In 2005 Washington Governor Christine Gregoire signed two bills that put the state on the cutting edge of progressive energy, specifically solar, reform in the United States.
SB 5101 created incentives for the small scale production of solar power through Photovoltaic (PV) systems tied into the existing power grid. The bill provides a credit of 15 cents per kilowatt hour produced for qualifying residential and commercial consumer/producers up to $2,000 annually.
SB 5111 provides tax incentives for businesses manufacturing solar components in the state of Washington and provides additional incentive to companies relocating from within or outside the state to economically depressed areas. The bill cuts the business and occupations taxes paid by solar power manufacturers by 40 percent.
The bills have been called the most important pieces of solar legislation ever introduced by a state legislator and closely mirror the successful system in Germany. The bill does not mandate the local utility companies to participate in the program, but instead provides credits against the utilities state taxes, an approach that turned some of the state’s largest utilities into some of the biggest supporters of the legislation.
The performance based approach to solar credits is a step away from incentives in states like California that give credits to cover the upfront cost of a system. The idea behind the Washington state program is to encourage effective and efficient production of power on the consumer/producer level, rather than to simply reward homeowners who put solar systems on their roofs.
The bills, that unanimously passed the House and Senate, working in tandem are designed to turn Washington State into one of the most progressive renewable energy markets in the entire country.