Written By: Tamara Staton
Get some of your State and Federal taxes back!!
How would you spend your taxes? Put them back in your pocket!!!
Tax season is here! Don’t know about you, but we LOVE getting a big fat credit from Uncle Sam. Did you know that Washington residents who install a new solar PV project qualify for a substantial federal tax credit and an annual check from Washington State? They are literally paying you to go green. Is this some sort of magic?? No -- just some wonderful legislation by our state and federal government.
In 2006 the Federal government enacted the “Investment Tax Credit” or ITC to encourage growth in the development of green energy, including Solar PV systems. In 2015 this investment into renewables was extended through 2021 for residential installations and in perpetuity for commercial installations. Although the % of credit decreases over time.
Following suit, the state of Washington enacted their “Production Based Incentive” AKA “Feed In Tariff” or FIT program that same year. This program was wildly popular and quickly ran out of funds. In 2017 Governor Inslee signed legislation to add additional funding to the program. This additional 110 million dollar investment by the state has been so popular that while it was planned to last through 2020, it appears it may not last the year.
How many solar incentives are available for Washington state residents? (hint: 3)
Washington State pays residential homeowners based on their annual production, and the sooner you install a system , the sooner you can start producing your own clean energy and making the sun work for you. In a time when it seems that only large corporations and the wealthy are getting kick backs, these are programs that assist the average working class family and small businesses to make a difference. To be able to determine how their energy is produced. To do their part for the environment. But despite the lack of public pomp and circumstance, Washington residents now have an amazing opportunity to generate money on energy by taking advantage of recent funding to the Washington State Renewable Energy System Incentive Program
Receive Payments for up to Eight Years
This FIT Production Incentive is the program managed by Washington State University (WSU) and administered by your local utility to pay you for every kilowatt hour (kWh) produced by your renewable energy system, regardless of how much electricity you use. Incentive payments will be made for eight fiscal years (up to $5,000 per year), or until cumulative incentive payments reach 50% of the total system price, whichever occurs first.
The Sooner you Install, the More you Save
Your incentive rate is based on the fiscal year of your solar system’s certification by WSU . The rate decreases every year thru 2021, so the sooner you install the higher the rate you are able to secure. Once locked in, you will reap the benefits at the same rate for the entirety of the program. 12kW is the maximum residential system size. Systems larger than 12kW benefit from the commercial incentive rates. The new program’s cumulative incentive budget over the life of the program is capped at $110 million. Ownership of the renewable energy credits or "green tags" remains with the customer-generator, and your solar electric system must be certified by the State Department of Revenue. Check out the Incentive structure breakdown in the graphic below.
Washington-Made Bonus Rate Available
On top of these savings, a made-in-Washington bonus rate is applicable to renewable energy systems with solar modules that are made in Washington (There is no longer a made-in-Washington bonus for inverters). As outlined in the graphic, if you install and receive certification for a residential solar PV system with WA-made modules in fiscal year 2018, you would lock in your rate of 21 cents per kilowatt hour for the life of your incentive.
Additional Savings Opportunities
In addition to the FIT Production Incentive, there are two additional incentives Washingtonians can utilize to offset the cost of a renewable energy system: Net Metering and a Federal Tax Credit.
Any solar electricity that you generate that is not locally consumed goes to the grid, spinning the meter backwards, storing your surplus energy on the grid to be used later. Every kWh you send to the grid is a kWh you don’t have to buy later. At the end of any billing period, if overall electric production exceeds consumption (indicated by a negative meter reading), a billing credit at current retail rates is applied to your next bill.
A Federal Tax Credit of 30% is also available to individuals and businesses towards the cost of solar technology installations. The credit applies to the total remaining after any utility incentives have been taken, if available.
Let Us Help you with the Details
It can feel overwhelming to know if, how, or when to dive into a savings opportunity, particularly when saving requires spending. But we at Synchro Solar are eager for you to take advantage of benefits when they come along. With the planned rate decrease over time, those who are ready and able to dive into solar will end up with the biggest savings over time. John Kim, our Solar Manager here at Synchro, has been selling systems for a number of years. He knows that there’s no better time to go solar than right now. “As time passes,” he says, ”the incentive reduces, and the opportunity to get the maximum 50% offset from the State will slip away. In the meantime, nearly 40% or more of the energy produced on your behalf will continue to come from non-renewable, dirty sources, like fracking for natural gas, coal, and even nuclear. This time, you get to choose where your tax dollars get spent.”
The Federal government and the State legislature have both done their parts to invest in green renewable energy for home and business owners. You can join the movement to help our environment while taking advantage of these investments and do your part for the planet.
Please don’t hesitate to reach out and contact one of us to discuss these excellent opportunities with you so you, too, can create your own positive energy.