Washington solar incentives and rebates

HELP GOING GREEN IN THE EVERGREEN STATE

Incentives for homeowners and businesses

Washington offers a rich set of incentives to go solar, both at home and for your business – including cash incentives for the power your system produces!

National program: Federal Income Tax Credit

The Federal Income Tax Credit is valued at 30 percent of your total solar system cost. A tax credit is a dollar-for-dollar reduction of the income tax you owe. If you can’t use the full value in one year, you can roll over the remainder to next year.

You should check with a tax adviser to make sure you can claim the entire value. This incentive reduces from 30% to 26% in 2020 and 22% in 2021.

Local residential solar incentives

 

1) NET METERING

Net metering is a contract that you sign with your utility that allows you to trade your power with them at retail rates. You get credit on your bill for your excess Kilowatt Hours (kWh) when your system is producing more than you consume. At night or when your system isn’t producing, you buy power from the utility like you do now.

Typically in Washington State we produce vastly more than we consume during the summer and build up big credits. Then during the less-sunny winters we use the accumulated credits. The fiscal year for net metering is from May to April. If you still have kWh “in the bank” at the end of April, you forfeit their value, although this is rare. It’s for this reason you don’t usually see systems designed to more than 100% of your annual consumption. It’s also important to understand how your utility handles minimum charges and how solar production impacts your bill.

We can help you understand the balance of production and consumption on an annual basis. Net metering is a Washington State law and does not expire.

2) PRODUCTION INCENTIVES

The main production incentive in our area is provided by Washington State and managed by your local utility. A production incentive is a program that pays you for every kilowatt hour (kWh) your PV system produces regardless of how much electricity you use.

Where net metering gives you value at retail rates for your power, the production incentive pays you a premium starting at $0.15/kWh up to $0.54/kWh, depending on whether or not you use Made in Washington equipment. Production incentives max out at $5,000 per year per household and are paid on top of the net metering benefit. Rate reductions can occur depending on your utility (our design consultants can walk you through this). The production incentive program is in place until June 30, 2020.

3) SALES TAX EXEMPTION

Solar systems under 10 kilowatts in size (most residential systems are less than 10kW) are exempt from sales tax until 2018 and in some cases until 2020. This means you save close to 10 percent on your system price. For systems above 10kW, a 75 percent remittance for sales tax paid can be claimed immediately after your system is paid for.

Local commercial/agricultural solar incentives

 

1) SALES TAX EXEMPTION

Solar systems under 10 kilowatts in size (most residential systems are less than 10kW) are exempt from sales tax until 2018 and in some cases until 2020. This means you save close to 10 percent on your system price. For systems above 10kW, a 75 percent remittance for sales tax paid can be claimed immediately after your system is paid for.

2) MODIFIED ACCELERATED COST RECOVERY SYSTEM (MACRS)

MACRS is an accelerated tax depreciation schedule in the United States. Under this system, the capitalized cost (basis) of tangible property is recovered over a specified life by annual deductions for depreciation. Qualifying solar energy equipment is eligible for a cost recovery period of five years. This incentive is typically only available for businesses and rental properties.

3) RURAL ENERGY FOR AMERICA PROGRAM (REAP)

REAP provides grants and loans to farmers and rural small businesses to help purchase renewable energy systems and make energy efficiency improvements. The program pays up to 25 percent of the project.

4) GRANTS FOR SMALL BUSINESSES AND NONPROFIT ORGANIZATIONS

Our team maintains a list of active grant programs that may be able to help your non-profit organization or small business go solar. For more information, visit our grants page.

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DAVID, TENINO