Washington solar 101: must read before you buy solar panels

The main solar incentive that works across all United States is the Solar Investment Tax Credit (ITC) program. By applying to this program, all Americans can deduct 26% of the total cost of their installation from the income tax. The PV system cost doesn’t amount to only how much you’ve spent on your solar panels, but includes the shipping and installation as well. To claim the ITC, complete all the necessary forms and submit them when filing your taxes. It makes sense to hurry up: in 2023 the Tax credit decreases to 22% and after that it’s 10% for commercial systems only

Net Metering is the main way in which a solar system pays for itself in the US. The idea is always the same: you sell your excess solar energy into the commercial grid, gain credits and use them to cover your next electric bill.

All municipal utilities and electric cooperatives in Washington have to offer Net Metering to customers with solar systems that are up to 100 kW in size. Net excess generation (NEG) is credited to your electric bills at the utility retail rate. Any unused NEG is surrendered to the utility every April 30 with no compensation. The only exception is Grays Harbor PUD which reimburses NEG of its customers at 50% of the utility's retail rate by the end of the year. Renewable energy credits that you get remain yours. Consult with your utility company about the rates and conditions of Net Metering.

For generating clean electricity any person can get Solar Renewable Energy Certificates (SRECs). Unlike with Net Metering, you don’t need to sell any electricity to get credits – the certificates are simply given to you. One SREC is granted for 1 MW of power. A 5kW system can generate over 7 MW over the year, so in theory it’s possible to get 5-7 SRECs in 12 months if you send all your energy into the grid.

You can choose to store or sell these certificates using the WREGIS platform. In Washington, Renewable Energy Certificates are bankable for 12 months and can be used by utilities for prior year's compliance. The value of SRECs is always changing, which makes them similar to stock market assets. In Washington the cost of a SREC can be quite high: around $350. Overall, selling SRECs could bring you from $350 to $2,000 annually for a 5kW system. To participate, register your system at the WREGIS website.

Clark Public Utilities issues loans for solar projects for up to 7 years. The maximum size of the loan is $30,000 with an interest rate of 3.5%. Loans under $10,000 must be repaid in 5 years or less with a minimum $25 monthly payment. The processing fee is $230 for loans under $5,000 and $450 otherwise. Find the list of conditions and apply here.

This Washington solar incentive benefits installers and buyers of solar systems. Solar panels and equipment get full sales and use tax exemption if:

• System is bigger than 1 kW, but smaller than 100 kW
• Equipment is purchased after Jul 1, 2019, but before December 31, 2029

To report the exemption, the buyer must provide their seller and installer with a Retail Sales Tax Exemption Certificate. They have to keep it in their records for 5 years. If the tax was charged, it is possible to apply for a refund later. For more information visit Washington Department of revenue website and read the guide.

In 2006, a Renewable Energy System Incentive Program started in Washington. The idea was simple: utilities give incentives to their customers with solar installations and earn a tax credit equal to the cost of those payments. The size of an incentive ranges from $0.02/kWh to $0.12/kWh with a $5,000 per year cap for residential clients and $25,000 per year for commercial solar systems in Washington. The program hasn’t ended officially, but since then some utilities have withdrawn from the program and the last time the program website was updated was in 2019. Nevertheless, it makes sense to inquire of your utility if this incentive is still available.

To make sure that your panels get enough sunlight and won't be overshadowed by, say, trees on your neighbors land, you can create a solar easement. All the conditions of an easement you have to negotiate with your neighbors yourself. The easement should be written down and recorded in the county’s register of deeds. In Washington, solar law also restricts homeowners associations from prohibiting the installation of panels. They can, however, release guidelines related to aesthetic appearance and visibility of panels.

Generally, in the US you would need a solar permit from your local authorities to install a solar system. Requirements, however, vary in different cities and counties. For example, in Seattle you always need an electric permit and a building permit in some cases. Seattle officials have put out a guide on solar installation that gives an idea of what you can expect. Usually your installer knows all the details about permits in your area and handles most of the process. After the permit is obtained, it is legal to install solar panels on your house in Washington. Be aware that city or county officials can impose additional fees on you for inspections and documents.