Solar Incentives for Washington

Current Incentives

The following is a summary of the main tax credits and incentives that are currently in place to make solar more affordable to those interested in installing a solar system in Washington. Click for a list of Washington utilities to find out more about your utility’s solar programs including net metering, if your utility participates in the state production incentive program, interconnection, and more.

Federal Income Tax Credit

The Solar Investment Tax Credit (“ITC”) is a federal tax credit for solar systems placed on residential (under Section 25D) and commercial (under Section 48) properties. In December 2015, Congress acted to extend the 30% tax credit through 2019 with a step down in subsequent years: to 26% in 2020, to 22% in 2021, and thereafter it is 0 (zero) for home-owners and 10% for businesses.
The Wind Production Tax Credit declines on a different schedule than the tax credit for solar. Learn more about wind from American Wind Energy Association at http://www.awea.org/.

Sales Tax Exemption in Washington State

Solar PV systems of 10kW or less are exempt from sales tax. This exemption is available to both residential and commercial customers. This exemption will expire June 30, 2018. Click for more information.

Washington State Production Incentive

Passed unanimously by the Washington State Legislature in 2005, the Production Incentive was created using the following language.
“The legislature finds that the use of renewable energy resources generated from local sources such as solar and wind power benefit our state by reducing the load on the state’s electric energy grid, by providing nonpolluting sources of electricity generation, and by the creation of jobs for local industries that develop and sell renewable energy products and technologies.”
EXCERPT from RCW 82.16.110
By rewarding property owners for installing Made-in-WA solar systems at a higher rate, the hope was to launch clean renewable energy manufacturing in our state.
The Production Incentive is an annual payment based upon the total kilowatt hours (kWh) produced by a solar photovoltaic (PV), biogas, or wind system up to a maximum payment of $5000 annually.
Incentive rates are based upon a base rate of up to $.15/ kWh for equipment made out of state. The combination of a WA Made inverter with out of state solar panels earns up to $.18/ kWh. The combination of WA made panels with out of state inverter earns up to $.36 and when both the inverter and panels are Made in WA, the maximum incentive rate is $.54/ kWh for homes and businesses. Community Solar projects earn at a rate that is double the rate for an individual property owner (home or business owner).
The funding comes out of Public Utility Taxes that each utility would otherwise pay to the State. Utilities are charged with reading the meters and tracking the annual payments to customer generators.
Not only is there a cap of $5000 on the amount of funds any individual (or couple) can earn, there is also a cap of how much each utility can redirect out of their taxes they would be paying to the state. Each utility’s annual pool of funds available to pay the Production Incentive is capped at .5% of their taxable sales for the year.
The Production Incentive program expires June 30, 2020 and no payments will be made for kWh generated after that date.
To find out how the caps affect the incentive rates your utility is paying, you must contact your utility. It is different for each one. Some utilities simply closed their solar programs and are not allowing more people to join them. Others are reducing the payment to each participant and continuing to keep the doors open for new participants.
NOTE: During the 2016 Legislative Session in Olympia, HB 2346 was introduced to address the problem of declining incentives and to keep adoption of solar moving forward. HB 2346 passed the House but did not pass the Senate. It would have raised the cap allowing utilities to spend up to 2% of taxable sales on solar incentives. It also would have created a new incentive program at lower rates to help continue the amazing growth of solar in our state.
The Washington Production Incentive is the primary reason why the growth of solar in WA has been so strong in recent years. Click to view a chart showing the number of solar systems added each year from 2005 to 2015, courtesy of WSU Energy Office.
List of equipment approved for “Made in Washington” Renewable Energy Systems Cost Recovery Incentive payments. Click to view list.

Local Incentives

Snohomish County PUD, Chelan PUD and possibly others offer local incentives for home-owners and businesses who go solar. Inquire with your utility to find out if they offer any unique solar incentives. Here is a link to a comprehensive list of PUDs and utilities in Washington state.

Net Metering

Net metering allows system owners to receive credit for excess electricity produced by their system.  Net-metered systems that produce more electricity than needed are credited for the excess production at retail electric rates on the next month’s utility bill.  Credits carry forward month to month for a year period ending annually on April 30. Remaining credits are zeroed out on May 1 with no payment to the customer. Click for more information.

For businesses – MACRS Depreciation of Solar Energy property

The Modified Accelerated Cost Recovery System (MACRS) is a method of depreciation for some tangible property for tax purposes. Qualifying solar energy equipment is eligible for a cost recovery period of five years. The market certainty provided by MACRS has been found to be a significant driver of private investment for the solar industry and other energy industries. For equipment on which an Investment Tax Credit (ITC) or a 1603 Treasury Program grant is claimed, the owner must reduce the project’s depreciable basis by one-half the value of the 30% ITC. This means the owner is able to deduct 85 percent of his or her tax basis. The amount of the project cost that is eligible for a Bonus Depreciation is based upon the year of installation.
Special thanks to NW SEED for its contribution to the information found on this page. 
Disclaimer: The information presented on the Solar Washington web site provides an unofficial overview of financial incentives and other policies. It does not constitute professional tax advice or other professional financial guidance, and it should not be used as the only source of information when making purchasing decisions, investment decisions or tax decisions, or when executing other binding agreements. Please refer to the individual contact provided in each summary  or linked information to verify that a specific financial incentive or other policy applies to your project.
While the Solar Washington staff strives to provide the best information possible, Solar Washington make no representations or warranties, either express or implied, concerning the accuracy, completeness, reliability or suitability of the information. Solar Washington disclaims all liability of any kind arising out of your use or misuse of the information contained or referenced on Solar Washington Web pages. Page Here

Seattle City Light Cuts Back Solar Power Incentive

1. Seattle City Light is ratcheting back the incentives for people who use solar panels—and people like former Seattle mayor Greg Nickels are not happy about it.

People who put solar panels on their homes will now be receiving up to 35 percent less incentive money than the amount they were originally promised by Seattle City Light.

Historically, Seattle City Light used money from a state program known as the Renewable Energy System Cost Recovery Program that was created by the legislature to promote sustainable and green energy use. As part of that program, Seattle City Light told solar panel customers the would get $0.54 for every kilowatt-hour that their (Washington-made) solar panels generated energy. The rebates would be paid in five annual installments. Additionally, in an equation known as net metering, if the solar panels were generating more power than someone’s home was using in the first place, Seattle City Light would give solar users a credit on top of the rebates for all the power they put back into the city’s power grid.

But Seattle City Light topped out on the state program budget during the 2016 fiscal year, forcing them to scale back the program.

Nickels, who installed an 8.96-kilowatt solar panel system at his home last September, took to Facebook June 30 to voice his frustration over the change. The post garnered heated reactions from both sides, including from Mayor Ed Murray, who defended the city’s decision.

“Today is the end of the ‘Solar Year’ in Washington State,” Nickels wrote on his Facebook page. “This feels to me like a broken promise and will be a huge disincentive for others to install solar. And that’s a shame.”

Seattle City Light spokesman Scott Thomsen told Fizz Seattle City Light is not to blame for the drop in incentive money. Thomsen said the reason Seattle City Light reached the cap set by the legislature so quickly was because they more people were installing solar panels than anticipated, people were installing larger solar systems, and there were more days of sunshine in Seattle last year. Essentially, the program was a victim of its own success.

In a similar irony, Seattle City Light’s cap was also reduced due to lower electricity bills in general, which Thomsen attributed to lower heating bills for homeowners in recent milder winters and the increased number of energy efficient homes in the city in general.

Thomsen said Seattle City Light had two options when they reached their cap: end incentive programs for all future solar panel users, or cut the incentives for everybody. Mayor Murray chose the latter option for Seattle.

“Presumably, the incentives will keep going down until the legislature comes up with a fix for it,” Thomsen said.

Screen shot 2016 07 20 at 8.26.36 am jbvfmr

Nickels said one way the city could make customers feel better about the incentive cuts, was to have the incentive payments extended from five years to seven or eight years.

“If you make a promise that you’re going to pay $0.54 an hour, and someone makes an investment—in our case the investment was over $30,000 to install the system—I think you have an obligation to make them whole,” Nickels told Fizz. “[Seattle City Light] has taken advantage of the system to encourage people to make that investment.”

SCL’s Thomsen said they “made no promises about incentives.” He added: “We described the incentives that were available from the state. The limitations on those incentives are set by the legislature as would any changes. All utilities in the state must follow those rules. If anyone believes changes are needed, they should contact their legislators.”

Original Article on SeattleMet here

Response to Seattle Resolution 31684

A RESOLUTION relating to the City Light Department; acknowledging the 2016 Integrated Resource Plan for future energy efficiency and power resources needed to provide reliable, cost-effective, and environmentally responsible electric power to the citizens of Seattle as conforming with the public policy objectives of The City of Seattle and the requirements of the State of Washington; and approving the plan for the biennium September 2016 through August 2018.


Attention Seattle Council Members,

Seattle City Light (SCL) is limiting its strategy to a centralized, baseload model. They are not embracing the inevitable future of a decentralized, flexible, integrated, modernized energy grid. Their projections assume no disruptive technology NOR market driven adoption of independent, decentralized solar generation. The old utility model is on its way out, to maintain the status quo decades into the future is delusional.

Solar energy generation technology and storage are becoming more affordable every year; within 10 years we could see over half of all homeowners generating their own power. We only have to look to Germany who is the world leader incorporating renewable energy (includes high levels of solar) into their energy policy.  The Seattle area is positioned in a similar, if not better, weather environment than Germany.

If utilities, such as Seattle City Light, do not prepare the grid or mindset for this inevitability, it will become a crisis for the City of Seattle and the many consumers still dependent on the centralized electricity. This will necessarily bias the costs to fewer people. Rates will continue to skyrocket.

This shift has been described in the visionary book by Jeremy Rifkin, “The Third Industrial Revolution.” It is compared to the rapid evolution of the telecommunications industry — desktops to smartphones in less than 20 years.  We are seeing the shift in centralized media, news and information from TV, newspapers, and radio to online independent sharing of information from all around the world instantaneously — full realization of ‘Freedom of Speech’, by all for all. This was the second industrial revolution. The first industrial revolution was oil and the machine; automobiles. Horse and buggy shared the road with Model-T’s for a time, until it became imperative that we all have automated transportation to survive in our modern society.

The same will happen with energy. As a society, we are in the earliest stages of independent energy generation. For now it’s the early adopters; those who have the resources and the technical where-with-all, will be first.

We at Safe Utility Meters Alliance Northwest, began our advocacy because of the callous harm inflicted on us and trampling of our constitutional rights of privacy and security for our persons, houses, and effects caused by Advanced Metering Infrastructure (AMI). The only reason that SCL must deploy AMI is to protect their revenue amidst an obsolescing energy grid model. The utility is already experiencing reduced residential demand due to conservation efforts, forcing them to look for new customers to maintain demand for baseload.

We must realize that a strategy for the future public energy grid needs to include: reliability at lowest cost and risk, and the most environmentally friendly technology. This depends on embracing an independent, decentralized, flexible, renewable energy grid. This requires that SCL look beyond the status quo, and an illusory refuge of the centralized, economies of scale model.

They admit in their own Strategic Plan “that the Electric Industry is changing and that the reality is that customers may not need traditional utility service tomorrow as they do today.” So why then, are they not taking the leadership in enabling the energy of the future?

SCL is being complacent at the public’s peril.

Seattle City Council Select Committee on SCL Strategic Plan July 2016

SUMA-NW Representatives Sonia Hoglander and Nancy Morris give testimony to the Seattle City Council opposing “smart” meters.

SUMA-NW Members Rebecca Campbell and David Ward follow up with additional testimony.

Seattle City Light was asked what the impact would be to delay the $95 MILLION AMI Project for 3 years and/or 6 years. Stunning!

 

 

SUMA-NW Status Report July 5, 2016

Core members have been working behind the scenes over the past half year to move past the decision by the Seattle City Council (SCC) to fund the Advanced Metering Infrastructure (“smart” metering system) for Seattle City Light (SCL) in late 2014.

There have been informational presentations (big thanks to David Ward for putting together an excellent PowerPoint, which we hope to make available soon on our website), networking opportunities with certain activist groups (updates later), attendance and testimonials at the SCC, and of course flyering at various venues.

A major event was our meeting with Larry Weis, the new General Manager for SCL, confirmed on March 20, 2016.

On April 4, 2016, SUMA met with Mr. Weis, Kelly Enright (Customer Care Director and AMI Project Manager) and Sephir Hamilton (Chief of Staff). SUMA was represented by Sonia Hoglander, Nancy Morris and Dr. Timothy Schoechle. It was an informative and cordial meeting. We raised additional cost/benefit analysis issues and discussed our concern about the green-washing of alleged benefits of so called “smart” meters.

As result of that meeting and a Public Document Request we received the SCL Cost Benefit Analysis used to justify the investment in AMI. In summary the analysis:

  • Focused on Build or Buy options – they decided to choose a 3rd Party Hosted Solution (the data will be managed between the meter on your house to the billing system at SCL by an independent, for profit, corporation)
  • AMI is a Revenue Metering system; some speculate it could be part of a “Smart” Grid if it is built.
  • Cost Savings are labor focused; billing staff, meter testers, disconnect/connect services, meter readers
  • Digital meters are more precise than analog meters increasing revenue 1% per customer
  • Costs based on a 15 year lifespan of the meters

What was NOT analyzed:

  • Environmental impact, because there is no value
  • Conservation impact, because there is no value
  • Consumer risk/impact, because this is not for the customer this is for the revenue
  • Meter replacement costs; actual lifespans of meters are not what the manufacturers claim and NO digital meter can match the lifespan of an analog meter at 50 years

Reaching out to new Seattle City Council Members:

  • We sought meetings with Juarez and Gonzalez
  • We met with Juarez’s office
  • We provided updated and new information regarding the cost/benefit analysis and greenwashing

New Talking Points reflect new discoveries:

  • Greenwashing of intent to upgrade revenue meters to automate services and reduce labor costs
  • Environmental benefit exaggerated to sell SCC and public
  • Costly to consumers with no actual benefit

Proposed Strategies:

  • Network/Ally with other activist groups
  • Reach out to City Council members, Chambers of Commerce, Town Halls
  • Organize mass opt-outs by city/neighborhood
  • Shift focus from Anti-AMI to Pro-Grid modernization
  • Tabling and Presenting at SolarFest in Shoreline July 23rd
    • Volunteers are welcome

We are planning a General Meeting in late Summer to early Fall, to present our Mass Opt-Out Campaign.