Wyoming Solar – Everything You Need to Know
Information about Solar Panels in Wyoming
Its reputation as the Cowboy State might have something to do with the current "Wild West" status of the Wyoming solar industry, as there's not much in the way of endorsement or regulation from the state government. More likely than that is the fact that the state's primary industries revolve around mining fossil fuels such as coal, oil, and natural gas.
In other words, local utilities have a plentiful source of cheap raw materials to work with right now, which means they don't have much incentive to look for renewable sources of energy. However, if the state's population adopts a bit of foresight and sees the long-term benefits of renewable resources, that could change.
#1 Are Solar Panels Worth it in Wyoming?
Avg. Payback Time (For Cash Purchase)
Estimated IRR (Return on your investment on cash purchase over 25 years)
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.
#2 Options for Buying Solar Panels in Wyoming
If you have a lot of cash sitting around, paying upfront is certainly your best option to purchase your new solar system, as it offers the most direct value.
Paying in cash, you don’t have to worry about loan interest or complications if you ever want to sell your home before the loan’s paid off.
So, how much will it cost for you to go solar in Wyoming? For a typical 5 kW system, you’ll pay approximately $17,650 total sticker price (based on a few different pricing sources, including the National Renewable Energy Lab). From there, you’ll be able to deduct the 30 percent federal income tax credit of $5,295, bringing the net cost to $12,355. Not a bad savings right off the top!
Using our in-house data as well as sources like the U.S. Energy Information Administration, we can determine that the system will end up producing about 7,938 kWh per year. With electricity costing about $0.11 per kWh in Wyoming, this means you’ll avoid paying the utility about $885 during the first year of ownership, and that number will only go up as Wyoming utilities have historically increased prices at a rate of 3.4 percent each year.
As is the case in some states, Wyoming doesn’t currently offer its residents the ability to lease solar systems from a third-party company.
More: Solar Leases
We understand that not everyone has enough cash in the bank to simply purchase a solar system outright, but that’s okay. Solar loans are a fantastic option that allows you to get started with solar for little to no money down!
If you go this route, you’ll still have ownership of the system, and you’ll own all of the power it produces as well. Just like with the cash option, you’ll be able to either move the equipment when you move or just sell it to the buyer if you decide to move.
While it could seem a little extreme to finance a solar system that costs as much as a new car, don’t forget that, unlike a car that rapidly depreciates, solar will be producing power for you every day, and actually adds value to your home (more on that later).
If we factor in a fairly standard 15-year, 5 percent interest loan into the cash calculations above, you will still be able to make $11,163 over 25 years! You’ll pay off the system around year 18, and the rest of your savings will be pure profit.
More: Solar Loans
#3 Wyoming Solar Policy Information
While many residents could be quite passionate about renewable energy in general and solar power specifically, it is usually up to the state government to outline policy that makes solar attractive. While Wyoming isn’t the worst place to live policy-wise, there are not a lot of bright spots either.
Renewable Portfolio Standard
As with most state-related issues, it is beneficial for the legislature to determine their level of endorsement for solar energy and how best to encourage its adoption. Many states have chosen to adopt a set of rules and guidelines, called a renewable portfolio standard (RPS), that specifies a goal that XX% of any power sold in the state should come from renewable sources by a specific date.
These goals are incredibly important for solar, because it creates a mandate that local utility companies are forced to comply with or risk paying hefty fines. As a result, utilities will subsidize residential solar through rebates, grants, and credits to help meet their quota as efficiently as possible without necessarily having to build their own solar farms.
Unfortunately for the citizens of Wyoming, the legislature has not yet created an RPS. As a result, there’s little push for the solar (and renewable landscape as a whole) industry to grow in the state.
Electricity prices play a huge role in the financial breakdown of going solar, because this is the cost that you will be avoiding if you produce your own power. Think about it like this: the more your local utility charges for electricity, the more you’ll save if you are generating your own. If you feed your extra power back into the grid, you’ve got a chance to save even more!
Wyoming’s electricity rate sits at $.116 per kWh, just a little below the national average of $.125 per kWh (as of the time of this writing). As we saw in our savings calculations above, because of these lower prices, it’ll take Wyoming homeowners a bit longer to recoup the initial solar investment through energy savings than homeowners in other states with higher electricity prices (like California, for example).
Don’t worry though! You’ll still be saving a lot over the long run, as Wyoming utilities have typically increased their rates by 3.4 percent each year. So as utility rates increase, your solar installation will still be producing no-cost, clean electricity, increasing your savings year after year.
Solar systems typically produce a lot of extra energy during the daylight hours, when the sun is shining and everyone is out and about at work and running errands. What happens to this excess electricity?
The system used to determine how solar energy producers will be compensated for any excess power that they provide to the grid is called net metering.
Exactly how much net metering can add to your solar savings depends on the rate that your utility must pay you for that excess electricity and how they handle rolling over excess power from year-to-year.
Wyoming allows each individual utility to decide what their net metering rate is. Wyrulec only offers credits at their avoided cost (the amount the utility itself pays for power generation, typically about 1/3 the retail rate), while Rocky Mountain Power offers net metering customers credits equal to the full retail rate.
On the plus side, residents can roll any excess energy over to the next month with a kWh credit. And, at the end of the year, any excess will be purchased by the utility at their avoided-cost rate.
However, Wyoming caps net metered systems to just 25kW, certainly big enough for most residential systems, but quite stifling for larger commercial installations. We’d would also like to see the 25 kW maximum removed, so that more local businesses could choose to provide their own power through solar energy!
More: Net Metering
Because residential solar systems are like tiny power plants that only function during the day, it makes sense to keep them connected to the local grid. This way, they can send extra energy to the utilities and you can draw power from the grid at night when your installation isn’t producing electricity. Interconnection rules provide the framework for what this connection look likes, who will pay for it, and any other regulations that must be adhered to.
In Wyoming, there is a loose interconnection law in effect that allows systems 25 kW or smaller to connect to the grid using Rocky Mountain Power’s guidelines as a model. Under their rules, the application process is simple, but the resident covers the cost of installing the net meter as well as an external disconnect switch to their system, which adds to the overall price of a solar installation.
Fortunately there is no additional requirement for extra liability insurance, provided that the system complies with the National Electrical Code, so that keeps a couple extra bucks in your pocket.
Solar Access Rights
Many states are eager to spread the adoption of solar and other renewables, and help to show their support for solar through access rights. These ensure that residents and businesses can enter into agreements with neighbors to protect the sunlight that their systems need to stay running. Although Wyoming does have a law in place to protect wind power, it does not currently extend that protection to solar installations.
#4 Wyoming Solar Incentives, Rebates, and Tax Credits
Financial incentives like rebates, tax credits, or exemptions are the best part of going solar. They lower the price of your installation and you pay off your system on paper even faster! Unfortunately for residents of Wyoming, there is really only one incentive to mention — the federal tax credit. Hopefully, a change in political landscape will help bolster offerings in the future!
Federal Tax Credit
The single most significant way to save money on solar, and just about the only way to save in Wyoming, is through the federal residential renewable tax credit. With this outstanding incentive, you can take 30 percent of the cost of your solar equipment and labor costs as a dollar-for-dollar credit on your federal income taxes! So, if you ended up paying $15,000 for your complete installation, you will be able to take credit for $4,500.
This credit is available the next time you file your taxes after your purchase. Although the credit is nonrefundable (you can’t be paid more than you owe in taxes), you can still break it up over several years to get maximum use out of it!
It is important to remember that while this tax credit is impressive, it might not be around forever. The current phase-out schedule was reaffirmed in the recently passed 2018 budget bill (pg. 208).
Starting in 2020, it will decrease to 26 percent, and then 22 percent in the year 2021. Once 2022 rolls around, the credit will disappear forever unless a new bill is passed, creating or extending the credit. So you’ll need to act fast if you want to maximize this tax break!
More: Solar Federal Tax Credit
Wyoming Tax Credits/Rebates
Taking their cue from the federal government, many states have chosen to create their own tax credits and rebates for solar and other renewables to help lessen the cost for adopters. Unfortunately, the lack of a state RPS means that there really isn’t a good reason to offer special rebates at this level to provide extra financial incentives. Also, the fact that Wyoming doesn’t have an income tax means that there isn’t a way to offer tax credits in the first place!
Utility Based Incentives
We’ve already mentioned this many times, but we’ll repeat it: “Renewable Portfolio Standards are crucial!” Without those guidelines for progress in place, there is literally no incentive for utilities to subsidize residential solar production, as doing so costs money and provides them no benefit in the short-term.
If Wyoming were to put some of these mandates in place, utility-based incentives like performance payments and rebates would start popping up all over the place!
Property Tax Exemption
Making additions or renovations to a home is a great way to improve its property value. Unfortunately, those improvements can also mean an increase in property taxes as the state ensures it is getting paid accurately from its residents. As a result, many solar-friendly states have decided to exempt solar installations from this value calculation, so that owners can enjoy the benefits of solar without having to pay extra for the privilege.
Unfortunately, Wyoming does not offer such an exemption. Its residents will need to up their property taxes at some point after adding the solar system. This would be an effective and simple change for the state legislature to make!
Sales Tax Exemption
Similar to a property tax exemption, a sales tax exemption is a simple and cost-effective way for the state to help provide an incentive for residential solar. Because the tax rates in Wyoming ranges from 4 percent to 6 percent, a $15,000 system will result in a $600 to $900 sales tax added on to the total. Unfortunately, Wyoming does not currently offer any such incentive, so its residents will be forced to pony up the extra money!
General Increase in Home Value
Since leases aren’t allowed in Wyoming, you’re left to purchase your solar system either in cash or via loan. Since you’ll own the system outright, you stand to gain significantly from the additional value homeowner-owned solar can bring to a property.
A recent study from the Lawrence Berkeley National Lab (LBNL) covering home values across 8 states (though not Wyoming) found that having such a system can increase home values by around $4 per watt, depending on the age of the installation.
This means that – hopefully – a 5 kW system purchased with cash or a loan will tack another $20,000 onto the value of the home for resale. This is good news for those hoping to preserve the value of their investment and not have to worry about selling their home with a solar system on board – it should pay for itself!
Of course, as Wyoming wasn’t part of the study, its best to check with a local realtor to get the scoop on your area. All research points to great resale value, but you still need to do your homework to be sure.
If you’d like to dig even more on local incentives and rebates, check out the DSIRE database.
#5 Cheyenne Solar Information
Sometimes specific cities within a state will adopt more progressive policies when it comes to endorsing solar adoption. Unfortunately, Wyoming doesn’t really have any standout cities to speak of.
Even capital city Cheyenne is similar to the rest of the state. If you plan on purchasing solar in this city, at least you’ll be happy to know that the area has good sun coverage during most of the year and your system should perform well, despite the fact that there aren’t any extra financial incentives to get you started.
What to Do Next?
Despite Wyoming’s lack of an RPS and no real financial incentives for its residents, going solar can still be a wise and profitable choice thanks to the state’s sunny skies. Installing solar allows you to both save money on your electric bills and help the environment at the same time – pretty cool if you ask us!
Use the information we’ve provided here as a baseline for your future research on going solar, and be sure to check with local installers about the most up-to-date prices in your area. Don’t be shy about asking neighbors about their experiences with solar and how much they ended up paying out of pocket to get an honest evaluation of the project’s worth to you as well!