RESIDENTIAL SOLAR INCENTIVES AND FINANCIAL BENEFITS
SOLAR REBATES AND INCENTIVES
Washington State has some of the highest incentives for solar in the country, making solar not only a smart energy choice for the environment, but also a great financial investment. These incentives reward you for having a sunny site and help your solar pay for itself quickly — often in less than 10 years.
Below is a summary of financial incentives that are available to residents of Washington State.
FEDERAL INVESTMENT TAX CREDIT
- The solar system must be installed on the taxpayer’s primary or secondary residence, and the system must be installed by December 31 of the same tax year in which the homeowner plans to use the credit.
- The tax credit can be taken even by people who pay the Alternative Minimum Tax (AMT). If the federal credit exceeds the customer’s tax liability, the excess amount can be carried forward to succeeding years until 2022.
- Any unused tax credit can be carried forward the following year.
For residential systems, this credit will decrease incrementally from 30% to 26% in 2020, and 22% in 2021. The credit expires on Dec. 31, 2021. So if you’re considering solar, sooner is better!
- In Washington, the net-metering cycle runs annually from May 1 to April 30 of the following year. Credits roll over each month, but do not transfer from one year to the next, so it’s “use it or lose it” after April 30 of each year.
- Because net metering is essentially a “kilowatt exchange program,” your solar becomes more valuable the more energy you use.
- As retail rates for electricity rise, your credits for excess unused power will increase accordingly. Net metering thus helps insulate you from increasing utility rates. For example, if your utility’s rate increases from 10 to 15 cents per kWh, your net metering credit will do so as well.
There is no expiration date for net metering, but it is offered on a first-come, first-serve basis until the cumulative generating capacity of solar PV systems equals 1/2% of the utility’s peak demand. After a utility hits this quota, the utility can choose to continue offering net metering, or it can create a new arrangement for future customers. This is another good reason to get your system installed sooner rather than later!
NOTE: A new solar incentive program was passed on July 1, 2017. Senate Bill 5939 fixed some problems with the existing production incentive program for current solar system owners, AND created a new program for future customers. This makes Washington’s incentives even stronger — securing incentive payments for new solar systems for years to come, while grandfathering and protecting benefits for existing solar customers.
If you purchased solar before July 1, 2017, (or if you purchased between July 1 and September 30, 2017 but we advised you to choose the legacy program), you’re covered under the previous incentive package. That program was improved by the new law, so click here to learn the latest about how your incentive package works.
For solar PV systems certified after October 1, 2017. The production incentive rate you receive under this program depends on the year your system is installed and certified, as well as the type of solar equipment you’re using (see table below). To help encourage growth of the solar manufacturing industry in Washington State, Made-In-Washington solar modules receive the highest production rate. An Artisan proposal will always show the production incentive for each proposed system based on the modules used for that system.
Customer Caps. Beginning October 1, 2017, a customer’s production incentive will continue for eight years from the date of certification OR until your incentive payouts have covered 50 percent of your initial cost (including sales tax), whichever comes first. In other words, your production incentive payments will end before the eight-year mark if you reach 50 percent of the cost of your system. The federal tax credit and net metering incentives will recover the other 50 percent of the installation cost. After that, your solar system will continue to produce clean, free energy at no cost to you for years to come.
Here is a list of the main features of the current production incentives program:
- Rates are locked in for eight years, but step down annually for new installations.
- The incentive is now available for renters/leasers of homes and buildings.
- Incentive caps for commercial and utility-scale systems are now business-friendly.
- The definition of “Community Solar” has expanded so that systems installed by nonprofits and HUD housing authorities can now take advantage of the incentives.
- The premium Made-In-Washington incentive rate now applies only to solar panels. This allows customers more choices when selecting inverters.
- Residential, commercial, community and utility-scale solar categories each have their own designated funds. This makes each less likely to reach funding limits, because categories are not directly competing against each other.
Here are the Washington Solar Incentive rates beginning October 1, 2017:
|Fiscal Year||≤12kW||>12kW||Community Solar||Utility Solar||Made In WA Bonus|
|per kW hour||per kW hour||per kW hour||per kW hour||
per kW hour
Program Caps. Currently, the production incentive program restricts utility incentive payouts to 1.5 percent of its taxable income, or $250,000, whichever is greater. The program will end when the total program payout by all utilities in Washington State reaches $110 million collectively. This is to guarantee future incentive payments can be made to existing solar customers. In other words, you’ll lock in better incentives the sooner you go solar. GO SOLAR NOW.
ACCELERATED DEPRECIATION FOR BUSINESS
ARTISAN’S IBEW SOLAR REBATE
SnoPUD Planet Power. This grant is for schools, libraries, city halls and other community sites that are Snohomish County PUD customers who otherwise could not afford solar. The program uses utility dollars to put solar in highly visible places “where customers can learn about solar and see the technology in use.”
Rural Energy for America Program (REAP). This grant is administered by the U.S. Dept. of Agriculture (USDA) and provides rural farmers and small businesses with grants paying up to 25% of solar project and energy efficiency upgrade costs.
Bonneville Environmental Foundation (BEF). This organization funds and advises on small-scale renewable energy projects. BEF partners with businesses and utilities to cost-effectively launch and manage solar installations.
FREE SOLAR SITE SURVEY
By combining all of the above, the initial cost of installing a solar PV system on your home or business can be entirely offset. In fact, most solar systems repay their initial investment in less than 10 years—with almost half of the cost recouped in the first year! And thanks to local residential solar financing, no initial out-of-pocket cash is required!