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Financial Incentives
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Net Metering 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, Island, Jefferson, Kitsap, Mason, and Skagit 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. Power Trip Energy will handle the paperwork for all of the applicable financial incentives for our clients, and guidance to the proper federal tax forms for you and your tax professional. This is a substantial service that is included in our turn-key installations. There are intricacies to some of the programs that we will be happy to explain as we work with you. 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 on your utility bill. 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. All solar PV systems installed in Washington State of 10 kW or less are sales tax exempt through June 30, 2013. Systems over 10 kW in size are sales tax exempt through June 30, 2011 and after this date through June 30, 2013 systems over 10 kW in size qualify for a refund of 75% of their applicable sales tax. For systems over 10 kW, there is no sales tax through June 30, 2011. Between July 1, 2011 and June 30, 2013 systems over 10 kW qualify for a refund of 75% of the applicable sales tax.
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 $5,000 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:
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 #1 & #3 all participate in this 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, 2020. Links to additional information on production incentives: · Wash. State Dept. of Revenue REPIP Application Form· Wash. State Dept. of Revenue REPIP Info SheetFederal Tax CreditResidential 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 under the ITC (Investment Tax Credit.) Residential customers should review Form 5695, and business customers should review Form 3468. Click here for instructions form 3468 Commercial customers can also take advantage of IRS rules that allow renewable energy systems to be depreciated over an accelerated 5 year period. Please review the MACRS information and consult with your tax professional on accelerated depreciation issues. There are some changes to the business tax credit in the works as a result of the recent stimulus bill mainly the ability for businesses to take a grant in lieu of the tax credit. This new legislation is law, see section below for more information. For more detailed answers, please see the SEIA FAQ at http://wwwpowertripenergy.com/incentives/ITC_FAQ.pdf and most importantly, this is not tax advice, you should consult with your tax professional. Many tax pros are still unfamiliar with these federal programs and the responsibility to help these folks get up to speed on solar issues lies with you and us. Federal Grant in Lieu of Business Income Tax Credit for Solar PV Under the American Recovery and Reinvestment Act of 2009 (ARRA), the U.S. Treasury Department will provide cash grants in lieu of income tax credits for commercial solar PV (photo voltaic) projects. To qualify, the solar power system must be placed in service in 2009 or 2010 or, if construction begins in 2009 or 2010, must be placed in service by the end of 2016. The grant functions similarly to a refundable tax credit. The amount of the grant is equal to the amount of the income tax credit for which the owner of the project otherwise would have been eligible - 30% for solar grid tied PV projects. The grant does not qualify as taxable income of the recipient. The tax basis of the property for depreciation purposes generally is reduced by one-half of the amount of the grant (i.e., the tax basis for depreciation generally would equal 85% of the qualifying costs of the property). An applicant must own or lease the property and must have originally placed the property (solar PV array) in service. Federal, state, and local governments, tax-exempt entities, cooperative electric companies, and certain partnerships and other pass-through entities with such persons as direct or indirect partners or owners are not eligible for the grants. Utility Rebates Unfortunately our largest (privately owned) utilities are not offering any rebates, several of the public utility districts offer excellent rebate programs, and if you are lucky enough to be served by one of these PUD’s, we will handle the applications to get you these rebates: Clallam County PUD - $500 per KW of installed grid-tied pv. Orcas Power & Light - $1500 per KW of installed grid-tied pv, $4500 cap. Snohomish PUD - $500 per KW of installed grid-tied pv, $2500 cap. Solar Financing We are often asked if financing is available for solar projects. We will share information on low interest finance programs as we become aware of them. Clallam County PUD – Low interest, adjustable rate financing up to $15,000 through Clallam PUD and First Federal Savings and Loan that can be used for solar projects. Please make an appointment with Heather Wells at (360) 681-7679 or email heather.wells@ourfirstfed.com for more information about this First Federal loan program. City of Port Angeles – Low interest, adjustable rate financing through the City of Port Angeles and First Federal Savings and Loan with no maximum limit on the loan amount. Terms are for up to 20 years. No maximum loan amount. Contact the Kathi Larsen of the First Federal east side branch in Port Angeles (360) 452-1889, or email kathi.larsen@ourfirstfed.com to learn more about this loan program. Home Equity Loans – Any private lending institution at market rates. Manufacturer Financing – SunPower and some manufacturers now offer financing for their products, some of which is secured by the equity in your home, some is unsecured. Ask a Power Trip Energy Solar Agent for more information about these programs. |
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