property tax exemption is a good first step, but it’s only a first step. The bottom line is that without any mandatory renewables standards, and without any state incentives in place, we can’t give North Dakota anything but an “F” for solar policy.