Washington solar incentives and rebates

A LITTLE HELP TO GO GREEN IN THE EVERGREEN STATE

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! In 2017, the state legislature approved a new solar production incentive, enabling thousands more to go solar during the program’s eight-year timeline.

Wondering how solar could work with our climate? Great question! Learn about solar in the Pacific Northwest.

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National: 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 percent to 26 percent in 2020 and 22 percent 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

A new state production incentive was passed by the state legislature in 2017. A production incentive is a program managed by your utility that pays you for every kilowatt hour (kWh) your PV system produces regardless of how much electricity you use. This program is in addition to the net metering benefit.

Where net metering gives you value at retail rates for your power, the production incentive pays you based on how many kilowatt hours (kWh) your system produces–up to $5,000 per year for eight years. You can receive payments for eight years of energy production or until you have received up to 50 percent of your total system cost, whichever comes first.

The maximum size system you can install is 12 kilowatts. Solar PV systems larger than 12kW (most home average around 8kW) follow the production rate structure for businesses (see below).

The production rate you earn is based on the year when you install solar. The sooner it is installed, the higher the rate you lock in for eight years:

Install your system before → 6/30/2018 6/30/2019 6/30/2020 6/30/2021
Base rate/kWh $0.16 $0.14 $0.12 $0.10
Made in Washington bonus rate/kWh $0.05 $0.04 $0.03 $0.02
Maximum possible rate/kWh $0.21 $0.18 $0.15 $0.12

There’s never been a better time to go solar in Washington, so get started today! The new solar incentive program can help you to recoup up to 50 percent of your solar cost. On top of that, you also have the 30 percent Federal Income Tax Credit and all the benefits of eliminating or significantly reducing your electricity bill.

Commercial/agricultural solar incentives (or any system above 12kW)

 

1) STATE PRODUCTION INCENTIVES

The new production incentive program passed in 2017 also applies to commercial systems. Businesses installing a grid-connected solar photovoltaic system can receive up to $25,000 per year for eight years.

Just like residential systems, you can receive payments for eight years or until you have received up to 50% of your total system cost, whichever comes first.

The commercial production rate for commercial systems:

Install your system before → 6/30/2018 6/30/2019 6/30/2020 6/30/2021
Base rate/kWh $0.06 $0.04 $0.02 $0.02
Made in Washington bonus rate/kWh $0.05 $0.04 $0.03 $0.02
Maximum possible rate/kWh $0.11 $0.08 $0.05 $0.04

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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