Last updated: December2024
Written by
Ben Zientara
Solar incentives in Kansas can save the average homeowner $6,300. Those savings can help your solar panels pay for themselves quicker, with the average solar payback time in the Sunflower State being just over nine years.
It might not surprise you that Kansas doesn't offer all that many solar incentives. But, the good news is that the federal government provides a solar tax credit worth 30% of solar installation costs. The state does help a bit, with decent month-to-month net metering rules and a property tax exemption for the value a solar panel system adds to your home.
Let's take a closer look at the incentives available in Kansas and how they can help you lower your electric bills.
Incentive | Estimated average annual savings | Eligibility | About |
|---|---|---|---|
Federal solar tax credit | $6,300 | All tax-paying U.S. citizens | Tax credit equal to 30% of installation costs, applied to federal income taxes |
Property tax exemption | Varies | All Kansas homeowners with solar installations | Property used to produce renewable electricity is exempt from taxation |
Quick Facts
Value: 30% of solar installation costs after grants; average of $6,300 for a 7.2-kW system
Frequency: One-time tax credit, rollover for five years
How to apply: File IRS Form 5695 with annual tax return
There is no specific Kansas solar tax credit, but the federal government offers the federal solar tax credit (formerly known as the Federal Solar Investment Tax Credit or ITC). The Clean Energy Credit applies to all U.S. residents who own a home on which they install solar panels.
The credit equals 30% of the cost to install solar and can only be used by homeowners with the tax liability to claim it.
The average solar panel system in Kansas will earn a tax credit of about $6,300. But, the value of the solar tax credit can depend largely on system size, which you can see in the following table:
System size | Estimated cost | Tax credit |
|---|---|---|
5 kW | $15,000 | $4,500 |
7.2 kW (Recommended average for Kansas) | $21,000 | $6,300 |
10 kW | $28,500 | $8,550 |
15 kW | $40,500 | $12,150 |
Taxpayers can claim the credit in the year after their solar installation is complete. The credit applies to all solar equipment or home battery storage costs but won’t include expenses like structural improvements that aren’t directly associated with generating solar energy.
Note: Lending companies often require paying the value of the solar tax credit toward a solar loan by 18 months to keep monthly payments low.
Quick Facts
Value: Varies based on property value
Frequency: Ongoing
How to apply: Application is part of the process of going solar with an installer
Kansas offers a property tax exemption for “all property actually and regularly used predominantly to produce and generate electricity utilizing renewable energy resources or technologies.” For people who get solar panels today, that exemption runs for ten years after the year in which the installation is completed.
According to Smartasset, Kansas has an average effective property tax rate of 1.33% and a median home value of $183,800. Our research shows that solar panels add 6.8% to your home’s value.
Considering those facts, the median Kansas home with solar panels is worth $12,500 more than a similar non-solar home. If the homeowner saved 1.33% per year on the taxes for that added value, the savings from the state’s property tax exemption would equal $166 per year.
Quick Facts
Electric rates average 13.62 cents per kWh in Kansas
Excess solar energy is valued at the utility’s system average cost, which is about 2.4 cents per kWh.
Net metering requires your utility to monitor how much energy your solar power system produces and how much you consume and ensure you get credit for the surplus. With net metering in some states, you get full retail rate credit for the electricity you send back into the grid with your solar panels. Unfortunately, Kansas is not one of those states.
Current Kansas net metering rules apply for customers of both major utilities in the state: Evergy and Empire District. The law says that solar production will be recorded throughout the month, and if the customer exports more kilowatt-hours (kWh) than they pull from the grid when the sun isn’t shining, they’ll be paid for the excess energy at the utility’s “system average cost” (wholesale rate) — 2.4 cents per kWh, compared to 13.62 cents/kWh retail.
That means you get paid much less than retail if your panels generate more energy than you need for a month. We recommend that folks in Kansas choose smaller solar panel installations that won’t produce more than their usage during the sunniest month of the year, or they risk earning less money for the kilowatt-hours above and beyond that number.
That’s Kansas net metering as it stands, and there aren’t any major plans afoot to shake it up. There’s no guarantee that will go on indefinitely, though. Kansas has had a bit of a bumpy history with net metering.
As we mentioned above, in 2019, Evergy (formerly Westar and KCP&L), the largest investor-owned utility in Kansas, got approval from the Kansas Corporation Commission to levy additional monthly fees on solar owners. Thankfully, that approval was stuck down by the state Supreme Court in early 2020.
The Court was pretty clear in its decision that Evergy’s attempt to charge solar owners more than other customers was “price discrimination” that Kansas law “clearly prohibits.”
Unfortunately, Kansas has not implemented any solar battery incentives. In fact, the state Department of Revenue has even ruled that the property tax exemption for solar panels does not apply to batteries used in residential systems.
That said, adding batteries to a solar installation has many benefits. Batteries serve multiple functions, helping their owners by providing backup power in emergencies, and helping lower costs for all customers by alleviating peak demand needs when used in virtual power plants.
Kansas has an opportunity to do everyone a solid and introduce some smart battery incentives.
The average cost of solar panels in Kansas is around $21,000 before incentives for a 7.2 kW system. After the federal tax credit, that cost is reduced to $14,700.
If the average Kansas homeowner were to design a solar installation to produce all the electricity they use in a year, the system would be 9 kilowatts in size (about 23 400-watt solar panels). However, because of the state’s terrible net metering rules, we recommend a system of about 75% of that size (7.2 kW, or 18 panels). This helps avoid exporting excess energy during the summer and destroying the economics of the system.
Here’s a quick rundown of the costs and savings from a system that is designed to not export excess energy during a month:
Cost before incentives: $21,000
Federal tax credit: $21,000 x 30% = $6,300
Effective system cost: $21,000 - $6,300 = $14,700
Even though there aren’t many solar incentives in Kansas, solar panels can still be a good investment!
The state is quite sunny compared to the rest of the country, and electricity prices just keep going up. With an estimated 10,944 kWh of solar energy produced in the first year, a solar installation can save the average homeowner nearly $1,500 on electricity bills.
At that rate, the installation will pay for itself in a little over nine years, leaving you with 15 years or more of free electricity.
If you’re ready to begin your solar journey, find the best solar companies in Kansas to request multiple quotes from installers in your area.
Ben Zientara is a writer, researcher, and solar policy analyst who has written about the residential solar industry, the electric grid, and state utility policy since 2013.
His early work included leading the team that produced the annual State Solar Power Rankings Report for the Solar Power Rocks website from 2015 to 2020. The rankings w...
Learn more about Ben Zientara