Utility and Tax Incentives
When you combine Washington State’s solar power incentive program with federal solar incentives, offsetting your electric usage and locking in escalating utility rates, the Seattle and Puget Sound areas make sense as a secure green investment.
Washington State Solar Incentives
The Washington state solar incentive program rewards homeowners 6.5% to 10.4% for going solar in the form of a sales tax exemption! This is a $2,000 incentive for a typical-sized system. The exemption is included in the 100% Clean Energy Act, signed into law on May 7, 2019.
The Clean Energy Act mandates that all Washington electric utilities transition to 100% carbon-neutral electric supply by 2030 and 100 percent carbon-free by 2045!
Federal Investment Tax Credit – 30%
Solar electric systems installed from 2022–2032 qualify for the 30% federal solar income tax credit* (ITC) and step down to 26% in 2033. If energy storage is included, it qualifies too. The ITC can be carried back 1 year and forwarded 20 years. This means that if you had a tax liability last year but don’t have one this year, you can still claim the credit. If you had no tax liability last year or this year, you can keep the credit on your books and use it any time you have a tax liability over the next 20 years. Don’t wait; prices for solar equipment are on the rise!
Net Metering
All Solar electricity generated that is not used at the time of generation will be fed back to the utility grid, and you will be credited for these surplus kWh’s (this is analogous to your utility meter spinning backwards). Your monthly utility bill will be the difference between your generation, any surplus solar kWh’s from previous months, and your energy consumption. For the months that you generate more than you consume, these credits will be forwarded to the next month(s). Whether you use your solar energy or feed it back to the grid, you eventually get to use your accumulated solar credits.
Washington’s Solar Fairness Act sets each utility’s minimum metering threshold to 4%. This is an 8x increase over the federal mandate of 0.5% and allows for continued growth in solar energy.
Increase Home Value
Having a residential solar energy system on your property is known as a capital improvement that adds to your property’s value. This means that you can potentially sell your home faster and for more than homes without solar. Your investment in efficient, clean solar power also adds to the tax basis of your home. If you sell the home, this tax-based investment can be deducted from the sale’s price, reducing the amount of the price that is counted as profit. This reduces the taxes taken from the sale and may be able to help you avoid capital gains taxes on appreciation.
