2024 Solar Incentives Guide for Covington, WA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Covington.
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 Covington?
Renewable Energy Cost Recovery Incentive Payment
Renewable Energy Sales and Use Tax Exemption
100% exemption for solar photovoltaic systems 10 kilowatts or less, and solar thermal systems;
75% exemption for other qualified systems
Evergreen Sustainable Development Standard for Affordable Housing
Federal Residential Renewable Energy Tax Credit
Source: https://www.dsireusa.org/
Solar incentives mitigate the cost of installing a solar panel system on your home. This category of financial incentives is designed to encourage more people to convert their home partially or fully to renewable energy. Various kinds of incentives, including cash back, discounts or credit towards your monthly utility bill, may be available to you. Certain incentives may be offered by the state of Washington, by your utility company or by county or municipality, while other incentives are federal. Some broad categories of solar incentives include:
- Net Metering: You can sign a net metering agreement with your Covington utility company that will apply to all or a percentage of the excess electricity your solar panels generate. They will then deduct this value from your utility bill each month.
- Tax Credits: These credits are dollar-for-dollar reductions (not deductions) in how much income tax you owe the federal government.
- Tax Exemptions: These could come in the form of property tax exemptions, which would allow you to exclude the value of your solar system when calculating the taxes you pay on your house. They may also include exemptions on sales tax at the time of purchase.
- Rebates: Your solar installer might help you claim a rebate, or partial refund after purchase, for your solar system. Counties or states will also sometimes offer limited-time rebates. Any rebates you receive will usually be deducted from the total price before any tax credits are calculated.
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Federal Solar Incentives
When someone says "solar incentives," you likely think of federal incentives first. The solar incentive that you're most familiar with is probably the Federal Solar Investment Tax Credit (ITC), which gives you a credit on your taxes equal to a certain percentage of the cost of your solar system.
The ITC applies to the value of solar panels installed on your primary or secondary residence in the United States. The solar system must have been installed on a property you own after January 1, 2006, for you to be eligible for the credit. Initially, the ITC applied to 30% of all costs (panels, accessories, equipment and labor), although the amount has fluctuated slightly over the years between 26-30%. The installation date of your solar system will determine what percentage you are eligible for. There is no cap on the claim amount.
To find out exactly how much the ITC could save you, speak with your local Covington solar panel installer.
The Inflation Reduction Act, passed in August 2022, added more provisions to the ITC (as well as renaming it to the Clean Energy Credit). The Clean Energy Credit bolsters the current credit, increasing it up to 30% for solar installations undertaken between January 1, 2022, and December 31, 2032. After 2032, the credit percentage will see a slight decrease annually until the program expires in 2035. Starting in 2023, it will also be easier to claim credits for energy storage systems under the new laws.
More information about the new Inflation Reduction Act can be found here. Your local Covington solar panel installer can answer your questions and explain how the new Clean Energy Credit will apply to you.
State & Local Solar Incentives
Some solar incentives are often also provided by state and local governments. As with federal incentives, these can include tax credits, rebates and more. The incentives — which might be given by your county or municipality, or by the state of Washington — could be offered for only a limited time, or on an ongoing basis.
Next Steps for Installing Solar in Covington
You can qualify for solar incentives from the Washington government and the federal government, as well as from your local utility company. This increase in availability of solar initiatives in the past 15 years has helped increase nationwide solar energy use enormously. Talking to your local Covington solar panel installer is an excellent first step towards getting all the incentives you qualify for when you switch to solar energy.
EcoWatch's Covington, WA Solar Incentives FAQs
If I already have a solar system installed on my house, can I still claim incentives?
If your solar system was installed after January 1, 2022, you may qualify for the recently increased 30% tax credit under the Inflation Reduction Act. If you had your system installed between 2006 and 2021, you might qualify for a tax credit between 26% and 30%, depending on the year it was installed. Speaking with a representative from the company that installed your system, or any local Covington solar installer, can help you learn what incentives you qualify for.
What are the top solar panel installation companies near me?
To find the right solar panel installer for you, check out our guide to Covington's top solar panel companies.
Can I claim incentives both towards the up-front cost of solar panels, and later as reimbursement?
Yes, you can claim both rebates and tax credits towards the cost of your solar panels. Depending on which incentives you are receiving, they may apply in a different order. Be sure to talk to your solar installer or a local tax professional to ensure that you are claiming the correct incentives and getting the most money possible.
Can I use solar and another type of renewable energy in combination to power my home?
Yes, you can employ multiple types of renewable energy to power your home — for example, a combination of solar and wind power. You can also use both renewable energy sources and a backup source of non-renewable energy. You should discuss your proposed plan with your local Covington solar panel installer, to make sure you know what you'll need and what incentives you might or might not qualify for.
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.