2024 Solar Incentives Guide for Mercer Island, WA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Mercer Island.
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 Mercer Island?
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 help mitigate the cost of installing solar panels on your home. Financial incentives like these are intended to encourage more Americans to switch their home over to renewable energy. You may be eligible for several types of incentives, including discounts, cash back or monthly utility bill credits, depending on your situation. Certain incentives come from your specific utility company, county or municipality, some from the Washington government and others from the federal government. Categories of solar incentives include:
- Tax Credits: Tax credits are dollar-for-dollar reductions that lower the amount of income tax you owe the federal government. (This is different from a tax deduction.)
- Rebates: A rebate is a partial refund after the purchase of your solar system. Rebates might be offered by your local utility company, your state or your county. The rebates are usually applied before tax credits are calculated.
- Net Metering: You can sign a net metering agreement with your Mercer Island utility company, that may apply to all or a percentage of the excess electricity that is generated by your solar panels. Your utility company will then subtract this value from your utility bill each month.
- Tax Exemptions: These may come in the form of property tax exemptions, which would allow you to ignore the value added by your solar panels when paying taxes on your house. You may also qualify for an exemption on sales tax at the time of purchase.
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Federal Solar Incentives
When thinking about solar incentives, federal incentives might be the first thing that comes to mind. An incentive that most people are likely to be familiar with is the Federal Solar Investment Tax Credit (ITC). This incentive is a tax credit for a specific percentage of the cost of your solar system.
The ITC can be applied to a solar system installed on your primary or secondary residence in the United States. The solar panels have to have been installed after January 1, 2006, on a property owned by you for you to be eligible for the credit. The ITC originally paid out 30% of all system costs (panels, labor, accessories and equipment), although this amount has fluctuated over the last few years between 26-30%. The amount you qualify for will depend on when your solar system was installed. There is no cap on the claim amount.
Wondering how the ITC applies to your specific situation? Contact your local Mercer Island solar panel installation expert to get more information.
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. The new Clean Energy Credit now runs until 2035. Homeowners are now eligible for a 30% credit for solar systems that began installation after January 1, 2022, and are completed by the end of 2032. This credit will then be decreased by a few percentage points every year until the date of expiration. Starting in 2023, the expansion to the program will also make it easier to get credit for energy storage systems.
More information about the new Inflation Reduction Act can be found here. Your local Mercer Island solar panel company can answer your questions and explain how the new Clean Energy Credit may apply to you.
State & Local Solar Incentives
Some solar incentives are often also offered at the local or state level. Similar to federal incentives, these might include rebates, tax credits and more. These incentives — which might be provided by the state of Washington, or by your county or municipality — could be offered on an ongoing basis, or for only a limited time.
Next Steps for Installing Solar in Mercer Island
Solar incentives may come from your local utility company, the Washington government or the federal government. The growing number of incentives available has contributed to a large increase in solar energy use in the last 15 years. Talking to your local Mercer Island solar panel installer is the best first step towards getting the most money possible when you switch to solar energy.
EcoWatch's Mercer Island, WA Solar Incentives FAQs
My home already has solar panels. Do I qualify for any incentives?
Your best bet is to talk to someone from the company that installed your system – or speak to a local Mercer Island solar installer — to learn about 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 systems installed between 2006 and 2021 may qualify for a tax credit of 26-30%.
How much will solar panels save me annually on my electric bill in Mercer Island?
On average, Mercer Island homeowners who install solar panels save around $862.14 per year, or approximately $17,242.79 over 20 years after making the switch.
What are the environmental benefits of switching to solar energy?
You can lower your carbon footprint by 50 pounds of CO2 annually by switching to solar panels. This adds up to around 1,000 pounds in 20 years. In addition, solar power is a renewable energy source, which means that switching your home over lessens the drain on our planet's resources.
Can I use a combination of multiple types of renewable energy to power my home?
Yes, you can employ multiple types of renewable energy to power your home — for example, a combination of geothermal and solar. You can also use both renewable energy sources and a backup source of non-renewable energy. Be sure to discuss your plan with your local Mercer Island solar installation expert, so that you understand what you'll need and what types of incentives 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.