30% Federal Tax Credit
The federal government has put forth an incredible incentive for those considering solar power. 30% of the eligible costs related to your solar project can be taken as a federal tax credit. As long as you or your business pays federal income taxes you can take advantage of this incentive.
Here’s a tax deduction example
Supposed your annual gross income is $50,000 and you have $6,000 in tax deductions (mortgage interest, health insurance premiums, etc) leaving you with $44,000 in taxable income. Furthermore, suppose that your tax rate is 25%. In this example you would pay $11,000 in taxes on $44,000 of income. Without the $6,000 in deductions, you would pay $12,500 in taxes on all $50,000 of income. The $6,000 in tax deductions saved you from paying $1,500 in actual tax dollars.
Here’s a tax credit example
Supposed you still make $50,000 annually and you still have $6,000 tax deductions, making your taxable income $44,000. Your tax rate is still 25% which means your total tax liability is $11,000. Now let’s say you had solar installed this year and the total system cost was $35,000. The federal tax credit on a $35,000 system would be $10,500 ($35,000 x 30%). Once the $10,500 solar tax credit is applied to your $11,000 tax liability, you’ll now only have $500 in tax liability.
Washington State Sales Tax Exemption
Beginning July 1, 2019, all solar systems less than 100 kW will be exempt from the Washington State sales tax. Stay tuned for more information on this exciting exemption, or click this link to learn more from the Solar WA website.
Clark County PUD Solar Loan Program (expiring june 1, 2023)
Clark County PUD (serving Vancouver, Camas, Battle Ground, Washougal and more) offers a 3.5% interest 7 year solar loan that is unique to them. You can learn more at Clark Public Utilities. We also offer excellent financing for systems in all counties.
Please note that the Clark Public Utilities residential conservation loan program will be discontinued effective June 1, 2023. All approved loans under the program must be funded by September 30, 2023.
Net Metering
Not only will you be selling the electricity your solar panels generate but you’ll also avoid having to buy that electricity from your power company. Net metering is a billing mechanism that credits solar energy system owners for the electricity they add to the grid. For example, your home or business may generate more electricity than is used during daylight hours. With net metering, the electricity meter will run backwards to provide a credit against what electricity is consumed at night or other periods where the electricity use exceeds the solar system’s output. Customers are only billed for their “net” energy consumption.
Just as the electricity coming from your power company goes to your electrical panel (breaker box) for you to use, the electricity from your solar system will also go to your electrical panel. You’ll use the solar electricity first, then you’ll use your power company for any additional electricity needs you may have.
Let’s say for example that your home typically uses 20,000 kWh of electricity each year, without solar. Now suppose you have a solar system installed that generates 9,000 kWh of electricity each year. Instead of having to buy all 20,000 kWh of electricity from your power company each year, you’ll only have to buy 11,000 because your solar panels will provide the rest.
Understanding Net Metering
Solar Array
Solar array converts energy from sunlight into electricity.
Inverter
The inverter converts the electricity produced by the solar array from direct current (DC) to alternating current (AC) for use in your home, school, or business and measures the energy produced by the solar array.
Energy
The energy is used in your home, school, or business.
Bidirectional Meter
The Bidirectional Meter indicates energy usage and excess energy produced.
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