RESIDENTIAL SOLAR INCENTIVES AND FINANCIAL BENEFITS
Rewarding in every way.
FEDERAL INVESTMENT TAX CREDIT
The federal Investment Tax Credit (ITC) covers 30% of your solar system’s full installation cost (materials and labor), as well as batteries and any necessary onsite preparation, such as replacing electrical panels, rebuilding electrical service, or reinforcing roofs. There is no maximum or cap on the expense amount.
- 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!
With net metering, your electric utility becomes your energy bank. A bi-directional meter replaces your existing electricity meter to track the production and use of your home’s energy. When your solar energy system produces more power than you’re using, the excess electricity spins this meter backwards, giving you a dollar-for-dollar utility credit for all the excess energy. At night, when the sun isn’t shining, you make withdrawals from the grid and use the credits you stored earlier in the day. In the summer, when days are long and sunny, most customers produce more energy than they need, building up credits with their utility that are used to offset their usage in the wintertime, when days are short and cloudy.
- 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!
ACCELERATED DEPRECIATION FOR BUSINESS
If you’re a business looking to go solar, the federal government offers an accelerated depreciation program as an additional incentive to make solar more affordable. The Modified Accelerated Cost-Recovery System (MACRS) allows a commercial owner of solar to depreciate 85% of the total system cost in the first year.
Tacoma Power Utilities Evergreen Options Program. TPU will award grant funds up to $50,000 each to local nonprofits, schools, and government agencies toward the purchase and installation of on-site local renewable energy projects. One award will be awarded in 2017; and one to two grants will be awarded per year thereafter.
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
So now that you know how easy it is to go solar, let us perform a quick, free solar site survey at your home or business. Now is truly the best time to take advantage of all available solar incentives before they decrease or end in the future.
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!
A smarter energy solution is closer than you think. Take the first step today.