The 2022 Inflation Reduction Act, (IRA) includes numerous clean energy and transportation incentives designed to help reduce carbon emissions and promote US manufacturing.
Due to the complexity of the IRA, we’re going to discuss solar incentives for homeowners here and focus on commercial solar incentives and electric vehicle charging station incentives in future blog posts.
Federal Incentives Available In 2022
Federal financial incentives are available to help reduce the overall costs of going solar for homeowners. The Inflation Reduction Act extends and modifies a Federal program (in existence since 2006), known commonly as the “Solar Tax Credit.”
Homeowners installing a 1) solar photovoltaic (PV) system, 2) a solar+storage system or 3) a stand-alone storage system can apply for the tax credit on their next years taxes (or roll it over several years if they don’t have the tax appetite to use up the credit in a single year).
The tax credit applies to the entire cost of the solar or energy storage system including related materials, labor and permits. Any related electrical or structural work that needs to be done, like upgrading your electrical panel so solar or storage can function, also qualifies for the tax credit.
Replacing your roof is NOT considered part of the solar tax credit. If you are building a structure to support the solar, like a ground-mount, an awning, gazebo or a carport, that likely qualifies for the solar tax credit. (It’s always best to consult with your tax advisor for clarification.)
2022’s Federal Solar Incentive Is Retroactive
The Federal solar incentives are retroactive to the start of 2022, so people who installed solar in the early part of 2022 thinking they would get 26% are actually eligible for a 30% Federal Tax Credit when they file their 2022 taxes. On a $30,000 system, the 4% difference saves people an additional $1,200. A nice unexpected bonus for those who already went solar in early 2022 before the IRA was passed!
Solar Incentives For Washingtonians
Washington State has a sales tax exemption for solar or solar+storage projects, roughly a 10% savings, depending on the County where you reside. In Seattle, it means a homeowner can save roughly 40% off the full costs of going solar (when combined with the 30% Federal Tax Credit).
Net-Metering is another important solar incentive in Washington where you trade kilowatt-hours (kWh) with your utility. If your home or building is producing more electricity than it is using, the excessive kilowatts flow out to the grid, building kilowatt credits with your Utility, a.k.a., “running your meter backward.” We get 74% of our solar access over six months of time, spring, summer and early fall, so Net-Metering essentially serves as your “storage” for over-production during the sunny months that you get back on a 1-1 basis from your Utility as needed.
You do not get paid by your electrical utility. This is a common misunderstanding. You simply get kilowatt hour credits when your system overproduces.
Stackable Incentives
Homeowners can take advantage of the 30% tax credit, no sales tax (~10%) and Net-Metering to save a large amount of money over time on their electrical costs while also increasing the value of their residence. You can “stack” the benefits to save the planet while saving your money.
More Value For Your Money With Puget Sound Solar
Puget Sound Solar installed the first licensed, grid-tie solar photovoltaic system in Seattle back in 2001. We are the most experienced solar installer in the Pacific Northwest and several of our employees have been with the company for more than a decade. That experience is valuable, unmatched and our pricing is highly competitive.
Puget Sound Solar also offers an industry-leading 25-Year Workmanship Warranty, a 10-Year Performance Guarantee and 10-Years of Solar Monitoring to give you peace of mind that your system will work as we promise, for decades to come.
So, when you’re ready to get a free, no pressure, customized quote, please give us a call at 206-706-1931 or fill out our contact form below and tell us a little more about your project. We’ll produce a report that shows you the financial and environmental benefits of going solar based on your roof and electrical usage so you can decide if solar is right for you.
You Make The Difference. We’re here to help.
