2024 Solar Incentives Guide for Gig Harbor, WA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Gig Harbor.
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 Gig Harbor?
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/
The term "solar incentives" covers a wide range of financial incentives designed to make installing and using solar panels more affordable. This is done to encourage people to switch to renewable energy. Solar incentives could include upfront discounts, cash back or credit towards your monthly utility bill. Some incentives are given by the federal government, some by the Washington government and some by your specific utility company, county or municipality. You might qualify for any of the following types of solar incentives:
- Tax Exemptions: Tax exemptions can come in two forms. First, there is sales tax exemption, applied at the time you purchase your solar panels. The second is property tax exemption. This allows you to ignore the added value of your solar system when calculating property tax for your home.
- Rebates: Rebates, or partial refunds after a purchase, are usually applied prior to any solar tax credits being calculated. Solar rebates might be provided by your local utility company, by your state or by your county.
- Net Metering: Net metering factors in once your solar panels are up and running. If you have a net metering agreement in place with your Gig Harbor utility company, they will subtract the value of the excess energy produced by your solar system from your monthly utility bill. In some locations, this credit is dollar-for-dollar, while in other places you might receive a refund equivalent to a percentage of the value.
- Tax Credits: Tax credits reduce, dollar-for-dollar, the total amount of tax you owe the government. These differ from tax deductions.
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Federal Solar Incentives
Federal incentives are the kind of incentives that you are most likely to have some knowledge of. One of the incentives that most people are probably familiar with is the Federal Solar Investment Tax Credit (ITC). This is a tax credit for a predetermined percentage of your solar system's cost.
The ITC originally covered 30% of the total cost of installing a solar system, although it has fluctuated slightly over the last few years between 26-30%. The percentage you qualify for will depend on when your solar system was installed. The total cost of installation includes the panels themselves as well as the cost of equipment, accessories and labor. There is no maximum claim amount. The ITC can be applied to solar panels installed after January 1, 2006, on your primary or secondary residence. The residence must be owned by you and in the United States.
To more fully understand how the ITC may apply to your situation, contact your local Gig Harbor solar panel installation expert and ask for more information.
In August 2022, the Inflation Reduction Act laid out new provisions for the ITC, now titled the Clean Energy Credit. The Clean Energy Credit has increased the current credit up to 30% for solar systems installed between 2022 and 2032. At this point, the percentage will be reduced slightly each year until the program expires in 2035. Starting in 2023, it will also be easier to qualify for credits for energy storage systems with the new act.
More information about the new Inflation Reduction Act can be found here. Your local Gig Harbor solar panel installer can answer any questions you have and explain how the new Clean Energy Credit applies to you.
State & Local Solar Incentives
There are often also state solar incentives in addition to those provided by the federal government. Rebates, tax credits and more might be available at a more local level. These incentives might be given out by the Washington government, or by your county or municipality. Some incentives may be available for a limited time, while others are ongoing.
Next Steps for Installing Solar in Gig Harbor
Solar incentives may be provided by the federal government, the Washington government or your local utility company. The variety of available solar incentives has contributed to a large increase in solar energy use in the last 15 years. Your local Gig Harbor solar panel installation expert can give you more information about which incentives you can apply for, and get you started on the path to switching to renewable energy today.
EcoWatch's Gig Harbor, WA Solar Incentives FAQs
If I already have solar panels, can I still claim incentives?
You should plan to talk to someone from the company that installed your system – or speak to a local Gig Harbor solar installer — to better understand which incentives you might qualify for. If your solar panels were installed after January 1, 2022, you likely qualify for the newly increased 30% tax credit under the Inflation Reduction Act. Systems installed between 2006 and 2021 may qualify for a tax credit of 26-30%.
What are some environmental benefits of adding solar panels to my house?
Solar energy is a renewable energy source — by switching where you get your energy, you help reduce the strain on our planet's resources. Solar panels can also lower the CO2 emissions from your home by 50 pounds a year, or roughly 1,000 pounds in 20 years.
How long until the federal solar tax credit ends?
The federal solar tax credit, previously called the ITC and now titled the Clean Energy Credit, is set to end January 1, 2035. The current 30% credit will end in 2032, replaced by a 26% credit in 2033 and a 22% credit in 2034.
Can I qualify for incentives both towards the up-front cost of solar panels, and later as reimbursement?
The order that incentives will be applied in may vary depending on which incentives you are claiming but generally yes, you can claim multiple types of incentives for your solar project. Speak to your solar installer or a local tax professional to make sure you are claiming all the incentives you're eligible for and applying them in the correct order.
Can I use a combination of multiple types of renewable energy to power my home?
You can power your home with multiple types of renewable energy, or a combination of renewable and non-renewable energy. Make sure you talk through your plan with your local Gig Harbor solar installation expert. They can help you plan your project and educate you on the various incentives that you may or may 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.