Residential Solar Energy Systems – Incentives and Credits

Incentives and credits

Now is a great time to install a solar energy system in your home. The future is now! Both the U.S. government and the state of Washington offer a variety of tax credits and rebates that help make your solar energy system more affordable. NW Wind and Solar will assist you in applying for any of the credits and incentives listed below.

Federal renewable energy tax credit

A home solar electric system is even more affordable thanks to a tax incentive provided by the federal government, which allows up to 30% of the installation cost of a home solar energy system to be credited to your federal income tax. If you do not have enough tax liability to use the whole credit in one year, you can carry the balance of the credit forward for up to 20 years. This incentive applies to solar electric generating systems as well as to solar hot water and wind power systems. Alternatively, you may apply for a grant in the same amount as the tax credit.

Washington State electricity production credit

The state of Washington, in partnership with local utilities, offers a variety of electricity production credits. For electricity produced by your home solar panels and solar energy electrical system, you can earn a minimum of $0.15/kWh for every kilowatt of electricity you produce. If the inverter you are using was manufactured in Washington State, the return is boosted to $0.18/kWh. Solar panels made in Washington earn $0.36/kWh, and if both panels and inverter are made in Washington you could earn $0.54/kWh up to a maximum of $5,000/year. You can apply for this production credit every year; currently, it expires on June 30, 2020. Several local Washington utilities participate in this program, including Seattle City Light and Puget Sound Energy. Whenever it makes economic sense, NW Wind & Solar will offer an option for an inverter and solar panels made in Washington so that your production incentive can be maximized. Click on the link below for more information about Washington incentives for renewable energy.

http://dor.wa.gov/Docs/Pubs/Incentives/RenewableEnergy.pdf

Green Tag purchases

The Northwest Solar Cooperative (NWSC) will purchase any electricity you produce from your solar energy system at the rate of $0.02/kWh. For more information, please follow this link: http://www.solaroregon.org/nwsolarcoop.

 

Utility company incentives

Various utility companies in Washington offer a variety of credits and loan programs for home solar panel and home solar energy system installations. For example, Snohomish PUD offers either a low interest loan (up to $25,000 at 2.9%) or a rebate of up to $2,500 for the installation of a solar energy system in your home. Click here to see a complete list of utilities offering credits and other incentives:

http://www.dsireusa.org/incentives/homeowner.cfm?state=WA&re=1&ee=1.

 

Net metering

Your home will use the electricity generated by your solar panels and solar energy system before it uses electricity generated by your power company. If your solar energy system is generating more electricity than your home needs at the time, the electricity you are generating will go out into the electric grid to be used by someone else. When this happens, your electric meter will actually run backwards. So during the summer, while your electricity use is low, you could actually have a credit on your electricity bill from your power company.

 

Washington State Sales Tax

You can get a 100% rebate on any Washington State Sales and Use Tax paid for the installation of your solar energy system through June 30, 2013.

 

Accelerated Depreciation

Modified Accelerated Cost Recovery System (MACRS) for Home-Based Businesses. Home-based businesses qualify for a full five-year MACRS accelerated depreciation tax deduction on the entire cost of the system. Check with your tax advisor for the applicability of this provision to your situation.