In the State of Washington, there are two incentives that are often conflated when solar power is being discussed: Net Metering and the Washington State Production Incentive.
Net Metering is an arrangement wherein you trade kilowatt-hours (kWh) with your utility. If your home or building is producing more electricity than it is using the excess flows out to the grid, spinning your meter backward.
In the Pacific Northwest we get 74% of our sun in six months. Also, electrical consumption is often significantly lower in those peak producing months.
As a result, a solar array in Seattle will feed a lot of excess kilowatt-hours into the grid during the summer. Net Metering allows you to "bank" that extra energy with your utility to be used in the winter months when solar production drops and electricity consumption rises.
The fiscal year for Net Metering is from May to April. If you still have kWh “in the bank” at the end of April you forfeit their value. For this reason, systems designed to exceed more than 100% of the consumer's annual production. Net metering does not have an expiration date.
The Washington State Production Incentive
Meanwhile, the Washington State Production Incentive pays you for every kilowatt-hour your produce. This means you get paid for every kilowatt – even the ones you consume. This allows you to recoup your investment in solar by producing electricity until the program ends in 2020. What a deal!
The base premium for the Washington State Production Incentive is $0.15/kWh for every kilowatt-hour produced. However, if you use a made in Washington State components there are incentive multipliers that increase your premium.
See Also: Washington State Solar Incentives.