2024 Solar Incentives Guide for Richland, WA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Richland.
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 Richland?
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 meant to help mitigate the cost of installing a solar panel system on your home. This category of financial incentives is in place to encourage more people to switch their home over to renewable energy. The incentives might include cash back, upfront discounts or credit towards your monthly utility bill. Some incentives are provided by the federal government, some by the Washington government and some by your utility company, county or municipality. Categories of solar incentives include:
- Rebates: A rebate is a partial refund credited to your account after you've paid for your solar system. Rebates might be offered by your local utility company, your state or your county. The cash back that you get from the rebates is normally applied before tax credits are calculated.
- Net Metering: Net metering becomes relevant after your solar panels are up and running. If you've signed a net metering agreement with your Richland utility company, it will subtract the value of the excess energy your solar system produces from your utility bill each month. In some areas, this is a dollar-for-dollar credit, while in other places you might receive a refund equivalent to a percentage of the value.
- Tax Exemptions: Tax exemptions may come in one of two forms. The first 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 house.
- Tax Credits: Tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the federal government. (This is different from a tax deduction.)
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Federal Solar Incentives
When you hear the term "solar incentives," federal incentives are likely the first thing that comes to mind. You may have heard of the Federal Solar Investment Tax Credit, or ITC. This is a tax credit that reduces your taxes by a predetermined percentage of the money you spend on your solar system.
The ITC applies towards solar systems installed after January 1, 2006, and under this program you can deduct from your taxes a percentage of the total cost of solar panels, equipment, accessories and labor. This credit can be claimed on solar panels installed on a primary or secondary residence in the United States that you own. The original amount you could claim was 30% of the total cost, although depending on when the project was completed, your credit may range from 26-30%. There is no maximum amount you can claim.
Your local Richland solar panel installation expert can give you more information about the ITC and how it applies to your situation.
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 qualify for a credit equal to 30% of the total costs of solar system installation for projects that began after January 1, 2022, and will be finished by the end of 2032. This percentage will then decrease annually until the Clean Energy Credit expires in 2035. The expansion also makes credits for energy storage systems even easier to claim, starting in 2023.
Click here to learn more about the new Inflation Reduction Act. To understand how the new Clean Energy Credit will apply to you, reach out to your local Richland solar installers.
State & Local Solar Incentives
Some solar incentives may be provided by state and local governments. Similar to federal incentives, these might include rebates, tax credits and more. These incentives might be provided by the Washington government, or by your county or municipality. Some incentives may be ongoing, while others are available for a limited time.
Next Steps for Installing Solar in Richland
The expanding number of solar incentives available has helped tremendously increase the nationwide adoption of solar energy over the past 15 years. You may receive solar incentives from the Washington government, the federal government or your local utility company. Contact your local solar panel installer today to find out more information and to save the most money possible on a solar system for your Richland home.
EcoWatch's Richland, WA Solar Incentives FAQs
How much will a solar system save me on my electric bill in Richland annually?
Once you add solar panels to your Richland home, you can anticipate savings of approximately $969.89 per year, or about $19,397.85 over the next 20 years.
What are the environmental benefits of switching to solar?
You can reduce your carbon footprint by 50 pounds of CO2 a year by installing solar panels. This adds up to roughly 1,000 pounds in 20 years. In addition, solar power is a renewable energy source, meaning that switching your home over lessens the drain on our planet's resources.
When does the federal solar tax credit end?
The federal solar tax credit, formerly known as the ITC and now called the Clean Energy Credit, is scheduled to end on 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 claim incentives both towards the initial cost of solar panels, and later as reimbursement?
Yes, you can receive both rebates and tax credits towards the cost of your solar panels. Depending on which incentives you are claiming, they may apply in a different order. Be sure to speak with your solar installer or a local tax professional to ensure that you are claiming the correct incentives and getting the most money you can.
Can I use both solar and another type of renewable energy to power my home?
Yes, you can utilize multiple types of renewable energy to power your home, such as a combination of solar and geothermal. You can also combine renewable energy generation with a non-renewable backup source of energy. Be sure to discuss your proposed plan with your local Richland solar installation expert, to make sure you know what you'll need and what types of 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.