Layton Smith Sr. is an IRS Enrolled Agent and general partner at HofflerSmith Financial in Cherry Hill, New Jersey, with 27 years of tax practice. He has overseen thousands of solar and clean energy tax credits, rebates, and their implications for his clients.
In most states the first bad news a solar shopper gets is that their utility is a cooperative or a city system, and the state rules they have been reading do not apply. Nebraska cannot deliver that news, because there is no other kind of utility here. Every electric provider in the state is publicly owned, and the same statute binds all of them. It also does something with your leftover credit that most states do not: it pays it out.
Every Utility Here Is Publicly Owned
Nebraska has no investor-owned electric utilities. Power comes from public power districts, municipal systems and cooperatives, which means the customer-owned exception that removes homeowners from the rules in Kansas, Iowa, Mississippi and Montana simply has nothing to attach to here.
Moving, or just comparing? The incentives across all 50 states shows what other states offer.
Sections 70-2001 to 70-2005 of the Nebraska Revised Statutes apply to local distribution utilities as a class. Omaha Public Power District, Lincoln Electric System, Nebraska Public Power District and the smaller districts and cooperatives all sit inside the same obligation: provide net metering to any customer-generator with a qualified facility.
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Nebraska Pays the Balance Instead of Keeping It
Nebraska’s 2026 inventory, all of it statutory:
Nebraska program | What it is worth to you | Where it stands in 2026 |
|---|---|---|
Net metering | Monthly netting; credits accumulate as dollars | Statutory at all public power utilities, 25 kW limit, 1% aggregate cap |
Excess generation payout | Avoided-cost monetary credit, paid out at the annual reset | Statutory; surplus is paid, never surrendered |
REC ownership | You keep the renewable energy certificates | Statutory; no ready market attaches a dollar value |
Nebraska state tax credit | None | No program exists or is pending |
Federal 25D credit | $0 | Ended for systems you buy and own whose installation is completed after December 31, 2025 |
Federal 48E credit | Reaches you only as lease or PPA pricing | Third-party owners only |
One provision is the opposite of what most states do. Net excess generation is credited at the utility’s avoided cost of electricity supply during the billing period, and those credits accumulate as dollars, not kilowatt-hours. Then, at the end of each annualized period, any excess monetary credits are paid out to coincide with your final bill, or within sixty days if you end your retail service.
| State | What happens to unused credit at the annual reset |
|---|---|
| Nebraska | Paid out to the customer |
| Montana | Granted to the utility without compensation |
| Washington | Granted to the utility each March 31 |
| Kansas | Settled monthly at wholesale, nothing banked |
| Missouri | Expires twelve months after issuance |
Nebraska is the entry in that table that ends with the homeowner holding the money. The catch is the rate: avoided cost is a wholesale measure, well below the retail rate you pay for the power you buy (Nebraska’s statewide average is about 12.16¢ per kWh; your district’s rate will differ). So the sensible reading is not that surplus is lucrative, but that it is never confiscated, which removes the pressure to build a system that lands exactly on your usage.
Because avoided cost is set by each utility and moves with its own supply costs, no statewide cent figure exists. Ask your district or cooperative for its current avoided cost in writing before you compare quotes.
The 1% Cap Is the Real Limit
Nebraska’s net metering obligation is not open-ended. A local distribution utility is not required to provide net metering to additional customer-generators once the total generating capacity of all its net metered customers equals or exceeds 1% of the capacity needed to meet that utility’s average aggregate customer monthly peak demand forecast for the calendar year.
A 1% ceiling is low by national standards. Kansas is stepping toward 5%, Washington’s threshold is 4% of a 1996 baseline, and Mississippi’s is 3%. If you are considering solar in Nebraska, ask your utility where it currently sits against its 1% figure, because that number decides whether the statutory arrangement is available to you at all.
The size limit is separate and lower than most: qualified facilities are capped at 25 kW, though a utility may voluntarily offer net metering above that. For a normal house, 25 kW is not a constraint. For a large rural property with outbuildings and irrigation load, it can be.
You Keep Your Renewable Energy Credits
Section 70-2004 settles a question that goes the other way in several states: a customer-generator owns the renewable energy credits its qualified facility generates. In Mississippi those certificates transfer to the utility as a condition of net metering. In Nebraska they stay with you.
Be realistic about what that is worth. Nebraska has no state renewable portfolio standard creating demand for residential certificates, so ownership is a right without a ready market attached. Treat it as an option that costs nothing, and be skeptical of any proposal that assigns it a dollar value.
The same section requires you to get an inspection from the State Electrical Division and give the utility documentation of it before interconnection, plus sixty days’ notice before installation. Both are ordinary, and both are worth diarizing because they sit on the critical path.
You Likely Will Not Qualify If
- Your utility has already reached its 1% threshold. Past that point it is not required to add new net metering customers, and 1% is the lowest cap among the states compared here.
- You need more than 25 kW. That is the statutory ceiling for a qualified facility, though a utility may go above it voluntarily.
- You are expecting a Nebraska state solar tax credit. There is not one.
- You are counting on the former 30% federal credit. Section 25D is $0 for purchased systems whose installation is completed after December 31, 2025 under Public Law 119-21.
- You skipped the State Electrical Division inspection or the sixty days’ notice. Both are statutory conditions of interconnection; no installer can waive them.
What This Means at 25 Kilowatts
Nebraska’s combination is unusual and it points somewhere clear. Because surplus is paid rather than surrendered, you are not punished for a system that runs slightly ahead of your usage. Because the payment is at wholesale avoided cost, well below retail, you are not rewarded for one that runs a long way ahead. And because the cap is 1%, the availability question is worth settling before the design question.
So the order of operations here is: confirm your utility still has room under its threshold, get its current avoided cost, then size to your own consumption knowing that overshooting is inefficient but never confiscatory. Our Nebraska cost guide covers pricing and the Nebraska installer list covers who does the work.
Nebraska Solar FAQs
Yes, and it binds every electric provider in the state. Nebraska has no investor-owned utilities, so sections 70-2001 to 70-2005 apply to local distribution utilities as a class, covering Omaha Public Power District, Lincoln Electric System, Nebraska Public Power District and the smaller districts and cooperatives alike. Qualified facilities are capped at 25 kW.
You are paid for them. Net excess generation is credited at the utility’s avoided cost of electricity supply during the billing period, accumulates as monetary credit, and any excess is paid out at the end of each annualized period, or within sixty days if you terminate retail service. Montana and Washington surrender unused credits to the utility instead, and Missouri lets them expire.
Yes, and it is low by national standards. A utility is not required to provide net metering to additional customer-generators once total net metered capacity equals or exceeds 1% of the capacity needed to meet its average aggregate customer monthly peak demand forecast for the year. Ask your utility where it sits against that figure before you design a system.
You do. Section 70-2004 states that a customer-generator owns the renewable energy credits its qualified facility generates, which is the reverse of Mississippi, where they transfer to the utility. Be realistic about the value: Nebraska has no state renewable portfolio standard creating demand for residential certificates, so this is an option that costs nothing, not income to count on.
No. Nebraska offers no state income tax credit for residential solar. With Section 25D at $0 for purchased systems whose installation is completed after December 31, 2025, what a Nebraska homeowner is actually buying is the statutory right to net meter with any provider in the state, monetary credit at avoided cost, and a payout rather than a forfeiture at the end of the year.
Check the 1% headroom before anything else. Enter your ZIP code to see what Nebraska installers are quoting.
Ask your district for its avoided cost
References & Research Sources
EcoGen America reviewed Nebraska Revised Statutes 70-2003 and 70-2004, Nebraska Power Association materials, federal energy data, and IRS guidance for this page. Each utility sets its own avoided cost; ask yours for the current figure in writing. Sources accessed between June 10 and August 20, 2026.
- Nebraska Legislature. Nebraska Revised Statute 70-2003. The net metering obligation, the 25 kW qualified facility limit, the 1% aggregate cap, avoided-cost crediting of net excess as monetary amounts, and the annualized payout. Accessed August 20, 2026.
- Nebraska Legislature. Nebraska Revised Statute 70-2004. Customer-generator ownership of renewable energy credits, the State Electrical Division inspection requirement, and the sixty days’ notice. Accessed August 20, 2026.
- Nebraska Power Association. All-public-power structure resources. Context for the state’s public power districts and cooperatives. Accessed August 20, 2026.
- U.S. Energy Information Administration (EIA). Electric Power Monthly. The Nebraska statewide average residential price used for scale. Accessed August 20, 2026.
- Internal Revenue Service (IRS). One, Big, Beautiful Bill Provisions. Guidance on the Public Law 119-21 termination of the Section 25D residential credit for systems whose installation is completed after December 31, 2025. Accessed August 20, 2026.
