Residential solar in the US is big business. The industry grew by 30% in 2021 when more than 4.2 gigawatts of residential solar was installed and there are now 121 gigawatts of solar power nationwide, from the sunny southwest to regions less well known for their cloudless climate.
Even though tons of people are installing solar, it can be a difficult decision to make, since each situation is different. A roof might be angled or shaded differently than a neighbor’s. A utility might offer a great (or terrible) net metering deal, making your panels even more valuable. State incentives might make purchasing solar panels easier.
Even so, there are enough regional similarities (things like electricity costs, solar costs and climate) to make a bird’s-eye view worthwhile. Starting with New England and working through the rest of the US, we’re looking at the regional factors that affect the choice to go solar.
The cost of electricity
For our purposes here, we’re calling New England the states north and east of New York: Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island and Vermont. (This one’s not controversial, but wait till we get to the Midwest.)
For New England, the average utility bill was $132.71 per month (PDF) in 2020, according to the US Energy Information Agency. That statewide averages vary from $95.77 in Maine to $161.55 in Connecticut. Those numbers are likely higher now as electricity rates increased by 4.3% from 2020 to 2021, the largest increase since 2008.
Here’s the 2020 average monthly bill for each state: Connecticut $161.55; Maine $95.77; Massachusetts $132.18; New Hampshire $120.01; Rhode Island $130.75; and Vermont $110.79.
The cost of solar panels
Solar panels vary in price by location for a lot of reasons. Soft costs, like the cost of labor, permitting and getting permission to connect a solar system to the grid, depend in part on location. While the cost of the solar panels themselves have fallen by about 40 cents per watt per year, the soft costs associated with installation only fell by 10-20 cents per watt per year.
The national average cost of a solar panel installation is $3.28 per watt, according to the consulting firm Wood Mackenzie. In New England, according to EnergySage, which collects prices from its solar installations marketplace, average costs for solar panels sit below that average: Connecticut, $3.06 per watt; Maine, $2.64 per watt; Massachusetts, $3.11 per watt; New Hampshire, $3.06 per watt; Rhode Island, $3.15 per watt; and Vermont, $2.98 per watt. (Because solar cost information comes from different sources, reported averages can vary. EnergySage finds that only Washington, DC, exceeds the average that Wood Mackenzie found.)
Besides issues of supply and demand and the cost of living in a certain location, solar prices are also affected by incentives like the federal investment tax credit, a portion of the cost of your solar panels you receive back on your taxes. For systems installed before the end of 2022, you’ll receive 26% of the cost of your system come tax time.
Some states have their own incentives and some in New England (and the rest of the northeast) are among the friendliest to solar. You can see an extensive list of the solar incentives that apply to your state in the Database of State Incentives for Renewables & Efficiency.
The New England states all have mechanisms for compensating residential solar owners for the electricity they generate, either through net metering, where your utility charges or pays you for the difference between how much electricity you use or generate, or a buy-all, sell-all plan, where the utility sells you all the electricity you use and buys all the electricity you generate. These incentives usually have limits placed on the amount of solar generation they’ll accept in a given year. Make sure of your situation before counting on this money.
States in New England have also given temporary exemptions on paying higher property taxes if adding solar panels makes a house’s value increase. These are usually temporary, but sometimes up to 20 years. New Hampshire has only given municipalities the option to waive these taxes. Connecticut, Rhode Island and Vermont have also done away with sales tax for renewable energy equipment, including solar panels.
Some states have tax rebates that can be taken after the federal tax credit. Massachusetts will give you back an additional 15% of your system’s cost, up to $1,000. Vermont will give you a rebate of 6.24% through the end of 2022.
One final factor affecting the cost of solar in these states is solar renewable energy certificates, or SRECs. One SREC represents the environmental benefits of 1 megawatt of solar energy. Solar panels in the program before November 2018 can sell SRECs (the current price is $290) to utilities trying to meet their obligations. Utilities in Massachusetts and Vermont give solar panel owners a financial incentive for their panels, though the owner must apply and space is limited.
The solar potential of New England
While New England is exactly across the country from the US solar powerhouse in the southwest, it’s actually one of the places with the highest solar adoption per capita, thanks in no small part to the incentives mentioned above.
There are a couple of ways to measure solar potential. One standard measures how much electricity a square meter solar panel will produce in a day if installed pointing directly up. By this metric, the cloudy New England states are near the bottom, according to the National Renewable Energy Laboratory. Most of New England sits between 4 kWh and 4.5 kWh per square meter per day. At the other end of the spectrum, the same square meter solar panel in New Mexico and Arizona will likely produce closer to 7 kWh.
But you don’t need to produce a lot of electricity if you’re not using a lot of electricity. If you compare the amount of electricity an average rooftop solar array can generate to the average household electricity consumption, New England is near the top of the list. Per the same NREL report, in Rhode Island, rooftop solar can cover 80-90% of a house’s energy consumption on average. In Connecticut, Maine, New Hampshire and Vermont, the average rooftop solar array can cover 90-100% of the average house’s energy consumption. In Massachusetts, it’s over 100%. One reason for this might be that New Englanders use a lot less energy on air conditioning than the rest of the country.
While the northeast gets less sun than the rest of the country, solar still has great potential to pay off — as it does in most places in the US.
This information paints with broad strokes, though. To know how solar will work on your roof, you’ll need to look at the specifics of your property (shading from trees or nearby buildings), roof (orientation and angle), and solar installations (price, timing, financing). It pays to get multiple quotes, including from local installers.