2023 WAShINGTON State Commercial Incentives
Washington State Solar Tax Exemption
Here’s how the State Solar Tax Exemption Works
Federal Solar Investment Tax Credit (ITC)
Our Federal government incentivizes businesses to purchase solar by reducing the barriers to entry. This incentive lowers your federal tax obligations on a dollar-to-dollar basis, through a cash rebate. There is no ceiling on this tax credit. The Federal Solar Investment Tax Incentive is worth 30% of the total purchase price of your solar system, no matter the system size or cost.
Currently, the 30% Federal Solar Income Tax Credit applies to all solar projects that begin construction in 2023. The 30% tax credit will last through 2033, at which point it will drop to 26%.
For every dollar your solar system costs, the federal government will award you 30 cents back in tax credits. This is how you reduce your overall federal tax liability. This is a dollar-for-dollar tax rebate, not a tax write-off. There is no ceiling on the amount of tax credits you can be awarded – the 30% credit applies, no matter the size of your solar system.
You will receive 30% of the total cost of your solar system on your next year’s tax return. For instance, if the final purchase price of your new solar system is $20,000, you will get an additional $6,000 back from the federal government.
Calculation example 1:
$50,000 cost x 0.30 rebate = $15,000
In this example, you will receive an extra $15,000 back from the federal government.
Calculation example 2:
$100,000 cost x 0.30 rebate = $30,000
In this example, you will receive an extra $30,000 back from the federal government.
Rural Energy For America Grant Program
The REAP Program has 2 primary goals:
REAP Grant Terms:
REAP Loan Terms:
Who Is Eligible?
How To Qualify:
How To Apply For REAP Grants and Loans
The REAP Program’s 3 Tiers
Tier 1: Solar installations that will cost less than $80,000
Tier 2: Solar installations that will cost more than $80,000 and less
Tier 3: Solar installations that will cost more than $200,000
Planning Is Critical
Thoroughly preparing before you apply will greatly improve your chances of being approved for the REAP grant. Be sure to get in touch with your state’s energy coordinator as soon as possible. They will need to conduct an environmental review of the installation site before you begin your application. Months before the REAP Application deadline of March 31st, 2023, you’ll want to make sure you’ve applied to the System for Award Management and Dun & Bradstreet.
You Can Combine Solar Incentives
The REAP Grant can be combined with any of the other solar incentives available to you. The REAP application requires you provide a funding commitment statement that includes any other solar incentives you’ll be taking advantage of. For this reason, you’ll want to be sure to arrange other solar incentives first before applying to the REAP Program.