Financial Incentives

     R Net Metering
     R Utility Rebates
     R Washington State Production Incentive
     R Federal Tax Credit
     R Green Tags
     R Pre-Purchase of Power

There are currently many financial incentives available to help off-set the up front cost of purchasing a renewable energy system.  This page will list each of the various rebate, tax incentive, and production incentive programs available for customers in Clallam, Jefferson, Kitsap and Mason Counties.  For additional information please check out www.dsireusa.org which provides a great comprehensive overview of financial incentives available in Washington State and elsewhere in the country.    

Net Metering

Washington State’s net metering law allows you to connect your solar electric (PV) system directly to the utility grid and requires utilities to value power generated by your grid-tied solar electric system at the same rate per kilowatt-hour (kwh) that the utility charges you for power from the grid.  Connection to the utility grid allows batteries to be eliminated as an energy storage device.  The utility grid becomes the energy storage device.  When your grid-tied solar electric system produces less power than your home or business consumes (think short, cloudy winter days) the utility grid will provide the additional energy you need.  When your grid-tied solar electric system is generating more power than your home or business uses, the excess power goes back to the grid and you will be credited for this power production. 

Washington's net-metering law applies to systems up to 100 kilowatts (kW) in capacity that generate electricity using solar, wind, hydro, biogas from animal waste, or combined heat and power technologies (including fuel cells). All customer classes are eligible, and all utilities -- including municipal utilities and electric cooperatives -- must offer net metering.  

Washington State Renewable Energy Sales Tax Exemption

 This is the simplest of the government incentives in that Power Trip Energy will not charge sales tax on the sale of solar electric equipment, thereby avoiding the 8.4% sales tax. 

Utility Rebates

 Clallam County PUD currently offers a $500 per kilowatt for grid tied solar electric systems at the time of installation.  The PUD also offers a $500 rebate for solar thermal systems when they are connected to an electric water heater. 

Puget Sound Energy is no longer offering any rebates. 

Washington State Production Incentive

In 2005 Washington State adopted the Renewable Energy Production Incentive Program (REPIP) establishing production incentives of 12¢ to 54¢ per kilowatt-hour (capped at $2,000 per year) for individuals, businesses, or local governments that generate electricity with grid-tied power systems from solar power, wind power or anaerobic digesters. These incentives are in addition to the savings you can achieve through net metering.  The production incentive rates depend upon the source of your energy and whether your equipment was manufactured in Washington State.  The incentive levels are:

• For electricity produced using out of state solar modules and inverters the rate is $0.15 per kilowatt hour (kwh);

• For electricity using solar modules manufactured in Washington state with an out of state inverter the rate is $0.36 per kwh;

• For electricity using both solar modules and an inverter manufactured in Washington state the rate is $0.54 per kwh;  

• For electricity produced using a solar or wind generator equipped with an inverter manufactured in Washington state the rate $0.18 per kwh;

• For electricity produced using an anaerobic digester or using a wind generator equipped with blades manufactured in Washington state the rate is $0.15 per kwh;  

• And for all other electricity produced by grid-tied wind the rate is $0.12 per kwh.

Participation in the REPIP program is voluntary and varies from utility to utility.  Currently on the north Olympic Peninsula Clallam Co. PUD #1, Puget Sound Energy, and Mason Co. PUD #3 all participate in this program (Mason Co. PUD #1 is considering enacting the program).  Participating utilities will pay the incentives to the producing customer and earn a tax credit from the State of Washington equal to the cost of those payments.  The incentives apply to power generated as of July 1, 2005, and are currently slated to remain in effect through June 30, 2014.

Links to additional information on production incentives:

·         Wash. State Dept. of Revenue REPIP Application Form

·         Wash. State Dept. of Revenue REPIP Info Sheet

 

Federal Tax Credit

Residential and commercial customers who install solar electric systems qualify for a federal income tax credit equal to 30% of the cost of their solar electric system installed in tax years 2007 and 2008.  For residential customers this tax credit has a maximum cap of $2,000.  There is no similar cap for commercial customers. 

Commercial customers with home based businesses may be able to take advantage of a portion of the 30% tax credit, equal to the proportion of the home that their business occupies.  Commercial customers can also take advantage of IRS rules that allow renewable energy systems to be depreciated over an accelerated 5 year period.  Please consult with your tax professional on commercial tax credit and accelerated depreciation issues.

For an excellent discussion of the IRS tax code and the renewable energy credits, please see http://www.powertripenergy.com/incentives/seiataxmanual.pdf.

Green Tags

As a producer of clean solar power, you will be eligible to join green tag programs to sell your green power.  Currently the Northwest Solar Coop is entering into 5 year contracts with residential solar producers which pay an additional $.02 per kwh over and above the Washington State production incentive mentioned above as well as in addition to your savings for not using power from the grid.   

Links for additional information on the green tags program:
·  Green Tags Application Form:  http://www.cascadesolar.com/3phase_app.pdf
·  Green Tags Contract:  http://www.cascadesolar.com/3phase_contract.pdf 

Pre-Purchase of Power

By purchasing and installing a grid-tied solar electric system you are pre-purchasing your power and locking in your utility rates at a predictable price.  Does anybody know what the price of utility-provided petroleum-based electricity will be next year?  Ten years from now?  Thirty years from now? That is how long you can expect your grid-tied solar power system to be working.  Of course, there are also many other benefits to outfitting your home with a renewable energy system other than the financial incentives.