The complete list of Nebraska solar incentives and tax credits for 2023, plus how to take advantage.
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Nebraska ranks 47th in the U.S. for installed solar capacity with just enough solar to power 7,100 homes, according to the Solar Energy Industries Association (SEIA). This may be because the state doesn’t offer any rebates or residential exemptions for sales or property taxes.
The good news is that Nebraskans can sign up for net metering and may be eligible for a one-time solar rebate, depending on their utility. Nebraska also gets a little more sun than average in the U.S., and with home solar installations increasingly popular in the state (doubling between 2020 and 2021!), the price of going solar in Nebraska has dropped by more than 50% in the last decade.
Nebraska State Solar Incentives
| Incentive | Description |
|---|---|
| Solar rebate in Nebraska | There’s no state solar rebate in Nebraska, but customers of Lincoln Electric Systems utility may be eligible for several thousand dollars in rebates |
| State sales tax exemption | Nebraska waives state sales tax on community solar projects but not residential solar |
| State property tax exemption | There’s no residential property tax exemption for solar in Nebraska, but community solar projects may be able to claim an exemption |
| Net metering | Net metering is mandated by law in Nebraska but with no stipulations. Utilities tend to offer credits at avoided cost rates only |
| Solar loans in Nebraska | The Nebraska Dollar and Energy Savings Loan program offers low-cost loans for customers installing residential solar |
Solar rebate in Nebraska
There are no state solar rebates in Nebraska, but customers of the utility Lincoln Electric System (LES) may be eligible for a one-time rebate when they install solar photovoltaic panels at home. This one-time capacity payment applies for customers who use a solar installer from LES’s Solar Trade Ally Network.
The solar rebate is determined by system size and orientation. As an example, LES suggests a rebate potential of $375 per kW capacity (DC) for south-facing fixed panels. For West-facing or single or dual axis tracking panels, the rebate could be worth as much as $475 per kW installed.
This rebate program is time-limited, but may help solar customers in Nebraska recoup several thousand dollars on their home solar energy system.
Solar loans in Nebraska
The Nebraska Dollar and Energy Savings Loan program offers low-interest loans for residential and commercial energy efficiency improvements and renewable energy projects. The simple interest rates are 5%, 3.5%, or less and have terms of up to 10 years for solar projects.
State sales tax exemption for solar in Nebraska
Nebraska waives sales taxes on renewable energy equipment used in community-based projects. However, there is no exemption from state sales tax for the average homeowner installing solar.
Property tax exemption for solar in Nebraska
There is no specific residential property tax exemption in Nebraska for value added by solar installation. However, residential customers who subscribe to community solar projects get an indirect benefit thanks to an exemption granted to systems with a capacity of more than 100 kW.
Net metering in Nebraska
Nebraska mandated net metering in 2009, with the passing of LB 436. The law received strong support in the legislature, but doesn’t set compensation standards. As such, most utilities pay less than retail rate for excess energy. Two bills proposed in 2021 look to alter net metering, but neither has been passed into law, with little movement on either since they were first proposed.
The Omaha Public Power District utility offers net metering to its customers. There is a meter charge of $4 per month, with buy-back rates ranging from 2.73 cents per kWh to 5.40 cents/kWh at peak and non-peak hours and during summer and non-summer.
The Nebraska Public Power District also offers net metering with customers compensated at a rate of 8.63 cents per kWh from June 1 to September 30 and then at a rate of 5.07 cents per kWh the rest of the year.
Perennial Public Power District also offers net metering to its solar customers who sign an interconnection agreement. Credits are carried forward month to month at an avoided cost rate. At the end of the annual billing cycle, any surplus credits are paid out to the customer at the avoided cost rate.
Lincoln Electric System also offers net metering (plus a solar rebate!) to its customers who install solar or wind power systems. The utility credits the customer each month and carries credits forward for 12 months, after which LES cuts the customer a check for the outstanding amount.
LES has a tiered system of compensation for net metered customers, with Tier 1 offering 100% of retail rate for energy exported to the grid. This tier expired in 2017 and customers now get 50% of the retail rate for exported energy. This tier is likely to remain in effect until 2027, after which no rate has been defined by LES.
Final thoughts on state solar incentives in Nebraska
Nebraska may not seem like the best place in the U.S. to install solar, given the low cost of electricity in the state. However, homeowners who want to gain energy independence and cut their carbon footprint can take advantage of some solar incentives in the Cornhusker State.
Alongside the federal solar tax credit, Nebraskans can look into low-cost solar loans, one-time rebates, and net metering to help offset the cost of installing a home solar array. These all help to reduce your solar payback period!