The complete list of Missouri solar incentives and tax credits for 2023, plus how to take advantage.
Table of Contents
Missouri’s relatively low cost of electricity and below-average peak-sun hours might make home solar seem like a losing prospect in the Show Me state. In reality, the cost of going solar in Missouri has decreased by more than 50% in the last decade, according to Solar Energy Industries Association (SEIA).
Homeowners in Missouri can access a variety of good solar incentives, including utility rebates, net metering, property tax exemptions, and low-cost solar loans. Missouri legislators also passed a sales tax exemption (for commercial purchases only), which may be a sign of more pro-solar legislation to come.
Missouri State Solar Incentives
|SRECs in Missouri||Missouri has a renewable portfolio standard with a solar carve-out but most utilities no longer buy SRECs from residential customers|
|State sales tax exemption||Missouri enacted a state sales tax exemption in August 2022, but only for companies installing solar, not residential purchases|
|State property tax exemption||Missouri allows homeowners to claim an indefinite exemption for property taxes associated with increased value after installing solar|
|Utility solar rebates||Major utilities in Missouri offer considerable rebates for residential solar, up to $6,250 in some cases|
|Net metering||Net metering is mandated by law in Missouri and credits customers one-for-one and then at avoided cost rate for excess exported energy|
|Solar loans in Missouri||PACE financing is legal in Missouri, and the utility CWL also offers low-cost loans for customers installing residential solar|
SRECs in Missouri
Missouri has a solar carve-out for its Renewable Portfolio Standards, but the market for SRECs in the state is yet to take off. This is unsurprising, given the relatively low targets laid out for solar and renewables overall in Missouri.
The Missouri Clean Energy Act was approved by the state’s voters in November 2008. Known as Proposition C, the act repealed the state’s existing voluntary renewable energy and energy efficiency objective, replacing it with a mandatory renewable portfolio standard (RPS). The RPS required investor-owned utilities to produce 15% of annual retail electric sales from eligible renewable energy technologies by 2021. The RPS included a minimum goal of just 2% of annual requirements from solar, working out to 0.3% of sales in 2021.
The introduction of the RPS also required utilities to offer a solar rebate program for the first 25 kW of installed capacity, up until June 30, 2020. In return, the utilities got the rights to the solar renewable energy certificates (SRECs) generated by those systems for a period of 10 years.
SRECs remain valid for three years after production, which means Missouri’s utilities are reaching a point where they will need to produce their own solar energy to meet the requirement or purchase more SRECs. It’s not clear what this means for the Missouri SREC market, nor if there will be changes to the Missouri RPS now that those 2021 targets have been met.
Utility solar rebates in Missouri
Several utilities offer solar rebates in Missouri. The Public Utility Commission has ruled, however, that receiving a rebate necessitates transferring your RECs to the utility for 10 years from installation and initial operation of your solar energy system. Customer-generators with a net-metered system retain title to RECs unless they also participate in the solar rebate program.
Columbia Water & Light provides rebates for PV systems. Rebate tiers are additive and comprise $375 – $625 per kW for systems sized 0-10 kW; $300-$500 per kW for capacity of 10-50 kW; and $150-$250 per kW for capacity of 50-100 kW. CW&L offers a premium solar rebate for systems designed to produce the most power during the utility’s peak demand hours.
KCP&L Evergy also offers solar rebates for customers in Missouri. For residential PV installations connected to the grid before December 31, 2023, the rebate is worth $0.25/W, capped at 25 kW (or $6,250) for residential customers. The rebate is also available for commercial customers for systems up to 150 kW.
The utilities Ameren and Liberty offer similar solar rebates for systems up to 25 kW that become operational on or before December 31, 2023. The rebate is $0.25 per watt for systems that become operational through December 31, 2023.
State sales tax exemptions in Missouri
Missouri does not offer a state sales tax exemption for residential solar energy systems at this time. However, the Missouri Senate bill SB 881 goes into effect August 28, 2022, and authorizes a sales tax exemption for the purchase of certain solar energy systems for commercial purposes.
SCS/SB 881 specifically allows for companies to claim an exemption from state sales tax for purchases of solar photovoltaic energy systems and supplies used directly to make improvements to such systems. The caveat is that these systems must “allow for energy storage, include advanced or smart meter inverter capacity, or allow for utility scale projects greater than twenty megawatts.”
Given the passing of this bill, there’s a chance a state sales tax may be enacted for residential solar purchases. There is currently no such bill proposed, however, so homeowners in Missouri shouldn’t hold their breath waiting for a state sales tax exemption.
State property tax exemptions in Missouri
Missouri offers an exemption for state, local, and county property taxes associated with solar installations. This includes residential solar arrays, with homeowners able to claim the exemption each year, indefinitely.
Solar loans in Missouri
Homeowners in many places in Missouri can access Property Assessed Clean Energy (PACE) financing programs for residential solar. Though supported by legislation in the state, PACE programs are funded using private capital. The loans are repaid through the same mechanism as annual property taxes.
Customers who are eligible for PACE solar financing can access up to 100% upfront financing for home solar at a fixed interest rate for up to 20 years. PACE financing doesn’t affect your credit score as the loan is attached to a property rather than an individual. Under these programs, most repayment schemes don’t start until 12 months after financing.
PACE financing is only available in select cities and counties in Missouri, however. This is because your local government needs to have approved an ordinance authorizing Show ME PACE to use the property assessment process to repay the loans. The program administrators maintain a list of Missouri municipalities that have joined Show Me PACE.
The Missouri Energy Savings Program (MO-ESP) is one example of a municipality offering PACE funding for home solar. This program is available to St. Louis County property owners looking to install residential solar or carry out energy upgrades to their homes.
Columbia Water & Light (CWL) offers low-interest loans to residential and commercial customers for installing PV systems and solar water heaters. The maximum loan is $15,000 for residential and $30,000 for commercial customers, with 1% interest on a 3-year loan, 3% interest on a 4-5-year loan, and 5% interest on a 6-10-year loan.
Customers wanting to take advantage of CWL’s solar loan program must meet certain requirements, however. These include being a CWL customer, owning the property, having a deed of trust, and having a good payment history with the utility and property tax payments. In addition, customers must have their home assessed for and meet certain minimums for insulation.
Net metering in Missouri
Net metering is mandated by law in Missouri at a one-to-one rate for residential solar customers (see the Net Metering and Easy Connection Act). The law stipulates that utilities cannot charge solar customers any fees they don’t otherwise charge non-solar customers. This means there is no Demand Charge or such for solar customers in Missouri.
Evergy offers net metering options for its customers who install solar at home. This is at a one-for-one rate within the month and any excess exported energy is then credited to future months at the utility’s avoided cost rate (lower than retail rate). Any remaining credits expire after 12 months, as per the state’s net metering law.
Final thoughts on state solar incentives in Missouri
Missouri is a mixed bag for solar incentives. On the one hand, the state’s utilities continue to offer significant rebates to homeowners installing residential solar. On the other hand, the state doesn’t currently exempt solar equipment from sales taxes, unless it is bought by a commercial entity rather than an individual.
Missouri also allows for low-cost solar loans through PACE and offers property tax exemptions, but its renewable portfolio standard leaves a lot to be desired. Homeowners in Missouri can still take advantage of decent net metering laws to help offset the cost of going solar, though they’ll want to switch the annual billing period to start just after the highest consumption months.