“The currency of the world is not the dollar, it’s the joule.” – Nathan Lewis, CalTech
Over the last few years, I’ve been paying more and more attention to “green” stuff. I’m pretty sure this will be a huge deal in the near future.
Oh, and if it’s been a while since your last physics class, the joule is a metric to measure energy. Now read the quote again.
In April this year, President Obama signed the Energy Efficiency Improvement Act of 2015 into law. The estimates are that this will cut utility bills for landlords and tenants by $2 billion by 2030. With that, I was browsing through current incentives for Washington State residents and found a couple that appear to have some substance to them. As with all programs or incentives, they have deadlines and restrictions. I’m not including the manufacturer or product specific incentives here. Just basics.
First, let’s get an important acronym out of the way. Solar PV. PV means photovoltaic.
(Sidebar for a point of reference. This is in contrast to Solar CSP, which is concentrated solar power. You know how DVD and Blu-Ray had a turf war about who was the better technology? Solar PV and Solar CSP are kind of the same thing. I think PV has a much sexier appeal to investors so it might jump ahead. You can install PV almost anywhere. CSP needs things like better light, access to water, and large scale operations.. but CSP is way better at storage than PV. Back to the story.)
So, assuming you want to spend money on energy efficient things, let’s talk about some ways you can spend less on those very same things. Hey.. green can be interpreted a few different ways. Environmentally conscious, sure. Dollars in my pocket, absolutely!
30% Federal Income Tax Credit
Home owners may claim a credit of 30% of the cost of solar systems – solar electric (PV) and Solar Hot Water (SHW) – installed on a residence that is owned and used as a residence by the taxpayer. Sorry investors, you’re out on this one. Costs may include labor costs for on-site preparation, assembly or original system installation (not upgrades), and for wiring to interconnect a system to the home. If the credit earned by the system exceeds a single years tax liability, the excess credit may be carried forward to the following taxable year. Systems must be placed in service before December 31, 2016.
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, so you can use this one anywhere. This exemption is taken at the point of sale and is not a reimbursement. This exemption will expire June 30, 2018.
Solar systems greater than 10kW qualify for a 75% refund of the sales tax paid for qualifying machinery or equipment. You must file an Annual Tax Incentive Survey with the Department of Revenue and provide proof of tax paid. This exemption will expire January 1, 2020.
Washington State Production Incentive
“Production” means production of solar power here. Nothing else. The production incentive provides PV system owners with a payment of $0.15 to $0.54 per kilowatt-hour of solar energy produced. This incentive is paid based on the amount you produce, regardless if you use it or add it to the grid.
Let’s think “support local businesses” for a moment, it’ll pay handsomely. For a Washington state-made inverter, the rate is lifted to $.18/kWh. For solar modules made in Washington including itek Energy and Silicon Energy, you earn $.36/kWh. Then the granddaddy of them all.. If both modules and inverters are made in Washington the rate ju
mps to $.54/kWh. However, the incentive is capped at $5
,000 per household per year. Payments will be made until June 30, 2020.
First, let me define what this is. Think more along the lines of billing or accounting. If a residential customer has a Solar PV system on their ho
use during daylight hours, and they generate more energy than they use, there is a way to get “credits” for that from PUD. That’s net metering. Instead of running the meter forward and getting charged for electricity, you run the meter backwards as your energy adds to the power grid and get credits.
To make it sound all fancy.. 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. When we say “retail” here, we mean you are getting credits for the same amount of what you would have been charged. You don’t need to own an outlet mall, ha!
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. Did you catch that last part? On May 1st each year, you start with zero credits and “give” everything else to the power company that they already have accumulated from you. It’s like those roll-over minutes from AT&T. They just disappear if you don’t use them. Yeah.. found that one out the hard way.
Solar Express Incentive
The Solar Express Program is a Snohomish County PUD thing. This program offers a cash incentive of $300 per kW for qualifying Solar PV installations. The incentive is limited to $2,000 for residential customers and $8,000 for commercial customers. To be eligible for the incentive, the PV system must be installed by a PUD registered solar installer and connected to the PUD electrical grid (of course!). This program is reviewed annually, and adjusted by PUD.
Although all of these incentive programs are independent of each other, you can also combine them to form a very appealing solution and reduction in costs.
I’m not an expert in this field.. yet. If you’re looking for more information or incentives, there are a lot more available from local PUDs and Utility districts. You can also check out www.solarwashington.org or www.dsireusa.org. The lists tend to be a little out of date, but they are a pretty good place to start.
If you want some additional ideas on what might be beneficial to your particular property, give me a call at (206) 293-1005 or email: Jen@HudsonCREG.com. We’ll see how we can increase the property value, green up the environment, and keep some green in your pocket all at the same time.