2022 Oregon Solar Tax Credits, Rebates & Other Incentives
Here’s a quick look at the solar incentives in Oregon:
- Federal Solar Tax Credit (ITC)
- Oregon Solar + Storage Rebate Program
- Net Metering
- Solar Electric Incentive Program
- Additional City & Utility Rebates
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Solar power is more affordable in Oregon now than ever before, and more homeowners have been adopting this renewable energy source. Thankfully, there are a number of incentives offered to Oregon homeowners from the state and federal governments to reduce the upfront cost of going solar and make solar more accessible.
However, the average cost of solar panels in Oregon is still around $2.60 per watt, making the total for a standard 9.5-kilowatt system approximately $24,700. This is prohibitively expensive for many homeowners, and some Oregon residents will undoubtedly find it difficult to justify the cost of going solar. Below, we’ll discuss all of the incentives available in Oregon and how each can save you money in the long run.
Disclaimer: This article is for informational purposes only. It should not be relied on for and is not intended to provide accounting, legal or tax advice.
Current Solar Rebates, Tax Credits and Incentive Programs in Oregon
The following table provides a list of the major solar incentives in Oregon, along with a brief description of each. We’ll also explain these incentives in greater detail further below.
|Oregon Solar Incentive||Description|
|Federal Solar Tax Credit (ITC)||The federal solar tax credit is available to all Oregon homeowners and gets credited to your federal income tax liability for the year your system is installed and turned on. The credit is for 26% of your total cost to go solar.1 In Oregon, where most homeowners pay around $24,700, the typical credit is $6,422.|
|Oregon Solar + Storage Rebate Program||The Oregon Department of Energy (ODOE) provides a rebate to customers who install solar panels and a solar battery under the Solar + Storage Rebate Program. The solar panel installation company you choose can get this rebate and pass the savings on to you. You could get a rebate of up to 40% of your total system cost or $7,500, whichever is lower.2 Most homeowners in Oregon will be eligible for the full $7,500, given the total cost of the typical system required.|
|Solar Electric Incentive Program||Customers of Portland General Electric (PGE) and Pacific Power are eligible for a local rebate if they use cash or a solar loan to acquire their solar system. The rebate is for up to $1,200 or $900 for PGE and Pacific Power customers, respectively.3|
|Solar Within Reach||Oregon provides the Solar Within Reach program to make clean energy equipment more accessible to low-income residents. This program provides rebates to PGE and Pacific Power customers in the amounts of $1.40 per watt (up to $8,400) and $0.70 per watt (up to $4,200) for qualifying solar customers, respectively.4|
|Renewable Energy Systems Exemption||This is a property tax exemption provided by the State of Oregon. In most cases, home improvements cause your property value and your property taxes to go up. Solar panels do increase your property value, but this exemption prevents your taxes from going up as a result of going solar.5 Over the lifespan of your panels, this could save you thousands of dollars, especially if you live in a high-tax area like Salem.|
|Net Metering||Net metering programs help customers offset or eliminate their electric bills with the power their panels overproduce during peak sunlight hours.6 We’ll discuss the specifics of Oregon’s net metering policy below.|
Oregon Solar Rebate
Some states incentivize solar power conversions by providing a state solar tax credit in addition to the federal tax credit. Rather than using a tax credit, Oregon makes going solar more appealing by providing rebates for immediate savings.
First, the Oregon Solar + Storage Program was established in 2021 and provides a massive rebate for solar customers who add storage to their solar energy system. To qualify, you must buy or finance your solar panels, and there are different tiers or qualifications based on income level. Most homeowners in Oregon will qualify for a 40% rebate, which is capped at $7,500 — up to $5,000 for the photovoltaic (PV) equipment (panels) and up to $2,500 for the solar battery. Low-income residents can qualify for a rebate of up to 60% of the total system cost.
Oregon’s Solar + Storage program is one of the best rebate programs in the nation and serves as a model of an effective cash incentive that makes solar more appealing and more accessible.
Finally, some electric utility companies offer rebates for energy-efficiency upgrades, which some solar companies will set up during your solar installation. You should check with your utility provider for information on these rebates.
Other Oregon Solar Incentives
Oregon is a solar-friendly state, so it’s not surprising that it provides some additional solar incentives. Below are some other rebates and programs for which you might qualify:
- Solar Electric Incentive Program: The Solar Electric Incentive Program is provided by the Energy Trust of Oregon to customers of Portland General Electric (PGE) and Pacific Power, two of the largest electricity providers in the state. PGE customers can get up to a $1,200 rebate for their PV systems, and Pacific Power customers can qualify for up to $900.
- Solar Within Reach: The Solar Within Reach program in Oregon is designed to make converting to clean energy more accessible to low-income homeowners. It’s provided by the Energy Trust of Oregon, and it reduces the upfront cost of a solar power system based on your electric company. Customers of PGE can get up to $1.40 off per watt up to a maximum of $8,400. Customers of Pacific Power can qualify for a reduction of $0.70 per watt up to a maximum of $4,200.
Oregon Solar Sales & Property Tax Exemption
Many states provide sales and property tax exemptions for solar equipment to make renewable energy more appealing overall, and Oregon residents can technically benefit from both.
Oregon doesn’t specifically exempt sales tax on solar equipment, but there is no state sales tax. As such, solar customers will not pay sales tax on their solar installations.
More importantly, Oregon provides residents with a property tax exemption. Typically, home improvements that bump up the value of your home will also cause a spike in your property taxes. For some homeowners, that can mean several thousands of dollars in additional taxes paid over the lifespan of their solar equipment. Although solar panels boost your home value, the tax exemption means you won’t pay any additional property taxes just because you install solar panels.
Net Metering in Oregon
Net metering is one of the biggest benefits afforded to solar customers because it helps reduce or even eliminate electric bills. While solar panels can be highly efficient, none will provide enough power to fulfill your energy needs all the time — especially at night or on cloudy days.
Some homeowners couple their panels with solar batteries to solve this issue, but net metering is another solution that lets you offset your electric bills by overproducing during peak sunlight hours and “banking” the excess energy credits with your electric company. Your bill will reflect what you pull from the grid via interconnection minus the cost of the energy you produce.
Oregon has a great net metering policy that ensures the excess energy you produce is credited at the full retail rate. That means every kilowatt-hour (kWh) you overproduce will offset a kilowatt-hour you pull from the grid. This policy covers all investor-owned utilities (IOU) except for Idaho Power, which services Eastern Oregon. Idaho Power has its own net metering policy that is currently undergoing changes.
In addition to all of the great benefits above, the City of Eugene has its own local solar incentive. The Eugene Water & Electric Board (EWEB) offers an incentive program that provides qualifying customers with a rebate in the amount of $0.40 per watt or $2,000, whichever is less. In Oregon, where most customers need a 9.5-kilowatt system to offset electric usage, it’s common to qualify for the full $2,000 rebate.
Federal Solar Tax Credit
Finally, Oregonians who convert to solar power will have open eligibility for the federal solar investment tax credit (ITC), which is an incentive provided by the federal government. This credit is for 26% of your total solar panel system cost and gets applied to your federal income taxes owed for the year the system is installed and turned on. Oregon homeowners, who typically pay $24,700 for their solar arrays, will enjoy an average credit of $6,422.
The federal tax credit rate will be reduced in 2023 to 22%, meaning residential customers who install solar in 2023 will only get an average of $5,434. As of right now, the credit for commercial customers in 2024 will still be 10%, but the credit will no longer be available for residential solar customers. As such, you should plan to complete your home solar project as quickly as possible for the maximum credit.
FAQ: Oregon Solar Incentives
Many Oregon homeowners ask us questions about the incentives available throughout the state and how they apply to their solar system installations. Below are some of the questions we see most frequently, along with our responses.
Some states have a statewide solar tax credit on top of the federal tax credit available, but Oregon does not. Instead, Oregon incentivizes residents to convert to solar by providing rebates through its Solar + Storage incentive program.
This incentive provides a rebate of up to 40% of your total project cost or $7,500, whichever is lower. This rebate is broken down by panels and solar storage options, with up to $5,000 for your PV panels and up to $2,500 for your solar battery. Low-income solar customers can get even more back, as they can qualify for up to a massive 60% of the total cost of going solar. This rebate only applies to solar systems that are purchased outright or financed and isn’t available for solar leases or power purchase agreements (PPAs).
Yes, there are several solar incentives available in Oregon in 2022. Two of the most substantial incentives are the federal tax credit (ITC) and the Oregon Solar + Storage Rebate Program. The ITC provides a tax credit in the amount of 26% of your total solar system cost — an average of $6,422 in Oregon. This will drop to 22% in 2023 and will no longer be available for home systems in 2024. The Solar + Storage Rebate Program delivers up to $7,500 in rebates for your PV panels and solar batteries. More details are provided above.
Additionally, customers of PGE and Pacific Power can qualify for up to $1,200 and $900 rebates, respectively, and solar customers in the City of Eugene can get a $0.40/watt rebate on all solar equipment, up to $2,000. Oregon also provides a property tax exemption to prevent solar from causing your property taxes to increase.
The most significant rebate in Oregon comes from the state government’s Solar + Storage Rebate Program. Solar customers can get up to a $5,000 rebate on panels and up to $2,500 back for installing solar batteries.
There are additional rebates offered by PGE, Pacific Power and the City of Eugene, all of which are discussed in detail above.
Thankfully, no! Other home improvements that increase your home value will cause your property taxes to go up, but the property tax exemption in Oregon prevents this from happening when your property value increases due to solar installation. Over the course of your system’s lifespan, this could save thousands of dollars, making it a substantial incentive.