PREVIOUS INCENTIVE PROGRAM:
Below is a summary of the program prior to the July 1, 2017 passage of the new bill:
Passed unanimously by the Washington State Legislature in 2005, the Production Incentive was created using the following language.
"The legislature finds that the use of renewable energy resources generated from local sources such as solar and wind power benefit our state by reducing the load on the state's electric energy grid, by providing nonpolluting sources of electricity generation, and by the creation of jobs for local industries that develop and sell renewable energy products and technologies.” EXCERPT from RCW 82.16.110
By rewarding property owners for installing Made-in-WA solar systems at a higher rate, the hope was to launch clean renewable energy manufacturing in our state.
The Production Incentive is an annual payment based upon the total kilowatt hours (kWh) produced by a solar photovoltaic (PV), biogas, or wind system up to a maximum payment of $5000 annually.
Incentive rates are based upon a base rate of up to $.15/ kWh for equipment made out of state. The combination of a WA Made inverter with out of state solar panels earns up to $.18/ kWh. The combination of WA made panels with out of state inverter earns up to $.36 and when both the inverter and panels are Made in WA, the maximum incentive rate is $.54/ kWh for homes and businesses. Community Solar projects earn at a rate that is double the rate for an individual property owner (home or business owner).
The funding comes out of Public Utility Taxes that each utility would otherwise pay to the State. Utilities are charged with reading the meters and tracking the annual payments to customer generators.
Not only is there a cap of $5000 on the amount of funds any individual (or couple) can earn, there is also a cap of how much each utility can redirect out of their taxes they would be paying to the state. Each utility’s annual pool of funds available to pay the Production Incentive is capped at .5% of their taxable sales for the year.
The current Production Incentive program expires June 30, 2020 and no payments will be made for kWh generated after that date.
Contact your utility to find out if and how the caps have affected their implementation of the state incentive program. It could be different for each one. Some utilities simply closed their solar programs and are not allowing more people to join them. Others are reducing the payment to each participant and continuing to keep the doors open for new participants.
- The Washington Production Incentive is the primary reason why the growth of solar in WA has been so strong in recent years. View a PDF chart showing the number of solar systems added through December 31, 2016, courtesy of WSU Energy Office.
- The Washington State Department of Revenue (DOR) describes the parameters of the Cost Recovery Incentive program in this PDF.
- View a list of equipment approved for “Made in Washington” Renewable Energy Systems Cost Recovery Incentive payments.
- Link to the Law governing this incentive