2024 Solar Incentives Guide for Washington, MI - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Washington.
You'll learn about:
- Local & State Solar Incentives
- Federal Tax Credits (Updated for 2024 and beyond)
- Ways to optimize your solar investment
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What Solar Tax Credits, Incentives, and Rebates are Available in Washington?
Michigan Saves - Home Energy Loan Program
Federal Residential Renewable Energy Tax Credit
Source: https://www.dsireusa.org/
Solar incentives are designed to make renewable energy usage more affordable via financial incentives for those who install solar panels on their homes. These incentives may include cash back, upfront discounts or monthly credits towards your utility bill. Some incentives are handled by the federal government, some by the Michigan government and some by your utility company, county or municipality. Types of solar incentives might include:
- Net Metering: Net metering becomes relevant once your solar system is up and running. If you have in place a net metering agreement with your Washington utility company, the company will subtract the value of the excess energy produced by your solar system from your monthly utility bill. In some areas, this is a dollar-for-dollar credit, while in other areas you may receive a refund equivalent to a percentage of the value.
- Rebates: Solar rebates might be provided by your local utility company, or by your state or county. These rebates are essentially cash back that is applied after you purchase a solar system and before tax credits are calculated.
- Tax Credits: Unlike tax deductions, tax credits reduce, dollar-for-dollar, the amount of income tax that you owe the government.
- Tax Exemptions: Your solar panels could qualify for both sales tax and property tax exemptions. Sales tax exemptions come into effect at the time of purchase. Property tax exemptions let you exclude the value that solar panels add when you are calculating property taxes on your house.
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Federal Solar Incentives
When you think about solar incentives, you likely think of federal incentives first. The solar incentive that you're most likely to have heard of is the Federal Solar Investment Tax Credit (ITC), which gives you a credit on your taxes equal to a specified percentage of the cost of your solar system.
The ITC applies to the total cost of solar system installation, including the panels themselves as well as accessories, labor and equipment. You can claim this credit for panels installed after January 1, 2006, on a primary or secondary residence that you own, as long as it is located in the United States. The tax credit ranges from 26-30% of total costs depending on when your project was completed. There is no maximum amount you can claim.
To know exactly how much money the ITC could save you, contact your local Washington solar panel installer.
The ITC was renewed and increased in scope after the passage of the Inflation Reduction Act in August 2022. It's also now called the Clean Energy Credit. Under the new program, solar installation projects that are completed between 2022 and 2032, might qualify for a 30% tax credit. This percentage will then see a slight annual decrease until the current Clean Energy Credit expires in 2035. Beginning in 2023, it will also be easier to obtain credits for energy storage systems under the new laws.
Click here to learn more about the new Inflation Reduction Act. To best understand how the new Clean Energy Credit applies to you, talk to your local Washington solar installation company.
State & Local Solar Incentives
Federal solar incentives are not your only option; tax credits, rebates and more may be offered at the local or state level. Certain incentives are offered for only a limited time, while others are ongoing. Local solar incentives could come from the Michigan government, or from your specific county or municipality.
Next Steps for Installing Solar in Washington
There are a number of different solar incentives: those offered by local utility companies, those given by the Michigan government and those given by the federal government, to name a few. The use of solar energy has grown tremendously in the last 15 years, partially due to these incentives. Call your local solar panel installation expert today to discover more about the various programs and to save the most money possible on a solar system for your Washington home.
EcoWatch's Washington, MI Solar Incentives FAQs
If I installed solar panels on my house a few years ago, can I still claim incentives?
Your best bet is to talk to a representative from the company that installed your solar panels – or speak to a local Washington solar installer — to clarify which incentives you may qualify for. If your solar panels were installed after January 1, 2022, you likely qualify for the recently increased 30% tax credit under the Inflation Reduction Act. Solar panels installed between 2006 and 2021 may qualify for a tax credit of 26-30%.
How much will a solar system save me on my electric bill in Washington annually?
On average, Washington homeowners who install solar panels save about $826.76 per year, or around $15,708.42 over 20 years after making the switch.
How long until the federal solar tax credit ends?
The Clean Energy Credit (previously called the federal solar tax credit, or ITC), is scheduled to end on January 1, 2035. Currently set at 30%, the credit will drop to 26% in 2033 and to 22% in 2034.
Can I use multiple types of renewable energy to power my home?
Yes, you can employ multiple types of renewable energy to power your home, such as a combination of solar and geothermal. You can also use both renewable energy sources and a non-renewable backup source of energy. You should discuss the details of your plan with your local Washington solar panel installer, to get an understanding of what will be needed and what kinds of incentives you might or might not qualify for.
What if I am planning to add a solar system to a rental property, vacation home or commercial property? Can I still qualify for incentives?
Many solar incentives are intended to apply to a property you own that is located within the United States; most secondary residences fall into this category. There may be other solar incentives available for commercial properties, depending on the specifics. We recommend talking to your local solar installer and/or tax professional to best understand what incentives apply to your specific situation.
Our goal is to reach as many people as we can with sensible solutions like solar energy. Our team of full-time local researchers collects solar price and installation data for every city in America then compiles it to create these digestible city guides. If you want to read our solar expert's opinion on the top solar companies featured here, follow this link.
Solar incentive research was conducted by Melissa Smith and Karsten Neumeister. Local data analysis was conducted by James Savino. See something we missed or could do better? Email the editor.