When you combine the 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 area makes 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!
26% Federal Income Tax Credit
Solar electric systems installed in 2021 qualify for the 26% federal solar income tax credit (ITC) and 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! The federal ITC steps down to 22% in 2023.
All Solar electricity generated that is not used at 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 for solar energy.
5-Year Accelerated Depreciation for Businesses
Businesses qualify for a full 5-year Modified Accelerated Cost Recovery System (MACRS) depreciation tax deduction on 85% of the cost of the solar system. Some home-based businesses can qualify, too.
Increased Appraised Value of Your Property
Adding a solar energy system to your home adds to the resale value of your home and makes it more attractive to prospective buyers.