Solar power in Washington State is a little like climbing Mount Rainier. The view may start murky, the climb may be steep, but once you’re up on the summit the views are astounding. Your effort is rewarded tenfold. Same with solar.
Not that going solar is as tough as hiking a 14,000-foot volcano. It’s just that there are a few obstacles along the way.
But Washington’s sun-sourced electricity has some of the most generous incentives anywhere in the U.S., so navigating to them is well worth the effort.
The first obstacle might seem to be the weather.
Solar power in dull Washington state, stuck so far in the north country? How’s that going to work?
Well actually, rather well. Being so far north works in our favor in a couple of ways.
Summer days are long here (as much as 17 hours in June) and nowhere near as cloudy and soggy as in fall. Plus, our summer days are relatively cool. Cool temperatures make solar panels work more effectively in pumping out those electrons.
Even in the winter, solar panels work better than you might think. That’s because modern PV panels pick up a lot of ambient light, and can produce electricity even on cloudy days.
So it seems like we have a green light for sun power in the Evergreen State!
Let’s throw some numbers down. Then you can get a better feel for what the sun can do for you.
How much sunshine does the average Washingtonian's roof collect each year? Well, it depends on where you live.
No surprise that sunny Yakima tops the list. With around 1,900 kWh per square yard each year, it’s as sunny there as Fort Worth! A similar square yard of solar PV in Spokane doesn’t do too shabbily either, at 1,750 kWh.
And even notoriously wet and gray Seattle gets 1,200 kWh/square meter of free sunlight, each year. Time to get a solar system up there, to catch it all, we say.
But how much will it cost? And how much will it save? Let’s get the solar power calculator out and do some number crunching.
Washington Solar Power: Check your Savings, Costs, Tax Breaks, Incentives and Rebates
Return on Investment for Residential Solar Power in Washington
“Internal rate of return.” It makes the planet-saving, energy-independence revolution that is solar power sound a little dull.
But we at Solar Nation reckon it’s important to work out this number. Then you can compare an investment in solar panels to other investments, like stocks.
Calculating your return depends on three things—the amount of sunshine, the amount of panels, and the amount of money you’ll save from slashed bills.
Assuming we put 5 kW of panels (an average-sized system) in (say) Seattle, we calculate the rate of return at a respectable 5.8%. Not bad.
That bumps up the return massively. To a stunning 17%, provided you buy your solar system locally. But more on that later. Let’s start talking dollars. Big dollars.
A 5kW solar system on a Seattle roof could see you earning as much as $37,000 over 25 years, taking into account those wonderful incentive payments.
Given you can pick up a 5 kW system for between $15,000 and $20,000, you’re looking to pocket tens of thousands of dollars.
Let’s see how those numbers break down.
Buying a 5KW Solar System—a Washington case study
Costs for installing solar PV panels have come down fast in the last few years. Where once you might have been looking at $20,000 for a 5kW solar system, today can be as little as $15,000. Although, if you aim to go local with your system components, then expect higher costs.
1. Well, an average of 15 kWh of clean, green electricity, per day, for starters. 2. In your first year that adds up to 5,680 kWh of power. Power your roof has generated for you. 3. Given an average Washingtonian only uses 12,000 kWh, that almost halves your electricity bill!
1. Well, an average of 15 kWh of clean, green electricity, per day, for starters.
2. In your first year that adds up to 5,680 kWh of power. Power your roof has generated for you.
3. Given an average Washingtonian only uses 12,000 kWh, that almost halves your electricity bill!
Good news for your bank balance, as well as for Washington’s air quality.
But what about that $15,000 outlay? Let’s see if we can’t cut that down a little.
1. Start with your $15,000 sticker price, before tax.
2. Now, Washington has 9% sale tax. But you’ll dodge that, to the tune of $1,350, because of the state’s solar sale tax exemption.
3 Here’s the real biggie—the federal Income Tax Credit (ITC). Provided you pay tax, you’ll be able to slash 30% of your first year’s outlay, pruning it to a $10k net cost.
4. Don’t forget you’ll be saving on your bill from day one, so another $650 comes off.
5. That means you’ll have shelled out a net $9,350 in the first 12 months.
1. Over our 25-year timeframe, if your utility bill never rose once, you’d save $16,200.
2. But rates do rise. By an average of 3% or more a year.
3. Now your savings pile will creep up—to just over $22,000.
4. All done? Not by a long chalk. If you qualify for the best performance incentives, by going local, you can earn a whopping 54 cents premium per kWh produced.
5. That’s another $15,000, over just 5 years, bringing your total savings to over $37k.
Washington Solar Power Incentives, Tax Breaks and Rebates
Time to look into all the options out there to help make sure your solar project to earn the maximum buck—all the while helping the planet buck global warming.
Let’s start with the RPS.
An RPS is a target for renewables set by the state to push the utilities into action. Washington actually led the field here, setting its RPS in 2006—only the second state to do so at the time. The target is for 15% of all electricity to come from renewable sources by 2020.
What is an RPS really?
You’ll often hear the letters ‘RPS’ thrown about when talking about solar energy. But what exactly is a ‘Renewable Portfolio Standard’?
Basically, it’s a state law setting binding targets for clean energy. RPS have been really useful in getting the utilities to take renewable energy generation seriously.
When a state sets an RPS target, they’re saying that utilities must generate a certain amount of their electricity from renewable sources, by a certain date. If not, they’ll face big fines.
Which is a much-needed stick. After all, power companies need a push.
Most still make money selling us more and more energy. And they’re not best pleased that we’re starting to generate our own power, taking revenue away from them.
The threat of fines makes the utilities much keener to offer their customers incentives, rebates, and grants for their solar systems. Everyone wins.
They avoid the fine, you get the low-cost solar power, and we all breathe cleaner air. Oh, and the planet might not frazzle.
Washington tax credit
There’s no state income tax credit (ITC) in Washington. Hardly surprising, as there’s no state income tax!
But that doesn’t stop you from claiming your 30% federal ITC if you’re a fed income taxpayer. That cuts the cost of your solar system in a big way.
Are there any Rebates for Solar Power in Washington?
For some, yes. The state isn’t going to throw you a few dimes to thank you for going lean, green, and sun-powered, though.
They’ve focused all their firepower on those big fat performance incentives (more on that later).
But you might qualify for a few hundred dollars of rebate if you’re in the area covered by Snohomish County PUD. They’ll give you $300 per kW of capacity of your system, once it’s up-and-running.
Washington Tax Exemptions
It’s a mixed bag when it comes to tax exemptions in Washington. On the one hand, you can forget the state’s 9% sales tax when paying for your system.
The cost of the panels, inverters, roofing contractors, and designers is all tax-free.
On the other hand, Washington sneaks in a stealth tax, thanks to solar’s property-price-boosting powers. The moment you flick the switch on for your system, all of its cash-generating potential gets added the value of your home. Solar does wonders for its salability.
The problem is that there’s no law on the state’s books to prevent that extra value being counted for property taxes. A real shame.
You could say it’s daylight robbery… (pun intended!).
Washington Electricity Rates
Electricity costs in Washington are cheap. Too cheap in fact, when it comes to solar power savings.
The lower the electric bill, the less you save from generating you own power. You can thank the state’s big investment in hydropower for that.
Not that we resent the relatively clean, low-cost electricity generated by the big power companies. We just think that the even cleaner, low-cost electricity you generate on your roof is a lot cooler.
But those low rates won’t stay low. Since 2005 we’ve seen a rise of almost 40%. That’s over 4% per year, and shows why you need to switch to solar now, to avoid those accelerating rates.
The sooner you get those panels on your roof, the more rate hikes you can dodge. And the more money you’ll save.
Is there Net Metering in Washington?
Yes, this little trick for making your home a mini-power plant has been around in Washington for a while. With Net Metering, you actually get 2 meters for your household.
One to track the electricity you buy from the utility. And another to track the electricity you sell back to the same power company.
That second meter spins backwards when the amount of electricity you generate exceeds the electric you use. That can happen a lot in Washington’s long summer days.
And yes, you heard right. A meter that spins backwards and earns you money.
In Washington, you get to keep those credits for the whole year. But they’re reset in April, meaning you can’t oversize your system to maximize the credits. Shame, really.
What's net metering anyways?
Net Metering is a vital part of making solar power work for homeowners. It means even when the power you generate doesn’t match the power you use, little is wasted.
That’s important because the electricity your system produces varies as the sun moves round the sky. When the sun is highest in summer you may produce more electricity than you use.
Under Net Metering, that extra power gets sent to the grid. So you actually become the power station for the utility.
Your utility has to pay you for the energy you’re supplying to them under Net Metering. In Washington this is at the retail electricity rate, the rate you normally pay them. Not bad at all.
Welcome to the wonderful world of energy independence!
Are there 0 down payment financing Options in Washington?
Yes, the whole range of pay-nothing-now options are available in Washington—from loans to leases to power purchase agreements (PPAs).
These are increasingly popular, and offer a great way to leverage your solar investment—or simply to power your home with green energy without spending big wedges of greenback.
Each has advantages and disadvantages, though. Let’s take a look at which might best suit you.
Solar Lease in Washington?
Leasing works wonders for those who can’t tap the equity in their home for a loan. Or those who can’t access the upfront cash for a purchase. A lease lets you put $0 down to get those panels on your roof. Then you watch the savings roll in.
The savings won’t be as impressive as using your own money. But you will be making excellent returns, as you won’t have stumped up any cash yourself.
But it does mean that you need to know that those panels will keep pumping out the juice for their whole lifespan. A performance-guarantee clause on your lease makes sure of that.
Solar Power Loan?
If you’d prefer to own your solar panels, for only a small (or even no) outlay, then a solar loan makes sense.
This way you’ll get better rates of return, especially if you can tap a home-equity line of credit. You’ll soon be solar powered, and you won’t have to raid your cash savings.
If you’re a taxpayer, you’ll also benefit from the federal ITC.
It’s worth noting that with a solar loan you will be on the line for any maintenance or cleaning your panels will need.
And another thing to watch out for in Washington. Electricity rates here are low, so your bill savings will be lower too.
Unless you can get on a performance incentives program, you’ll only end up with a small profit overall, because of your loan’s interest payments.
You will, however, be saving the planet for no out-of-pocket cost. Pretty cool, we think.
PPA Option on Washington?
This is the other approach for going solar with no (or little) upfront cost. PPAs are similar to leases. But rather than paying a fee to lease the panels from a third-party, you’ll only pay for the power that they produce.
No hassles of ownership. No worries about performance. And no big down-payments.
You will find the savings are quite a lot less than with purchases or loans. But remember that you’ve put no money down to earn those savings.
So even if you won’t be saving tens of thousands, like you would for a purchase, the rates of return are nothing to sniff at.
What is a PPA?
A Power Purchase Agreement, or PPA, is an agreement between you and your solar panel provider. You provide them with the roof for the panels. They provide you with power at a guaranteed price.
Like a lease, you’ll benefit from solar power without worrying about details like planning, installation, equipment upgrades, maintenance, and cleaning.
One thing to check out is the PPA’s escalator rate. This is where the PPA price rises gradually throughout your PPA contract, according to an agreed schedule.
These escalators are a reasonable way for the solar panel company to take gradual performance and maintenance issues into account over its lifetime.
Just make sure your PPA escalator isn’t too steep. It should be much less than expected utility rate rises.
Is there Feed In Tariff in Washington?
This is (at last!) where things get really interesting.
While there’s no formal Feed In Tariff in Washington, the state has adopted a generous scheme that amounts to much the same thing. Just with a much longer name.
The Renewable Energy Cost Recovery Incentive Payment program was established in 2005 to encourage renewables like solar. It involves a base level of payment ($0.15 per kilowatt-hour) that’s factored up or down according to the source of technology being used.
Jaw-dropping because these numbers are many times the current electric residential rate of $0.09 per kWh. And they’re paid out for every kWh of power you produce, whether you use it or export it to the grid.
That can add up to impressive numbers. If your system had been installed in 2005 you could have racked up $40,000 by 2020.
Even today you can receive a $15,000 boost to your income for the next 5 years that the program runs.
There are a couple of flies in the ointment, though.
First, the program has become very popular. However, the funds available are capped for each utility.
That means that these performance incentives may be difficult to get in some areas.
And secondly, to get the maximum incentive you need to buy local. Washington state won’t be the cheapest option, so your system will be more expensive than if you could buy freely. The benefits do seem to outweigh the extra costs though.
We’ll send you details on the Washington solar firms who know their stuff. You choose who you want to work with – they do the rest
Leasing vs Purchasing: What's best for Washington Homeowners?
As with many things, the choice between leasing and purchasing depends on how you see risk and reward. And on how much skin you want in the solar game.
Leasing works well for the risk adverse. For those who want to help clean our energy, and cut pollution, but without taking on the hassles (and big initial outlay) of purchase.
Purchasing is good for those with the money to invest. For those who want to make the most of the benefits and incentives out there for switching on to the sun.
But remember that the biggest winners are clean air and a healthy planet.
What is the Solar Panel Installation Process in Washington?
The solar installation process starts with home visit by an energy assessment team. They’ll talk to you about your bills, how best to site your system, and the financial options available.
Once they’ve got the measure of your place, and have found out exactly what your needs are, they’ll be provide you with a fully detailed PV quote. They’ll advise how to best maximize the incentives available, using locally-sourced components.
They’ll also give you detailed breakdown of the savings you can expect to make.
Once you’ve agreed and signed your agreement, the solar installation team can schedule a date for transforming your house from energy sink into a solar-powered energy producer! The installation process usually only takes three to four days.
1. Fill in our simple solar form 2. Receive quotes from the best local solar suppliers 3. Choose the best money-saving solar option for you 4. Once your system is installed, just sit back, relax—and watch the savings roll in
1. Fill in our simple solar form
2. Receive quotes from the best local solar suppliers
3. Choose the best money-saving solar option for you
4. Once your system is installed, just sit back, relax—and watch the savings roll in
Solar power in Washington can seem like a difficult nut to crack. The sun resource is good, but not stellar. The utility rates are low. And the electricity produced here is pretty clean already (thanks to all those dams).
But the state government has given us a great big hammer to crack that nut. With the ample performance incentives available for sun-powered electricity, Washington switches from an also-ran in the solar league tables to jostling with the front-runners.
Sadly, it won’t last. Only 5 years of incentives are left.
So Washingtonians need to move fast if they want to go green AND earn the greenbacks. Over to you, we reckon.