Solar Incentives

Solar incentives vary by utility and your individual circumstances. Consult with a tax professional to confirm eligibility. Other great resources for current programs and incentives can be found at www.dsireusa.org or www.seia.org

Commonly Referred to as Official Name Incentive Notes
30% tax or ITC Solar Investment Tax Credit 30% of installed system cost that is a dollar for dollar credit against your liability’s Have up to four years to use credit. Can be used in parts. MUST have tax liability to be a benefit.
Cash Rebate / Utility pays for energy Renewable Energy System Cost Recovery from WA state department of Revenue Between .14 and .04 depending on system size. Paid per kWh whether you use or not, until 50% of the TOTAL System is paid for or 8 Years—WHICHEVER comes first Check actually comes from utility around August. Maximum incentive $5,000 per year. Please call us for current program information.
Net Metering This is agreement with your utility Essentially allows your meter to “net” out the solar so you receive credit against your bills. Frequently your meter in peak season may go backwards, this is the utility’s way of “storing” the excess energy you produce which will then count against next month in which it is needed.
MACRS / Accelerated Depreciation Modified Accelerated cost recovery system In effect eligible for a cost recovery period of 5 years. This is typically worth about 25% of the project cost in tax benefits. Primarily for business although home based business may qualify for a portion of this incentive.
REAP Grants For the Agricultural industry there is often an opportunity for these grants which pay up to 25% of the installed cost of the system back in cash upon project completion. Must have over 60% of your income be directly related to crop production. As example making wine would not qualify but growing the grapes would.

Solar Water heating projects eligible for #’s 1, 5 & 6

Hot Solar Solutions, Solar Electricity in Burbank Washington

30% Federal Investment Tax Credit (ITC)

Homeowners and businesses across the nation may claim a tax credit of 30% of the cost of a solar system installed on their property. Costs may include labor, assembly or original system installation, and electrical labor to connect the system to the structure’s service main. If the credit earned by the system exceeds a single year’s tax liability, the excess credit may be carried forward to the following taxable year. Currently the federal ITC is set to expire in 2019. The ITC then steps down to 26 percent in 2020 and 22 percent in 2021. After 2023, the residential credit will drop to zero while the commercial and utility credit will drop to a permanent 10 percent. For more information please on the ITC Tax Credit, check out the Solar Energy Industries Association ITC Fact Sheet.

Accelerated depreciation

Under the Federal Modified Accelerated Cost Recovery System (MACRS) businesses may recover investments in solar equipment through depreciation deductions. Solar equipment is classified as five-year property under the MACRS program.

Washington state solar incentives

12kW or smaller Solar systems installed after June 2018 qualify to receive payments or $0.14/kWh produced up to $5,000 per year until 50% of the system is paid for.

In addition to being paid $0.14/kWh, your power bill will be reduced by the amount of power that your system produces. If your system produces more than your home consumes the utility will credit your account for the power you added back to the grid. Credits can be carried from month to month but will reset at the end of the utilities annual billing cycle, typically in April each year. Savings can be even better for businesses!

It is important to note that incentives drop each year in June through 2021 and while systems over 12kW have a drastically reduced incentive at .04 (which also drops each year) there is a point with a large enough electric bill, that a large system can be financially benificial. –we like to say the math does come back around!!

Washington state solar production incentive and net metering

Solar systems installed with both Washington built panels and inverters qualify to receive payments of $0.21/kWh produced up to $5,000 per year.

In addition to being paid $0.21/kWh, your power bill will be reduced by the amount of power that your system produces. If your system produces more than your home consumes the utility will credit your account for the power you added back to the grid. Credits can be carried from month to month but will reset at the end of the utilities annual billing cycle. Savings can be even better for businesses!

Property value increase

A study published by Lawrence Berkeley National Laboratory compared California home sale prices for homes with solar energy systems to those that did not. The study’s data set was over a 8 1/2 year time frame using a 3.1 kW average system size and found that on average solar homes went for $17,000 more than their non-solar counterparts. A general rule of thumb is that any home improvement that lowers your electricity bills by $1000 annually will increase a home’s value by about $20,000.


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