From lowering your carbon footprint to mitigating power outages when paired with battery storage, there are many benefits to going solar. But it’s often the money-saving potential of solar panels that appeals most to homeowners across the U.S.
In Nevada, those financial perks include a federal tax credit and a strong net billing policy that allows residents to sell their excess solar energy for credits on their electricity bills. In this article, we’ll explain the available NV solar incentives and how they work so you can make a more informed decision about investing in solar power.
(Note: Your eligibility can depend on your tax liability. This article is not tax advice, and you should always consult a tax professional.)
Nevada Net Metering Program
Most Nevada residents who install a solar energy system on their homes will be eligible for net metering. In general, net metering is a billing mechanism that allows you to earn credit toward your electricity bill for any excess solar energy you don’t use and send to the grid.
That’s right—not only can you become your own clean energy provider, but you can also spread the benefits of solar energy to your local community, and get compensated for it!
The details of net metering can vary by state and even utility. In Nevada, 93% of residents receive electricity from NV Energy, an investor-owned electric utility company. NV Energy is required by legislation to offer nearly 1-to-1 net metering for excess production in the same monthly billing cycle.
This means the credit NV Energy offers is almost the same value they would otherwise charge for electricity. If you have any remaining kilowatt-hour credits from your solar system on your account at the end of the billing cycle, they will roll over to the next month at approximately 75% of the retail rate.
There are a few unavoidable billing items that these credits cannot be applied to, such as the Basic Service Charge and Renewable/Energy Efficiency Programs. Learn more and view a sample net metering calculation from NV Energy for more information about how this system works.
NV Energy Storage Incentive
Nevada is one of few states where it pays to purchase battery storage with your solar panels. NV Energy offers an incentive for energy storage devices when paired with solar:
- For customers with time-of-use rates, the utility offers up to $3,000.
- For customers with the standard rate, the utility offers up to $1,500.
Time-of-use (TOU) rates are electricity rates that change in price based on the time of day when you consume electricity. Utilities charge more during the time of the day when demand for power is higher, like on hot sunny days, or late afternoons and early evenings. During periods of low demand, like late at night, electricity is priced lower as the more expensive power plants do not have to run to meet customer demand.
For customers who want to try out time-of-use rates, NV Energy is currently offering a “no risk” trial. Per the utility’s website, after the first 12-month period if you find that you spent more on the TOU rate than you would have spent on the standard rate, they will refund the difference and restore you to the standard rate (if you choose).
Federal Solar Investment Tax Credit (ITC)
Most Nevada residents are eligible to claim the Federal Solar Investment Tax Credit—also called the solar ITC. In 2022, eligible homeowners can deduct up to 26% of the cost of their solar panel installation from their federal income taxes.
Battery storage when paired with solar can also qualify for the ITC. Many Nevadans are pairing battery storage with solar to enjoy the benefits of both the solar ITC and battery storage incentive discussed above.
It’s important to note that tax credits are not a refund or a rebate. Rather, homeowners will need to have federal tax liability (i.e. they must owe taxes) in order to benefit.
The ITC will eventually expire, and in 2023, the tax credit will be reduced to 22%, making the ever-important decision to go solar that much more timely.
To learn more about the ITC, visit our article on Everything You Need to Know About the Federal ITC.
Go Solar in Nevada with Palmetto
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