Renewable Energy Cost Recovery Incentive Payment

Program Renewable Energy Cost Recovery Incentive Payment
Category Financial Incentive
Implementing sector State
Last Update
State Washington
Website http://dor.wa.gov/content/FindTaxesAndRates/TaxIncentives/IncentivePrograms.asp…
Start Date
Technologies Solar Thermal Electric, Solar Photovoltaics
Sectors Residential

Note: Some utilities have reached their cap for incentive allocations under the Renewable Energy Cost Recovery Incentive Payment program. Some of these utilities have reduced per-customer incentive amounts in response, while others have closed the program to new applicants. Interested customers should check with their electric utility on the availability and level of incentive payments.
 

In May 2005, Washington enacted Senate Bill 5101, establishing production incentives for individuals, businesses, and local governments that generate electricity from solar power, wind power or anaerobic digesters. The incentive amount paid to the producer starts at a base rate of $0.15 per kilowatt-hour (kWh) and is adjusted by multiplying the incentive by the following factors:

  • For electricity produced using solar modules manufactured in Washington state: 2.4
  • For electricity produced using a solar or wind generator equipped with an inverter manufactured in Washington state: 1.2
  • For electricity produced using both solar modules and an inverter manufactured in Washington state: 3.6
  • For electricity produced using an anaerobic digester, by other solar equipment, or using a wind generator equipped with blades manufactured in Washington state: 1.0
  • For all other electricity produced by wind: 0.8

These multipliers result in production incentives ranging from $0.12 to $0.54/kWh, capped at $5,000 per year. Ownership of the renewable-energy credits (RECs) associated with generation remains with the customer-generator and does not transfer to the state or utility.

This incentive applies to both single-owned systems and community solar projects. To be eligible for a single-owned system, the person that owns the system must also own the property it is installed on and be a customer of the utility that serves the site of the property. The base rate is $0.15 kWh, adjusted by the multipliers for technology types and in-state manufactured components.

Community solar projects are able to receive the production incentive, and are defined as solar energy systems up to 75 kilowatts (kW) that are owned by local entities and placed on local government property, or owned by utilities if the utility has annual sales no greater than 1,000 megawatt-hours (MWh) and if the project is funded voluntarily by utility ratepayers. Projects on local government property that are owned by limited liability companies, cooperatives, or mutual corporations or associations are also able to receive the incentive. The company itself is not eligible, but members may take advantage of the incentive. The base rate for community solar projects is $0.30/kWh and the multipliers are the same as those used for other renewable energy technologies. Each participant in a community solar project, or each owner of a project, can apply to receive this incentive and may receive up to $5,000 per year.

The state's utilities will pay the incentives and earn a tax credit equal to the cost of those payments. The credit cannot exceed the greater of $100,000 or 0.5% of a utility’s taxable power sales. Incentive payments to community solar projects cannot exceed 25% of the total allowable credit. The incentive amount may be uniformly reduced if requests for the incentive exceed the available funds.

The incentives apply to power generated as of July 1, 2005, and remain in effect through June 30, 2020. A utility may not claim any tax credits for incentive payments after June 30, 2021.

Click here for the Department of Revenue (DOR) renewable energy system certification form and here for the community solar project certification form. Click here for the DOR annual incentive payment application and here for the DOR annual incentive payment application for community solar projects.

Add new comment