Generous solar tax credits and incentives can substantially reduce the cost of installing a solar electric system. Your sales consultant will go over these with you during your free site visit. Below we have listed the current incentives that apply to most Oregon and Washington residents. Please note that incentives and tax credits can change frequently, and are generally lowered or eliminated with short notice.
Net metering is an agreement between a residential or commercial customer and their electric utility to allow consumer generated solar power to be feed into the grid and credited towards the customer’s account (your meter spins backwards!). Whether you consume the electricity or feed it back into the grid, you will see the savings on your electricity bill.
Federal Tax Credit: 30% of the system cost, minus utility incentive.
Federal Tax Credit: 30% of the overall cost.
Oregon Residential Energy Tax Credit: $2.10 per watt, up to a maximum of $6,000 ($1,500 maximum each year until full credit or maximum is reached).
Energy Trust of Oregon utility incentive: $1.00 per watt for Portland General Electric customers (maximum $6,500) and $.75 per watt for Pacific Power customers (maximum $5,000).
Oregon Business Energy Tax Credit: Up to 50% of the system cost. The credit is filed over 5 years: 10% in the first and second years, and 5% per year thereafter.**
Energy Trust of Oregon utility incentive: $.75-$1.25 per watt for PGE customers with a maximum of $500,000 for a single site and $600,000 for multiple sites. The incentive for Pacific Power customers is $.50-$1.00/watt with a maximum incentive of $100,000. For more information, seeEnergy Trust Solar Electric for Business.
**The Oregon Business Energy Tax Credit (BETC) has experienced a number of changes, including legislative modifications in February 2010 that set up a tiered system for renewable energy proposals. These are processed on a first-come, first-served basis, and all funds have currently been allocated.
Sales Tax Exemption (Residential & Commercial)
Solar installs receive a sales tax exemption (8.5-10% savings) through June 30, 2018. This covers the full installed price for installing a solar photovoltaic system smaller than 10kW (covers most residential systems). For larger systems, customers must pay sales tax upfront, but are eligible for a 75% remittance immediately after a system is installed.
Production Incentive (Residential &Commercial)
In addition to not paying for the electricity offset through net metering, the State of Washington pays solar customers a production incentive ranging from $0.15-$0.54/kWh with a maximum incentive payment of $5000/yr. The rate for the production incentive is based on the source of the equipment. Below is a breakdown of incentives for various system configurations.
- Out of state solar modules with an out of state inverter = $0.15/kWh
- In-state solar modules with an out of state inverter = $0.36/kWh
- In-state solar modules with in-state inverter = $0.54/kWh
For example if a fully made in Washington system that produces 5000kWh/yr will receive an incentive payment of $2700 ($0.54 x 5000kWh) each year until 2020.
Disclaimer: Consult your tax professional to learn how tax credits and rules apply to your project. This information does not constitute tax advice and cannot be used to avoid tax penalties.