Summary:

In May 2005, Washington enacted Senate Bill 5101, establishing production incentives of $0.12 to $0.54 per kilowatt-hour (kWh), capped at $5,000 per year for individuals, businesses, and local governments that generate electricity from solar power, wind power or anaerobic digesters. The incentive amount paid to the producer starts at a base rate of $0.15/kWh and is adjusted according to how the electricity was generated by multiplying the incentive by the following factors:

•For electricity produced using solar modules manufactured in Washington state: 2.4  

•For electricity produced using a solar or wind generator equipped with an inverter manufactured in Washington state: 1.2  

•For electricity produced using an anaerobic digester, by other solar equipment, or using a wind generator equipped with blades manufactured in Washington state: 1.0  

•For all other electricity produced by wind: 0.8

Ownership of the renewable-energy credits (RECs) associated with generation remains with the customer-generator and does not transfer to the state or utility.  

 

The state's utilities will pay the incentives and earn a tax credit equal to the cost of those payments. The credit may not exceed the greater of $100,000 or 1% of a utility’s taxable power sales. The incentive amount may be uniformly reduced if requests for the incentive exceed the available funds.  

 

The Washington Department of Revenue (DOR) is responsible for submitting a report measuring the impacts of this legislation, including any change in the number of solar energy system manufacturing companies in Washington, and the effects on job creation, such as the number of jobs created for Washington residents.  

 

The incentives apply to power generated as of July 1, 2005, and remain in effect through June 30, 2020. A utility may not claim any tax credits for incentive payments after June 30, 2016.