There are a variety of incentives available in Washington State that significantly reduce the cost of a solar system – and help maximize your Return on Investment.
 
Federal Tax Credits
 
The Federal Government allows you to claim a Tax Credit of up to 30% of your total system cost on your tax return. What is more, you can roll it over, meaning that if you can’t use the full value in the first year, you can claim the remainder in the next year. There are two programs in the IRS code: The Residential Energy Efficiency Credit in section 25D of the tax code is for individuals and is claimed on the Form 1040, and Form 5695.  This credit is applicable to your Alternative Minimum Tax (AMT) as well.
For solar that is purchased and installed on a business, the Investment Tax Credit program in section 48 of the tax code provides a 30% credit + MACRS depreciation up to 85% of the project cost, or 'basis'.
This incentive is is good through 2021 and is reduced after 2019.

A tax credit is a dollar-for-dollar reduction in the income taxes that a person or company claiming the credit would otherwise pay the federal government. The ITC is based on the amount of investment in solar property. Both the residential and commercial ITC are equal to 30 percent of the basis that is invested in eligible property which have commence construction through 2019. The ITC then steps down to 26 percent in 2020 and 22 percent in 2021. After 2021, the residential credit will drop to zero while the commercial and utility credit will drop to a permanent 10 percent

Commercial and utility projects which have commenced construction before December 31, 2021 may still qualify for the 30, 26 or 22 percent ITC if they are placed in service before December 31, 2023. The Treasury and IRS are currently drafting guidance which will inform solar developers of which percentage of ITC they will qualify for depending on when they started their project

Washington State Production Incentive
 
The Washington State Production Incentive is funded by the state government and managed by your local utility. This program pays you for every kWh you produce, so a separate meter is used to record that.
 
The program has been so successful that in many utility districts the funding limit has been reached.  Some smaller utilities have closed the program to new applicants.  Seattle City Light, Puget Sound Energy, and Snohomish PUD will be prorating the incentive to divide up the total fund available among the kilowatt hours that are applying for it.
 
For a 5-kW system in Seattle, on a South-facing 4:12 roof with 95% solar access, the annual production would be around 5263 kWh per year,
Production Incentives are paid on top of the Net Metering benefit you’re already receiving and is capped at $5,000/yr until June 30,2020, when the program is set to expire.
 
Net Metering
 
Net Metering, an incentive available since 1996, is a contract that you sign with your utility allowing you to trade power with them at retail rates. When you produce more energy than you consume the excess kilowatt hours are fed into the grid and credited to your account. When you produce less than the consume, you purchase electricity from the utility. See: Net Metering Explained.
 
Sales Tax Exemption
Washington State extended the Sales Tax Exemption for solar systems under 10kW until 2018. This means you pay no sales tax on the full invoice for installing a solar photovoltaic or solar hot water system for systems smaller than 10kW. This saves you 8.5-10% on your system price.
 
For systems over 10kW, the full sales tax must be paid first, and then the the customer may apply for a rebate of 75% of the tax. This remittance expires at the end of 2019.
 
Rebates
 
Rebates, or "cash back incentives," for solar systems in Washington vary from utility to utility. Check out your utility's website to determine if rebates are available in your service area.
 
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