Wisconsin Solar Power Rebates, Tax Credits, and Incentives
A cheesehead more interested in cheese than wearing the right jersey
2012 Update
Some may call it Dairyland, but folks here in the Badger State know that Wisconsin has a whole lot more to offer than its cheese. From the mighty Mississipp’ in the west to big ole’ Lake Superior in the north and everything in between, Wisconsin offers some of the most beautiful environments anywhere in the nation. 46% of the state, in fact, is covered by forest, including the 1.5 million acre Chequamegon-Nicolet National Forest. Needless to say, Wisconsin has a great deal to protect by promoting green energy. So how is solar policy doing out here? Let’s look.
Wisconsin’s Renewable Portfolio Standard
A Renewables Portfolio Standard 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. WIsconsin is on board with a statewide RPS, mandating that 10% of statewide electricity production come from renewable sources by 2015. We like the 2015 number — too many RPS’s push their goals far out into the future– but 10% is likely too low of a target to promote strong incentives for renewable energy.
A strong RPS with high targets is the core of all good renewable energy policy. Without mandatory renewable energy production levels, utility companies have no motivation to promote conversion to renewable energy sources like residential solar power system. With a strong RPS, it becomes cheaper for the utilities to help fund your solar power system than to pay penalties for missing RPS goals. That’s when you really see incentives kick in.
In short, a strong RPS is generally the single most effective law that state legislators can implement to promote renewable energy. Wisconsin lawmakers are missing a golden opportunity.
Solar Performance Payments in Wisconsin
Customers of 3 Wisconsin utilities are eligible to participate in solar power buyback programs. These are not true performance payments; you continue to purchase electricity from the utility at the normal retail rate, while selling all of the energy produced by your solar power system. In most places these buy-back programs or feed-in tariffs don’t make a lot of sense for residential systems like yours, but a couple of the options available to some folks here are pretty strong. Let’s go over all 3.
First, customers of Xcel energy you are eligible to receive an initial rebate of 1.50/watt installed, up to $15,000. After the initial rebate you’re locked into a ten year contract to sell your solar power to Xcel at $0.11/kw. Second, customers of River Falls Municipal Utilities (“RFMU”) can enter into a ten year contract to sell solar energy to RFMU at a rate of $0.30/kwh (4kw system max). Finally, customers of Madison Gas & Electric (MG&E) that are enrolled in the Green Power Tomorrow (an optional program to purchase green energy through MG&E) can sell solar energy to MG&E at a rate of $0.25/kwh. The contract to purchase power is for ten year, but you may opt out with 30 days notice.
Wisconsin Solar Rebates
The statewide Focus on Energy program will launch on July 1, 2012. Details have yet to be announced on what individual rebates will be available.
Solar Tax Credits in Wisconsin
Wisconsin does not offer any tax credits to promote renewable energy.
Solar Tax Exemptions in Wisconsin
Fortunately there are tax exemptions to help bring down the cost of your solar power system. You save 5-5.5% right off the bat via the sales tax exemption. Even better, you’re exempt from 100% of the property taxes normally associated with with the big increase in home value you’re going to get from installing a solar power system. (we’ll get to that).
Utility Prices in Wisconsin
WIsconsin pays an average of 13.23 cents/kilowatt-hour (“kwh”) of electricity. That’s noticeably above the national average of 11.43 cents/kwh, but it’s still pretty cheap. Too cheap, in fact.
Electricity is relatively inexpensive because most of our electricity still comes from dangerous amounts of fossil fuels. The cost of those fossil fuels in dollars and cents may be low (for now), but the environmental costs are astronomically high. Switching to solar power already saves you money, but when scarcity and environmental costs drive up fossil-fuel based energy prices, the early switch to solar power is going to be saving you piles and piles of money.
Wisconsin 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. If you produce a surplus, you get credit for it on your bill.
Net metering in Wisconsin is a bit scattered, but generally strong for residential customers.
All investor-owned and municipal utilities are required to offer a net metering program, but electric cooperatives are exempt from the requirement. So most utilities offer net metering, but there is a bit of variation among how the programs are implemented. Generally all surplus kwh are credited at the customer’s retail rate, and applied to the next bill. If credit exceeds $25, the utility must cut you a check for the amount. Some utilities may vary a bit, but that’s a pretty good snapshot. The one big exception is Xcel, which recently received permission to reconcile credit on annual basis at the utility’s avoided cost rate.
One way or another, you’re getting credit for all that extra energy at a pretty decent rate per kwh. Overall we gave net metering in Wisconsin a C because of system size limitations that prevent larger customers from efficiently meeting all on-site needs with renewable energy, and the law’s lack of a safe harbor provision that ensures the utility can’t charge you extra fees for net metering. But for a residential solar power system like yours, net metering is pretty solid here.
Wisconsin’s interconnection standards are more of a mixed bag. Your residential system is small enough (less than 20kw) to avoid any fees for reviews or studies. That’s great. Unfortunately, the money saved there will be spent purchasing insurance coverage, and installing a redundant external disconnect switch.
5kW Example Return on Investment in Wisconsin
What do all the numbers add up to for you? Let’s check:
Installing a typical 5kW solar system should start at about $25,000. Don’t worry, that’s going to come down a lot in year 1.
- The federal government calculates the 30% tax credit based on out of pocket costs. Until the state rebate details are determined (and the rebate is offered, of course), that means 30% of the full $25,000. Subtract $7,500 for a new price of $17,500.
- After the tax credit we subtract your first year’s energy savings, which we estimate to be about $774. That brings your cost to $16,726. That’s a pretty significant discount already, even before the state rebate program starts up..
- 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. After that you’ll be turning a profit (yes, a profit) for the rest of the life of your solar panels (typically about 25 years). We estimate that profit to be about $20,000 through 2037.
- In addition to all that money directly in your wallet, that new solar power system also increases your home value by $15,479, all of it tax free!
- Not to be forgotten, you’re also pumping out a bunch of green for the environment. Tree green that is. The fossil-fuel energy you’re not using is the carbon-saving equivalent of planting 103 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!
Wisconsin Solar Consensus
Grading solar policy is really something of a waiting here. At the moment, both the cost after year 1 and the payback timeframe are sub-par, not quite reaching the line we’d call “solar friendly.” That merits only a weak “C” grade. But all that could change in July when the details of the state rebate program are released. Check back here for updates as more information becomes available
Don’t forget the WI property tax exemption. Maybe this will elevate WI into the 5-star rating? :)
Is there a place or web site that is a collection of all you want to know about solar equipment and pricing and subsidies in WI?
Mark
Can I get some help on recieving a grant to put in Solar power- we own 40 acres deep in the woods with no hope of electricity,, they have given us a quote of 60,000 to run poser to our place. We are hoping that there is some kind of grant we can apply for to get solar put in. We plan to build there but not until we can figure out our power situation..right now we run off a generator. Please contact me on where to start… kim_krull@yahoo.com
Why can’t they make this easry and cheaper for us.
It’s pretty easy and the incentives make it much less expensive. Any solar installer will be familiar with the incentives. Find a couple contractors near you to do a preliminary site assessment and give you an idea of the cost of a system. When you figure the ongoing savings, the systems are not overly expensive– especially if connecting to the grid is that expensive.
Where do i go to learn about intstallation and design of PVC..I would be interested in attending a course.and get the certification in Wisconsin….
I work for a solar thermal parts and systems distributor in Milwaukee and have been in the solar industry for 8 years. There are a good deal of solar installation companies in WI and I’d be happy to help put people in touch with installers closest to them. Feel free to contact me at sharon hotwaterproducts com.
Also, for certification questions, here are some important links:
http://www.the-mrea.org
http://www.focusonenergy.com
http://www.renewwisconsin.org
http://www.nabcep.org
that dog has number 4 for brett favre but he is retired so you should change it to a differant number!!!!!!!
that dog looks like an awesome fan, i would like that dog to be my fan!!!!!!!
On Wisconsin Packer Dog!!!!!!!!
I would like to put up a skystream 3.7 wind turbine but i am on bayfield Electric co-op and cannot use focus on energy incentives. Any one know if anything else is available.
Sharon, I am looking into solar energy to supplement electricity/contractors Milwaukee, WI.
What is the current situation for selling power back to the grid off solar?
Is it possible to get a grant to help put solar panels at our municipal pool to heat the water? Where would I find help with this?
Great site! One helpful element that’s missing is a date on the information. It would be helpful to know how recent the data are! Thanks!
If a Wisconsin LLC purchases solar panels solely for the manufacture of electricity of which they sell directly to Alliant Energy as a contractual 10-year agreement in the buy-back program, is the equipment purchased for that manufacture subject to Wisconsin sales tax?
I would like to start out with an inexpensive kit. on a small scale to see how it works?
Is there a place that sells everything included?
Thank you, Pat
Hey, Pat,
Unless you’ve got some training, I really wouldn’t bother about size and testing things out. Solar is modular any way, meaning that you can always start small and add later if you want to test.
These are some excellent incentives here in Wisconsin, so just get a free quote from one of our installers for a small system. The sales person should explain or show you models of different sizes. You really can’t lose and you will probably learn a lot, at worst. Again, it’s free, so nothing to lose here.
FYI, I would NOT invest in any of these DIY kits that claim that you can find all you need to build your own solar panels at the local hardware store. Unless you have a great deal of time and energy and patience (as well as money) these are scams. Please trust me about this.
Pingback: Wisconsin Solar Rebates and Incentives Updated! Sort of.
I may have missed something, but why are the Federal/State tax incentives only listed at $6,750 (22.5%) when the US Treasury Grants alone will cover 30%? Is there a limit on what it can be used in conjunction with?
JP,
From our reading, if you are a resident, you must calculate the Federal 30% Investment Tax Credit AFTER any state rebate has been deducted. Businesses may take this cut from the top, but there are other tax considerations. Residents can also try this, but it’s unclear whether the IRS will accept this, and most of our installers have erred on the conservative side.
Also, remember this is NOT a grant, i.e., cash for home owners and small businesses. This is a tax credit, which is sort of like a gift card for the IRS. So if you get a $6,000 solar tax credit (no matter how you calculate it) then you can use that $6,000 to pay your tax bill. If you owe $8,000, on April 15th, you only have to pay $2,000. However, if you owe less, say $5,000, you won’t get a $1000 back from the government. Instead, you’ll have to use that extra grand towards next year’s tax bill or the following years. Check with your own tax people about the 30% calculation, but this is our understanding. We’re also waiting for the IRS to actually print the tax form and give more specific guidance.
Hope that helps.
I just installed a 7.5 kW system for our home at a hefty chunk of change. It is grid-tied and our co-op is happy to finally have someone install a system so they can evaluate how it works. But we have no grants available in the state from this co-op, and as far as I can see, I can only hope to recoop some of the cost through my federal taxes credit. I don’t see a state tax credit (only sales tax) and the property tax credit is only there so the assesor doesn’t assess my house at a higher rate because of adding in solar. Property tax credit won’t lower my property taxes.
What is in the future to help offset the cost in terms of tax credits from the state or grants for homeowners.
Dave in Rusk County
Dave,
first let me thank you for going ahead with your solar system despite the lack of rebates. You certainly rock, especially with a 7.5kw system. Sadly, you are accurate that the 30% federal tax credit is going to be the only real payback on that system if your co-op is not part of the Wisconsin “Cash Back Rewards” program.
Furthermore, I do not have solar crystal ball to predict the future rebates and state tax credits that might defer further costs for you. Typically, these are not retroactive, but perhaps with a little letter writing and phone calling from you and your neighbors to your co-op. and/or public utility commission, you might be able to affect some grass roots change. You also might want to contact votesolar.org and see what they suggest in terms of being proactive with your local legislator yahoos.
I’m sorry I can’t be more help. Any other Wisconsin lawyer/lobbyists able to help Dave? Please chime in. Either way, Dave, you’re a solar hero to us for installing the system. It should eventually pay for itself, just not as fast as people in the Rewards areas.
Thank you Fred.
For me putting in solar is a political/social decision even more than a monetary decision. I knew that we are not yet at a point where rebates are abundant, but I am hopeful they will as we need more clean energy. Even if I don’t fully recoop my expenses, my children and grandchildren will. I like reading your website, so thank you so much.
Thanks again, Dave! For saying what you said above, I’m recognizing you as a solar hero. I write another solar blog for the solar industry, and I’m including you on my solar hero list. You can see it here:
http://www.renewableenergyworld.com/rea/blog/post/2009/10/send-me-your-solar-heroes
Thanks again!
Solar in Wisconsin! I’m very glad to see all this great info on the WI solar landscape.
Hi Dave,
I wanted to know how did you calculate the cummulative savings and investment return percentage?
i have an inc. business with a flat 5000 sq ft roof in milw. i don’t know much about solar power, but am very interested. my biz is a day care and we would like to go as “green” as possible as a teaching tool. we have 360 degree exp. to the sun. is my building a good candidate? how many panels? would i be able to sell power back and how does that work? would i qualify for tax credits if i am a small corporation? thank you
Link: Wisconsin first in midwest to introduce feed-in tariff bill in 2010
January 8, 2010
Wisconsin First in Midwest to Introduce Feed-in Tariff Bill in 2010
by Paul Gipe, Contributing Writer
Wisconsin, United States [RenewableEnergyWorld.com]
Powerful Wisconsin legislators were first out of the gate in a brewing race to be the first to pass feed-in tariff legislation in the Midwest…
[NOTE: Due to copyright laws, we could not reprint the whole article that was left in this comment. Please RenewableEnergyWorld.com. The gist is that there is a Wisc. Feed-in-Tariff being introduced, but has not yet passed. Our apologies for not keeping up to date on every solar nook and cranny in every state. We have to eat sometime. ]
Thanks for the heads up, Greg. You Rock.
Interested in solar power for our barn…great sun exposure where do we start??
Hey, Nikki. I think you should peruse our FAQ sheet and then get a free quote from one of our partner installers or others in your area. I say this because every home is different, and since it’s a free estimate, the only thing you can lose is a bit of time, but you’ll get way educated about payback for you. Wisconsin has just passed a Feed-in-Tariff, so things are going to get even better there for incentives and quicker payback.
Please take note that the Focus on Energy incentives have changed significantly. See dsireusa.net for the most up-to-date info.
I read about a program that would give a low interest loan to home owners for going solar in the Madison area. The loan would be payed back to the City of Madison with your property tax payment every year until payed off. I believe it was in the WI State Journal a while back. I have since been searching for more info, with no luck. Madison was selected as 1 of @20 “solar cities” in the country. There is a really cool solar assessment tool on the “Madisun” website that shows ariel photo’s of homes in the City, and their potential hours per day of full sun. My house appears ideal at over 12hrs/day.
Hello, I’m seeking to find an installer position with a reputible solar company based in the Milwaukee area. I have solar hot water & photovoltaic systems installation experience, as well as some experience with drawing plans with a CAD-type program. I currently live and work in Flagstaff, AZ but plan to relocate back to Mequon, where I grew up. Does anyone have any lead on quality outfits up there? Thank you–Fred H.
Why doesn’t a utility or co-op start providing solar installations for free or low cost or ongoing low monthly charge, and then recoup those installation costs over time by owning any excess power generated? The main difference from the current setup would be that, instead of the property owner selling excess generated power to the utility, the utility would be considered the owner of the power and could sell excess to other users. The utility makes money off by selling the property owner energy in excess of the system’s capability, also by selling to other customers the electricity generated in excess of the property owner’s usage. After the installation costs, there is relatively little cost to the utility for 25+ years (not much more than there would be for a traditional customer).
This could be a way to overcome the up-front costs and paperwork that many individuals cannot manage but that a utility or co-op could build into its long-term financing.
I used to work for a company that was trying to be a solar powered utility company. We built and installed Hydronic Solar systems to Schools to heat their pools. Basically we would install a system that would cut their heating bill by 50% but then we would charge them 25% so the customers bill would go down 25% total and we would end up with 25%. The problem was that we were spending way more putting the systems in than we were getting back every month.
I have a home in northern Wisconsin which is off grid. I want to refinance so I can install a solar system. To run power into my property would cost 30k. The power line would have to pass through state and conservency (sp) land. That could take years to get permission to run the line, if ever. Why haven’t the Fed’s changed the underwriting procedures so a person can get the needed money? Every time you turn on TV or look at a newspaper or magazine that’s all you read about “going green”.
My home currently has solar hot water and we supplement the heat in our shed workshop with solar. We are looking at putting in a 9kw tracker system in the near future. It is a growing business in this area and we are seeing more property owners investing in their futures. I want to be comfortable in my retirement and see this as a way to help the environment and eliminating the utility bill at the same time. Sure it’s an big investment but it’s also our future and the incentives are out there from the Feds and Focus on Energy in this area to do it.
I live in East Troy, Wi. I wish to have someone explain the entirety of a solar installation at my home including cost and cost benefit.
Please contact me if you are in the business as above.
Hi David,
Sign up here and a contractor should get in touch with you. http://solarpowerrocks.com/free-solar-estimates/
East Troy resident interested in solar information as in previous post. I forgot to include Edrress.
Davidz@wi.rr.com