7 factors to consider before getting solar panels in Nevada

We’ve talked to hundreds of people who have already gone solar in Nevada. It’s generally worth it if you like the idea of lowering your monthly utility bills, helping the environment and gaining more energy independence. But it doesn’t work out for everyone. Here’s what to consider before making the switch. 

1. Solar panel installation costs
2. Your energy consumption
3. How long you live in your house
4. Nevada solar incentives
5. Net metering buy-back rates
6. The solar company you hire
7. How you pay

1. Solar panel installation costs: $10,000 to $30,000

Average solar panel costs in Nevada are relatively low compared with other states. Before the federal solar investment tax credit (ITC), a typical residential system ranges from $11,000 to $22,000. That price drops to $7,700 to $15,400 after the full 30% tax credit.

Most installers set the price according to the system's wattage, with a typical cost between $2.50 and $5 per watt. “Cost per watt” is a little like looking at the price per square foot when you buy a house. It helps you compare the value of solar energy systems in different sizes. In Nevada, the average cost per watt is only $2.20.

Average solar panel installation cost by system size in Nevada

2. Your current energy consumption

Look at your latest utility bills to see how much electricity your house needs each month. Then, you can calculate your potential savings and payback period. In Nevada, solar panels usually pay for themselves within 8 years.

A typical Nevada household needs a system with a capacity of 9.44 kW to offset its electricity needs with solar energy. You might need a larger or smaller system, depending on your current energy consumption.

Given rising energy costs in Nevada and elsewhere, financing solar panels makes sense as long as your monthly loan payment is less than what you would be paying the utility company anyway. Solar panels essentially generate “free” electricity once the initial installation costs are paid for.

3. How long you plan to stay in your house

Buying solar equipment is expensive, and it takes five to 10 years to recover the initial investment through savings on electric bills. If you sell your house and move before then, you might not fully realize the financial benefits of your solar panels.

Solar panels typically pay for themselves within five to 10 years.

A Zillow study found that, on average, houses with solar panels sell for 4.1% more. Let’s say you spend $25,000 putting solar panels on a house that costs $400,000. It might sell for $16,400 more in a few years. Over 25 years, Nevada homeowners with solar panels avoid $41,459 in utility costs on average.

In other words, don't get solar panels just because you want to sell your house soon. Instead, consider a home improvement project with a better return on investment, like remodeling the bathroom or kitchen.

4. Nevada solar incentives: tax credits and net metering

The federal solar investment tax credit (ITC) is a major incentive that reduces the upfront cost of going solar in Nevada. The ITC provides a 30% tax credit on your total system costs, including equipment, labor and permits.

Don’t get confused: The ITC is not a rebate or a refund. It is a credit that goes toward what you owe on federal income taxes. It can only offset the taxes you owe. The ITC drops to 26% in 2033 and 22% in 2034. Residents may also take advantage of more solar incentives in Nevada, like portfolio energy credits and net metering.

5. Buy-back rates in Nevada

Net metering lets you sell extra energy generated by solar panels back to the local power grid. In Nevada, power companies are required to purchase a portion of energy from customers with solar panels. Eligible residents are compensated at 75% of the retail rate for electricity. The payment comes in the form of credits on your electric bill.

The buy-back “retail rate” is a combination of the Base Tariff General Rate (BTGR), Base Tariff Energy Rate (BTER) and Deferred Energy Accounting Adjustment (DEAA) rate. Systems under 25 kilowatts are eligible. For more information about rates and charges, reference NV Energy’s fact sheet for northern Nevada or southern Nevada.

The alternative to net metering is to store solar energy in a battery. That way, you can still turn your lights on when panels aren’t generating electricity, like at night or on especially cloudy days. The biggest downside there is that solar storage battery costs can be almost as high as the panels — $7,000 to $18,000.

6. The solar company you hire

People have mixed experiences with solar companies. In the best-case scenario, it’s easy and you’re happy with the system’s performance. In the worst-case scenario, you end up paying thousands for midtier solar equipment from a company with poor customer service and no follow-up or support.

One of the most common complaints we hear about solar companies is related to pushy sales reps who make promises that can’t be delivered.

That’s why it’s so important to thoroughly research and verify claims made by sales teams before making a decision. Use the National Renewable Energy Laboratory’s PVWatts Calculator to estimate how much electricity a solar panel can produce over a year on your house — just type in your address. Project Sunroof is a free solar savings estimator powered by Google Earth imagery.

7. How you pay

If you can afford it, buying your solar energy system outright typically provides the highest return on investment. Of course, paying cash is not always an option. That’s when loans, leases and other agreements come into play.

• Solar loans: A solar loan works like any other type of loan. It has a relatively low interest rate, since the solar panels secure the loan. Once you pay it off, you own your solar panels outright.
• Leasing options: Leasing panels is one way to get the benefits of solar energy without the high upfront cost. A solar lease works like a car lease — you get to use the panels but don’t own them. Leasing can be good if you have limited savings. Solar lease agreements typically last 20 to 25 years.
• Power purchase agreement: Similar to leasing, a power purchase agreement (PPA) can let homeowners install solar panels without the upfront costs. You sign a long-term contract with a solar services provider to purchase the electricity generated by the panels at a predetermined rate. The provider owns and maintains the panels throughout the agreement, while you benefit from lower monthly energy bills. Contracts typically range from 10 to 25 years.
• Home equity loans or lines of credit (HELOC): These let eligible homeowners borrow against equity in their house to finance a solar panel system.

Monthly costs: Solar payments vs. savings

Think of going solar in terms of your monthly costs. For example, one solar customer told us they are saving $40 on their electricity bill, but considering their loan payment is about $120, their total monthly payments actually went up by about $80.

Is my house a good candidate for solar panels?

In Nevada and elsewhere, going solar ends up being worth it for many homeowners as long as their home is a good candidate to support a solar panel installation. Here’s what to think about before you commit:

• How old are your appliances? The first thing is to make sure your electrical loads are as small as can be. For instance, if you have an older refrigerator or air conditioning unit, it’s smart to upgrade those before investing in solar panels.
• How much sunlight do you get? Solar panels need regular exposure to sunlight to produce the most energy possible. On average, Nevada gets 6 to 7.5 peak sun hours each day, but lots of shading — like trees or tall buildings above your roof — could make them less efficient.
• What is the size and angle of your roof? Nevada (and the rest of the United States) is in the Northern Hemisphere, so solar panels perform best on south-facing roofs. The worst place to install would be on north-facing roofs, especially if those roofs have a high pitch. For example, if the only place you can install is a north-facing roof with a 30-degree pitch, your costs will go up by 30% to 40% because you’ll need more panels.
• What is the condition of your roof? If you have to replace your roof, do that before you install solar panels. Solar panels are designed to last up to 30 years, so you want your roof to last just as long. Otherwise, it could cost thousands to remove the panels, fix your roof and reinstall the panels again.

» COMPARE: Best roofing companies

Pros and cons of solar panels in Nevada

Nevada is a pro-solar state in terms of both regulations and economics. The sunny climate maximizes the amount of power produced by solar panels, but you can expect some seasonal fluctuation in how much energy your panels produce.

Benefits of solar panels in Nevada

Solar power is a renewable energy source that does not produce greenhouse gas emissions or other pollutants. Solar panels require little maintenance and can increase the property value of homes.

• Cheaper energy bills: The average homeowner in Nevada uses a lot of power, which adds up to a lot of savings when you switch to solar. With electric rates throughout Nevada increasing, especially in the Las Vegas area, going solar now means that your monthly energy expenses will be more predictable (and very often significantly lower).
• Higher home resale value: Installing solar panels can significantly increase a home's value. According to a study by Zillow, homes with solar panels sell for 4.1% more on average. The exact increase in value varies by location, with homes in active solar markets seeing higher boosts.
• Better for the environment: Traditional energy sources like coal and natural gas release carbon dioxide and other harmful pollutants into the air. Solar panels generate electricity from sunlight, a clean and renewable energy source. Installing solar panels on your roof helps the environment primarily by reducing greenhouse gas emissions and dependence on fossil fuels.
• Pro-solar policies: Nevada has had net metering as far back as 1997. The state boosts rooftop solar in other ways, too. Consumer protection officials in Nevada are taking steps to protect customers who purchase residential rooftop solar systems against unscrupulous sales pitches, and a statewide nonprofit has applied for up to $250 million in federal Solar for All funding.

Drawbacks of solar panels in Nevada

The main drawback of solar energy is the high upfront cost of purchasing and installing the panels and equipment. Solar panels also do not generate electricity at night. So, to keep your lights on, you have to either enroll in net metering or get a storage battery.

• Solar panels are expensive: Even with rebates and other financial incentives, the price typically starts between $10,000 and $30,000. It’s even more expensive if you want a solar battery for energy storage.
• Energy production varies: Solar panels are dependent on weather conditions and available sunlight, meaning their performance can fluctuate with cloud cover or shading from trees and buildings. Seasonality also affects how much energy they can produce.
• Problems with pigeons: Multiple Nevada residents tell us about pigeons nesting in their solar panel array. This problem can be solved by putting up barriers, which adds to the overall costs — as much as $1,500, according to Rick in Henderson.
• Some solar companies are sketchy: Like in any booming industry, some salespeople want to make a quick buck and might say anything to close a sale. It’s important to read your contract carefully, especially if you finance or lease a system. Unfortunately, if you’re not dealing with a reputable company, you might not get the deal you expect.

» MORE: Solar energy pros and cons

Find solar companies in Nevada

A good solar company helps you navigate local incentives, permitting and net metering policies. Compare our picks for the top solar companies in Nevada to learn more.

Bottom line: Is going solar in Nevada worth it for you?

Buying solar equipment is expensive, especially if you need a battery for storage. It takes time to recover this initial investment through savings on your electricity bills. If you plan to move before recovering these costs, you might not fully realize the financial benefits of your solar panels. The payback period is typically five to 10 years, depending on your installation costs and current utility rates.

For some, it’s worth it as long as their cost savings over time outweigh the initial investment. Others are happy to go solar for the environmental benefits alone. A typical residential solar panel installation costs $7,700 to $22,000, depending on the size of your system and what financial incentives you qualify for. Over 25 years, Nevada homeowners with solar panels can avoid about $41,459 in total utility power costs.

If you can, it’s often financially strategic to pay for the whole thing upfront. You own the system from day one and receive the benefits of available tax credits, and you don’t have to pay interest on a loan.

» EXPLORE: Solar energy statistics