Washington State Solar Incentives 2020
When installing solar panels in Washington, homeowners are eligible to get 26% the cost of installing solar back in taxes using a federal solar tax credit while paying no local or state sales tax (effective July 1st, 2019).
Combined with lower prices, tax breaks, and solar panels that can produce more energy, many Washingtonians are choosing to invest their money into solar.
Washington State Tax Exemption for Solar Installations
Beginning July 1, 2019, new solar energy systems under 100 kilowatts (that’s a lot for homes) are exempt from all state and local sales tax. This new Washington state tax exemption for solar is good through December, 2029.
For an average sized residential system, this will save homeowners $2,500+ on the total project cost.
26% Federal Solar Investment Tax Credit (ITC)
This federal tax credit reduces your federal tax liability on a dollar-to-dollar basis. There is no upper limit to how much tax credits you can get. It is worth 26 percent of your final project cost.
To be eligible to receive the full 26%, you need to install and have your system operating before the 1st day of January in 2020. Below is a list of scheduled changes expected to take place and you should put them into consideration while planning to invest in solar.
2020: Owners of new residential and commercial solar can deduct 26 percent of the cost of the system from their federal tax liability.
2021: Owners of new residential and commercial solar can deduct 22 percent of the cost of the system from their taxes.
2022 onwards: Owners of new commercial solar energy systems can deduct just 10 percent of the cost of the system from their taxes. There is no federal credit for residential solar energy systems.
How Does The Federal Solar Tax Credit Work?
When you receive your final invoice, you will claim 26 percent of that on the same year's taxes. For example, when the final cost to install solar panels are $10,000, you will receive $2,600 back in federal tax credits.
Solar Net Energy Metering (NEM)
Net Metering in Washington state is how your utility compensates you for providing clean, renewable solar energy to your neighbors and the local electric grid. After you switch on your new solar energy system, your utility will begin to spin your meter backward when you're producing more (solar) energy than how much energy your home is consuming! Each time you send excess power to the grid, the solar energy gets used nearby (by your neighbors) and you accumulate energy credits.
How Does Net Metering Work?
Net metering works by compensating you for the excess solar power you produce from your home. For example, if in one billing cycle your solar panel system generates 1,000 kilowatt-hours of solar power while consuming 650 kilowatt-hours of energy this earns you 350 kilowatt-hours worth of solar energy credits. These credits are used when you’re using more energy than you are producing, such as at night time.
Are Solar Panels Worth It?
Let our team help you determine whether solar is the right fit for your today's lifestyle and financial goals. Get started by giving Sunbridge Solar a call at (360) 313-7190 or complete a quick free consultation form and we will give you a call instead.