2024 Solar Incentives Guide for Lakewood, WA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Lakewood.
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 Lakewood?
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 are designed to make renewable energy usage more affordable via financial incentives for individuals who install solar panels on their homes. Incentives might include things like discounts, cash back or credit on your utility bill each month. Some incentives are offered federally, while others are provided by the Washington government or by your specific utility company, county or municipality. You might qualify for any of the following types of solar incentives:
- Tax Exemptions: These might come in the form of property tax exemptions, which let you ignore the value of your solar system when paying taxes on your home. You may also qualify for an exemption on sales tax at the time of purchase.
- Net Metering: Net metering becomes relevant after your solar panels are up and running. If you have a net metering agreement in place with your Lakewood utility company, the company will subtract the value of the excess energy your solar system produces from your utility bill each month. In some locations, this credit is dollar-for-dollar, while in other places you may make back a percentage of the value.
- Rebates: Solar rebates can be provided by your local utility company, or by your state or county. These rebates are essentially partial refunds that are applied after your purchase of solar panels and before tax credits are calculated.
- Tax Credits: Tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the government. (This is different from a tax deduction.)
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Federal Solar Incentives
When people think of solar incentives, federal incentives may be the first thing that comes to mind. You might have heard of the Federal Solar Investment Tax Credit, or ITC. The ITC is a tax credit that reduces your taxes by a predetermined percentage of the money you spend on your solar system.
The ITC can be applied to solar panels installed on your primary or secondary residence in the United States. The solar panels must have been installed after January 1, 2006, on a property you own for you to claim the credit. The ITC originally paid out 30% of all installation costs (panels, labor, accessories and equipment), although this amount has fluctuated over the last few 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.
Contacting your local Lakewood solar panel installer is the best way to understand how the ITC could apply to you.
The Inflation Reduction Act, passed in August 2022, added more provisions to the ITC (as well as retitling it the Clean Energy Credit). Homeowners can now receive a credit equal to 30% of the total solar system installation costs for projects started after January 1, 2022, and completed before the end of 2032. The credit percentage will then begin to decrease on a yearly basis until the Clean Energy Credit ends in 2035. The program expansion also makes credits for energy storage systems even easier to claim, beginning in 2023.
Click here to learn more about the new Inflation Reduction Act. To fully understand how the new Clean Energy Credit will apply to you, get in touch with your local Lakewood solar installers.
State & Local Solar Incentives
Rebates, tax credits and more can be claimed at multiple levels. On top of federal solar incentives, there are often state and local ones as well. These incentives — which may be handled 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 Lakewood
Solar energy use nationwide has significantly increased in the last 15 years, in part due to the increase in availability of solar incentives. You might receive these incentives from the Washington government, the federal government or your local utility company. If you're ready to switch over to solar energy, getting in touch with your local Lakewood solar panel installation expert is a great first step.
EcoWatch's Lakewood, WA Solar Incentives FAQs
If I already have a solar system installed on my house, can I still claim incentives?
An excellent idea would be to talk to the company that installed your system – or get in touch with a local Lakewood solar installer — to better understand which incentives you might qualify for. If your system was installed after January 1, 2022, you likely qualify for the newly 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 can I save on my electric bill annually if I add solar panels to my Lakewood home?
When you add solar panels to your house in Lakewood, you can anticipate savings of around $875.87 per year, or about $17,517.44 over the next 20 years.
What are some environmental benefits of adding solar panels to my house?
You can reduce your carbon footprint by 50 pounds of CO2 a year when you install solar panels. This adds up to roughly 1,000 pounds over 20 years. In addition, solar power is a renewable energy source, which means that making the switch lessens the drain on our planet's resources.
Can I receive incentives both towards the initial cost of solar panels, and later as reimbursement?
Yes, you can claim both rebates and tax credits towards the cost of 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 confirm that you are claiming incentives correctly and that you're getting the most money you can.
Can I use a combination of solar and another type 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 go over your plan with your local Lakewood solar installer. They can help you with the plan for your project and also help you understand 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.