Industry Pushes to Overhaul State’s Solar Incentive Program Before Legislative Session Ends

NOTE: This information is possibly outdated. Please reference our incentives page for current information.

A program designed to help homeowners and businesses offset the costs of installing solar systems may be extended and overhauled before the Washington State Legislature wraps up this year’s session.

A&R Solar is part of Solar Installers of Washington, a trade association that is lobbying for changes to the Renewable Energy Cost Recovery Incentive Payment Program that would help thousands of new customers and create new jobs in the growing state solar industry.

In 2020, the existing incentive program will expire. While still five years away, customers wanting to get new solar installations for their homes will need to act soon in order to receive enough financial benefit to justify their investment. Under the current program, residential and commercial owners who have solar installations receive an annual rebate of up to $5,000 until the program expires in 2020. The program is one of a handful of local, state, and federal financial incentives that have helped homeowners pay off the cost of their systems within several years of purchase.

Money for the program comes from a public utility tax. Homeowners receive checks or bill credits from their utility. The existing incentive program was created in 2006 with an original expiration date of 2014. It was extended to 2020 in 2012.

In 2006, Washington voters approved clean-energy Initiative 937. The initiative requires large utilities to obtain 15 percent of their electricity from new renewable resources such as solar and wind (but excluding hydro). According to the Northwest Energy Coalition, all qualifying utilities easily met the 2012 renewables benchmark by investing in wind, hydropower efficiency upgrades, biomass, landfill gas, and solar, and all are projected to meet the 2016 renewables benchmark of 9 percent. Many have already acquired sufficient renewables to meet the 2020 15 percent standard. Furthermore, new renewable energy resource development in Washington has led to more than $8 billion of investment in the state, creating more than 3,800 jobs and generating more than $145 million in public tax revenue.

Under the new incentive proposal, new solar customers would receive the incentive rebate for 10 years at a significantly reduced rate than the current program. Both programs offer incentives for solar equipment made in Washington. The current program’s benefits expire in 2020, and without the passage of a new program, new solar customers who sign up for the program in 2019 would only receive one year of the benefit.

While the current program provides a customer-friendly financial benefit, the new program would restructure how homeowners get paid and stretch the allocated funds farther.

The cost savings generated by the new program would expand the solar incentives to more participants, including small businesses, low-income individuals, and nonprofits.

According to the Solar Energy Industries Association, solar capacity in the United States grew 30 percent in 2014 to more than 20 gigawatts and will more than double by the end of 2016. That’s enough to power 7.6 million U.S. homes, up from 360,000 in 2009.

Projects such as Warren Buffett’s Topaz array in California are changing power flows in the electrical grid, challenging hydro and conventional generators and creating negative prices on sunny days, according to a recent Bloomberg Business report.

The cost of solar systems has come down due to new technology and demand, and the state’s incentives program has helped to drive the increase in installations.

Solar energy systems help to reduce greenhouse gas emissions and reduce dependence on fossil fuel. Not only are fossil fuels bad for the environment, they are also a finite resource—their limited availability creates a volatile market in which energy prices can skyrocket in a short period of time.

During Washington’s long sunny summer days, production from solar arrays is often much higher than what a home’s energy usage might be, generating credits with a local utility. If a system matched to consumption patterns, it’s possible that a home can generate enough credits during the summer to offset winter consumption. Solar panels also operate more efficiently in our state’s cooler summer weather, which means more power than hotter climates, not less. Solar energy systems keep on working on cloudy days too, collecting scattered light and focusing it into power.