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  • Writer's pictureRon Magby

Unpacking the Surge in Rooftop Solar: The 15-Cent Rule and What It Means

In recent years, we've witnessed a notable uptick in the appeal of rooftop solar in the United States. A significant contributor to this shift is what experts colloquially refer to as the "15-cent rule." In this blog post, we'll dive into the factors driving the increasing interest in rooftop solar and explore the potential implications for the future of our energy landscape.

The Rooftop Solar Revolution

Historically, the United States has trailed behind nations like Germany and Australia in adopting rooftop solar solutions. Low electricity prices in the U.S. made solar installations less attractive from a financial standpoint. But change is afoot, thanks to the perfect storm of escalating electricity rates, policy adjustments, and the growing desire for cleaner energy sources.

The Magic Number: 15 Cents

The "15-cent rule" serves as a handy rule of thumb in the complex world of solar economics. When a state's electricity rates eclipse 15 cents per kilowatt-hour, it's a signal that investing in solar panels becomes a wiser financial decision for homeowners. To put it into perspective, this rate equates to a monthly electricity bill of roughly $130 for an average household.

States Joining the Solar Movement

In 2022, 16 U.S. states boasted residential electricity rates exceeding the 15-cent threshold. Leading the charge was Hawaii, with a rate of 43 cents, largely due to its historical reliance on imported oil for power generation. California followed closely with a rate of 26.2 cents, primarily attributable to the state's unique challenges, including serving challenging terrains and battling wildfires. Eight additional states, primarily in the northeastern region and Alaska, also witnessed rates exceeding 20 cents, surpassing the national average.

Expanding Solar Horizons

One exciting development is the emergence of states where electricity rates have recently surpassed the 15-cent mark, creating fertile ground for the growth of rooftop solar. States like New Jersey and Pennsylvania, which have previously embraced the rooftop solar industry, have already implemented policies that support solar adoption. Furthermore, Midwestern states like Michigan, Illinois, Wisconsin, and Indiana are experiencing a surge in solar adoption, fueled by state-level incentives and subsidies.

The Impact of Policies

State-level policies play a pivotal role in shaping the rooftop solar landscape. In Illinois, for instance, the Climate and Equitable Jobs Act has played a pivotal role in driving the expansion of solar energy. Conversely, Indiana has faced challenges due to changes in utility policies impacting the compensation solar owners receive for the excess electricity they feed back into the grid, also known as "net metering."

National Trends

Critically, the national average electricity rate in the United States crossed the 15-cent threshold for the first time in 2022, reaching 15.1 cents per kilowatt-hour. This indicates that more households across the nation will find solar installations financially viable.

A Bright Solar Future

For solar enthusiasts, the promising news is that despite potential cost increases due to inflation and other factors, solar prices are anticipated to remain relatively stable. Growing demand and economies of scale are contributing to maintaining solar power as both a sustainable and cost-effective solution.

The "15-cent rule" is a significant marker of change in the U.S. energy landscape. Escalating electricity prices, state-level policies, and a mounting demand for cleaner energy are propelling the expansion of rooftop solar. As utilities adapt to these changes, it's clear that rooftop solar is here to stay. Embracing this new energy reality and welcoming a more sustainable and cost-effective future is paramount for the energy industry. Rooftop Solar's growth is shaping a path toward a cleaner and more economically viable energy future.

Solar cost by state


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