RESIDENTIAL SOLAR INCENTIVES AND FINANCIAL BENEFITS
Rewarding in every way.
SOLAR’S FINANCIAL BENEFITS AND INCENTIVES.
Washington State has one of the most progressive incentive programs in the country, making solar not only a great choice for the environment, but also for your bottom line.
Combined with the federal tax credit (extended at the end of 2015 to expire in December 2021), these incentives help your solar pay for itself quickly and generate rebates as well as power.
Between incentives and energy/utility bill savings, the cost of installing a solar PV system in your home can be almost entirely offset. Thanks to the federal income tax credit and Washington’s generous incentives, most residential solar systems repay their initial investment within 10 years—and nearly half of the cost can be offset in the first year! And thanks to residential solar financing, minimal to no initial out-of-pocket cash is required.
Plus, with a warrantied life of 25 years and an effective life of closer to 40 or 50 years, solar panels help you secure predictable energy costs for decades to come, even as electricity costs rise steadily.
This illustration shows how incentives and federal tax credits impact the actual cost of solar:
FEDERAL AND STATE SUBSIDES AND INCENTIVES
Below is a summary of all of the financial incentives — both state and federal — available to Washingtonians when you go solar.
Solar in Washington is tax-free for systems up to and including 10kW. For systems larger than 10kW, the customer pays sales tax and gets a 75% rebate from Washington State.
30% FEDERAL TAX CREDIT – EXPIRES DECEMBER 31, 2021
The Federal Tax Credit puts your tax dollars to work for clean energy, and is a great way to reduce your tax bill while protecting the environment. The tax credit covers 30% of the full install cost (materials and labor) of the solar PV system, as well as site preparation (such as upgrading electrical panels, rebuilding electrical service, or reinforcing roofs. There is no maximum or cap on the amount that can receive the credit.
To receive the credit, the solar energy system must be installed on the taxpayer’s primary or secondary residence, and the system must be installed by December 31st 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).
For residential systems, this credit reduces to 26% in 2020, and 22% in 2021.
If the federal credit exceeds the customer’s tax liability, the excess amount carries forward to succeeding years until 2022. It is unclear whether the unused tax credit can be carried forward after then.
With net metering, when your solar energy system produces more power than you are using, that power is sent back into the power grid, where it is redistributed to users. You receive a credit for the excess energy. In Washington, based on an annual cycle that begins on May 1 and ends April 30, customers who generate their own power can use it to supplement their utility power and earn credit for unused power.
The net meter replaces the utility meter, and has the ability to track both power used and excess power being fed back into the grid (spinning your meter backwards). Any power produced in excess of the immediate needs of the house, such as on sunny summer days, spins the net meter backwards and produces a 1:1 credit to be used at night or during winter months, when typically consumption is higher and generation is lower.
Credits get stored and recorded, rolling over each month, but do not transfer from one fiscal year to the next. There is no sunset date for net metering; the homeowner should always be able to use the power they produce or be credited for it. Net metering helps to offset increasing utility rates.
Our state production-based incentive pays homeowners to produce solar power, regardless of whether homeowners use that power.
The value of the solar production incentive varies depending on two factors:
- Where the solar panels and solar inverter were manufactured.
- How many of your utility’s customers have already gone solar.
Systems built with Made-in-Washington modules and inverters earn the highest incentive. An Artisan proposal for solar installation will always show the production incentive for each proposed system based on the component used for that system.
Utilities can use up to 0.05% of their taxable income to pay a production incentive to solar customers. When they reach that cap, they have the option of either closing the incentive program to new participants (not offering an incentive to new customers) or reducing the incentive amount for all participants to make room for new solar owners to receive incentives.
How soon a utility reaches that cap will depend on how many solar customers it has and how much power those customers are producing. Some Puget Sound utilities are nearing or reaching their caps. A new incentive program under consideration by Washington State lawmakers would change this program to extend benefits for new and existing solar customers. Watch our blog for news of developments.
To track your energy production for the incentive, a production meter is installed on the home by the utility between the solar inverter(s) and electrical panel. The production meter measures how much power the system has produced.
ACCELERATED DEPRECIATION FOR BUSINESS
Accelerated depreciation is an additional benefit that can make solar more affordable for businesses. Modified Accelerated Cost-Recovery System (MACRS) allows a commercial owner of solar to depreciate 85% of the total system cost over five years.
IBEW SOLAR REBATE
Artisan Electric is committed to the highest quality solar installations, so we use only qualified union electricians for all electrical aspects of the installation. As a thank-you to our customers for hiring a company that pays their workers living wages, the IBEW Local 46 offers a generous rebate.
Customers receive $500 for any system larger than 5kW. Plus, you can rest assured knowing you own an impeccably designed and installed solar electric system that is guaranteed by IBEW for five years.
SnoPUD Planet Power – Planet Power is for schools, libraries, city halls and other community sites that are Snohomish County PUD customers and 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) – REAP provides rural farmers and small businesses with grants paying up to 25 percent of solar project and energy efficiency upgrade costs.
Bonneville Environmental Foundation (BEF) – BEF funds and advises on small-scale renewable energy projects. The popular Solar 4R Schools program provides K-12 schools with solar arrays, educational kiosks, and teaching kits so students can learn hands-on about renewable energy technologies.
FREE SOLAR SITE ASSESSMENT
Request a free residential solar site assessment today! Save money on your solar energy system installation, using all available residential solar incentives.
Last Modified: January 11, 2017