Georgia Solar – Everything You Need to Know

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Information about Solar Panels in Georgia

Let’s not beat around the bush: it’s hard to save money going solar in Georgia. The once-wonderful GA solar state tax credit is now expired, utilities aren’t required to offer net metering, and there are very few financial incentives or rebates to drop the total investment cost.

However, with some good planning and by taking advantage of the federal tax credit, you can still save money going solar in Georgia. Take a look below for savings estimates as well as information on solar policy and incentives to help you on your solar journey.

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#1 Are Solar Panels Worth it in Georgia?

C
Overall Grade
14 years Avg. Payback Time (For Cash Purchase)
5.9 % Estimate IRR (Return on your investment on cash purchase over 25 years)
$13,579 Your Net Profit Over 25 Years (Cash Purchase)

* Note that these are estimated values for informational purposes only, and do not take into account the full complexity of all financial projections. They also only apply to cash purchases, which means your numbers will be different if you lease your system or pay for it with a loan (factoring in interest). Also note that we are not financial advisors, so this information should not be construed as financial advice.

The state of Georgia’s done a few great things for solar: legalizing leases and PPAs, creating solar easements, setting interconnection standards. However, if Georgia really wants to get serious about solar, it needs to consider adopting RPS mandates, net metering incentives, and a few tax exemptions as well.

Up until recently, the state offered an incredible state tax credit for solar homeowners. Unfortunately, that tax credit is now expired. All of this leads us to give Georgia a C for solar.

#2 Options for Buying Solar Panels in Georgia

Georgia doesn’t have the tax credits, exemptions, and rebates that make going solar such a great decision in other states. You need to choose your financing wisely so you can scrape the bottom of the barrel for every last dollar.

Cash Upfront

If you’re interested in saving money, cash upfront is definitely the way to go. You don’t pay interest, you don’t make lease payments, and you get the 30% federal tax credit to lower your total installation cost. Of course, these big savings aren’t free – you’ve got to foot that high initial bill before you can start seeing any savings.

How much does solar cost in Georgia? If you install an average-sized 5kW installation, you’re looking at paying $12,926 after the federal tax credit. That’s a lot of money, but once it’s installed you’re ready to start saving money! After 25 years (the estimated lifespan of solar installations), you’re looking at $13,579 in net savings, with a payback of 14 years.

About $14k in net savings from a $13k investment is pretty good, but there’s a big catch to this number. For this savings estimate above, we are assuming you can use 100% of all the electricity you produce in your own home, without putting any back into the grid.

The state of Georgia doesn’t require utilities to offer net metering incentives (more on this in the section below), so any electricity you don’t use (for example, on a beautiful day when you aren’t home to use it) goes into the grid potentially without compensation. Georgia Power does offer net metering incentives, but they pay only $0.04 per kWh (whereas you probably pay around $0.12/kWh).

Bottom Line: Your actual savings are going to depend on both your utility’s net metering incentives (if any) as well as how much of your solar electricity you can actually use. The more of your solar power you use (and the less you pull from the utility), the faster you’ll see a return on your investment!

Leases

In 2015, the state legislature passed a law finally allowing solar leases and power purchase agreements (PPAs) in Georgia. Leases allow homeowners to go solar for no money down, so they can start saving from day one. Leases are the financing mechanism that allowed residential solar to explode in popularity in the late 2000s; for years, they were the dominant financing type (ownership has now taken its place).

While you save money from the get-go with solar leases, your total savings are going to be lower than with cash and likely with loans as well. After the installation is complete, you make monthly payments to your solar installer over the life of the agreement (typically 20 years).

At the end of the contract, you can either choose to have the panels removed, continue the lease year-to-year, or purchase the entire system at a very low cost (since it’s nearing the end of its useful life).

While leases and PPAs are now legal in Georgia, national installers like Sunrun and SolarCity, who make their money on leases and PPAs, have yet to enter the state. This is likely due to the lack of net metering; it’s simply too hard for homeowners to save money with a solar lease without any net metering incentives!

Bottom Line: In all honesty, your best bet going solar in Georgia is to simply pay cash or find a low-interest loan.

More: Solar Leases

Loans

As more homeowners are seeing the benefits of solar ownership, loans are becoming an increasingly popular option to own your own system. You successfully avoid cash purchase’s high upfront cost but get to enjoy the tax credits and other perks of ownership.

Savings will, of course, be lower than with a cash purchase. Installing the same 5kW installation, but financing with a 15-year loan with 5% interest, you’ll pay a grand total of $20,745 after the federal tax credit ($7,819 interest + $12,926 installation cost).

With a loan, savings hover around $5,760 with a very long 21-year payback period. Keep in mind that this savings estimate also doesn’t take into account Georgia’s lack of net metering incentives.

Obviously, if you pay your loan off faster (maybe with your fat tax return?) your interest payments and total investment decrease accordingly.

Bottom Line: Going solar with a loan can save you money, but you’ll need to do your own estimates to find out exactly how much you can save.

More: Solar Loans

#3 Georgia Solar Policy Information

While Georgia has passed several policies to help the growth of solar, their overall solar policy framework is lacking.

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Renewable Portfolio Standard

States that want to get serious about encouraging renewable energy typically set a renewable portfolio standard (RPS), which is simply a goal that XX% of electricity sold in the state must come from renewable sources by a certain date.

RPS goals are the single most important piece of legislation to push the renewable energy industry forward. Without them, utilities find little reason to actively install and promote renewable energy.

29 states have passed RPS goals, with Hawaii being the most aggressive at 100% renewable by 2045. Unfortunately, Georgia has not yet adopted any RPS goals.
More: Renewable Portfolio Standard (RPS)

Electricity Prices

Electricity prices are a key component in estimating savings from solar. It’s pretty simple really: the higher the utility rates, the more money you can save by producing your own electricity and avoiding those high rates.

Georgia’s average utility rate of $0.116 per kWh is just under the national average, $0.128, much lower than New England’s $0.192, and drastically lower than Hawaii’s staggering $0.293 per kWh (though to be fair, every state is drastically lower than Hawaii).

However, Georgia’s electricity prices are higher than nearby Tennessee’s $0.105 and Mississippi’s $0.112 per kWh.
All this is to say, with Georgia’s average electricity prices, you’re able to recoup your solar investment in a fairly short time.

Net Metering

Net metering is not so good in Georgia. Under state law, Georgia utilities can – but aren’t required – to offer net metering.

Installations up to 10kW can be connected, and any excess electricity you contribute to the grid is credited to your account at a rate approved by the Georgia Public Service Commission (the organization that controls the private-entity utilities like Georgia Power).

Under their Solar Buy-Back program, Georgia Power offers to purchase (via bill credits) any electricity produced by residential solar installations at the utility’s avoided cost, which is the amount it would cost to produce that electricity, currently set at $0.044/kWh in 2017. This means that if you produced an extra 100 kWh this month, Georgia Power would credit your account for $4.40.

Other states – including nearby South Carolina – require utilities to offer full retail rates for excess electricity. This means that if you pay $0.10 per kWh, the utility will pay you the same amount for your excess electricity. With Georgia’s non-existent or very low net metering rates, homeowners’ ability to save money going solar is greatly hampered (though, of course, not impossible).

More: Net Metering

Interconnection Rules

All in all, it’s pretty easy to gain your utility’s approval to connect your solar installation to your utility grid, a process known as interconnection.

Under a state law passed in 2001, homeowners can connect solar installations under 10kW to the utility grid. The state bans utilities from requiring any testing or liability insurance to connect to the grid, and customers aren’t required to install any additional safety disconnects (a common requirement for larger-scale solar installations).

Your installer will typically fill out and submit all the interconnection documents for you, so this process isn’t really something you need to worry about in the first place!

Homeowners Associations

For solar panels to function at their max, you need to have an area with unobstructed sunlight and little to no shade. This can sometimes cause issues. What if a tree grows right in front of your panels? If it’s on your property, you can just trim the tree or cut it down. But what if it’s on your neighbor’s property? What do you do then?

To protect solar homeowners’ access to sunlight, the state of Georgia passed the Solar Easements Act of 1978. This act allows homeowners to create an easement for the airspace in front of their solar panels so neighbors, builders, or anyone else can’t build or plant trees that would hinder sunlight from hitting the solar panels.

The solar easement is a great policy to protect solar homeowners, but it’s only half of the equation. Many states looking to encourage solar also protect solar homeowners from cranky HOAs, local governments, or other organizations that seek to ban solar installations. Under many state laws, these organizations are forbidden from banning solar. Unfortunately, Georgia has yet to pass any similar laws.

Georgia took a great first step back in 1978, but it’s time to take that next step to further protect solar homes!

#4 Financial Incentives, Rebates, and Tax Credits for Georgia Solar

Beyond the federal tax credit, solar homeowners in Georgia aren’t eligible for too many incentives.


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Federal Tax Credit

The federal government offers a tax credit worth 30% of the cost of the installation to any homeowner who installs solar. As a tax credit, not a deduction, it’s equal to a dollar-for-dollar discount on your total installation cost. So if you paid $15,000 for your installation, your tax credit will be $4,500.

You can claim this credit the next time you file your taxes, and it can be broken down and claimed over several years if your tax liability isn’t enough. The credit was originally set to expire in 2016, but federal lawmakers extended it until 2019, where it slowly drops to 22% in 2022, after which it falls away completely.
More: Solar Federal Tax Credit

State Tax Credit (Expired)

Many states offer state tax credits to further encourage local residents to install solar. South Carolina, for instance, offers a 25% state tax credit. Oregon offers state tax credits up to $6,000 for solar installations.
Georgia used to offer a 35% tax credit for solar installations, with a cap of $10,500, but unfortunately, it is now expired.

Utility Based Incentivesgeorgia-power

Utility incentives for going solar are scarce. We found 2 electric cooperatives – Central Georgia EMC and Jackson EMC – that offer rebates of $450 per kW, up to $4,500, for residential solar installations. This means an average 5kW installation would net a $2,250 rebate.

Both of these coops are part of the Georgia EMC coop, so if your utility is also in the organization, be sure to reach out to them to see if they offer any solar rebates!

TVA Green Power Providers

TVA in northern Georgia offers an alternative to net metering through their Green Power Provider program. Instead of offering credits only for excess electricity, TVA requires that 100% of the electricity produced by solar installations must be put into the grid. TVA then pays you the full retail price for all the electricity your installation produces for the next 20 years.

As we already mentioned, utility rates increase little by little each year and TVA’s program allows you to benefit from this – you’ve paid a set price for your solar installation, but your payments for each kWh of electricity will continually increase as electricity rates go up. Keep in mind, though, that you don’t get the satisfaction of using your own renewable energy!

The following three TVA-affiliated utility companies offer the Green Power Provider program in Georgia:

  • Blue Ridge Mountain Electric Membership Corporation
  • North Georgia Electric Membership Corporation
  • Tri-State Electric Membership Corporation

Property Tax Exemption

Georgia does not offer any property tax exemptions for solar. Tax exemptions are just a small part of a strong pro-solar policy and many states have passed tax exemptions to further stem solar growth in the state.

While property tax exemptions for solar installations typically amount to just $100 for the first year, every little bit of savings means a faster rate of return on your investment!

Sales Tax Exemption

Many states also offer sales tax exemptions on solar equipment and installation costs. We often don’t think about the cost of sales tax, but it can really add up! Georgia does not offer any sales tax exemptions for solar.

With Georgia’s 4% sales tax rate, if the state passed a sales tax exemption, you could avoid paying a hefty $600 for a 5kW installation. That seems pretty worthwhile to us!

General Increase in Home Value

Beyond saving you money on electricity, solar can increase the value of your home – as long as you own the installation. A study from the Lawrence Berkeley National Lab (LBNL) of home values in 6 states (not including Georgia) found that solar adds around $4.51 per watt of value to your home – as long as you own the solar installation.

If you purchased a 5kW system in cash or through a loan, it can bring in around $20k depending on the age of the installation. In a separate study of southern California home values, LBNL also found that leases and PPAs brought no additional value to the home (though they didn’t subtract from the home value either).

Certainly keep this in mind when you are deciding on how to finance your solar installation!

More: Buyers Will Pay More for Solar Homes

If you’d like to dig even more on local incentives and rebates, check out the DSIRE database.

#5 Atlanta Solaratlanta-georgia

Going solar in Atlanta isn’t any different than in other areas. Georgia Power, Atlanta’s electric utility, must follow all the net metering and interconnection laws. Atlanta homeowners are obviously eligible for the federal tax credit and can take advantage of Georgia’s solar easements as well. Unfortunately, neither Georgia Power nor the city of Atlanta offers any additional incentives for going solar.

One important consideration is Georgia Power’s utility rates, which are quite different from the state averages we mentioned above. First off, Georgia Power charges residential customers a $10 monthly service charge regardless of how much electricity you use.

This means that even if your solar system produces 100% of your electricity in a month, you’ll still have to pay Georgia Power $10. This charge covers the utility’s costs to maintain their grid, which includes all their wires, poles, etc. Obviously, $10 a month adds up over 20 years and it can really dig into your solar savings.

For the most accurate savings estimate, we recommend talking to a few different local installers who’ve worked with Georgia Power before. They’ll be able to create a customized savings estimate for you that takes into account the $10 fee as well as Georgia Power’s seasonal utility rates, which are higher in the summer.

What to Do Next?georgia-school

Should you go solar in Georgia? Yes, but only if it makes sense for you. Consider how much money you can put in up front, how much electricity you can use, and what kind of return you need to see to make it worthwhile. Local installers are your best friends in all this. They can estimate savings, assess different financing, and help you find all the incentives to drop your total installation cost as much as possible.

Image Credits under CC License via Pixabay - 1, 2, 3, & Flickr - 4, 5, 6

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