For anyone contemplating the notion of “going solar”, it might be best to move fast. Why? Recent revelations in solar news indicate that the residential solar tax credit of $6,000 in Oregon is going to be disappearing by the end of the year. Even more disappointing is the fact that cash incentives for solar which are provided via Energy of Trust Oregon are probably going to be diminishing before the end of this year as well. People who have benefitted from solar energy projects throughout Oregon are likely to attempt to cash in their solar tax credit prior to its expiration. But how will the impending expiration of the RETC impact potential solar projects? What does it mean for the future of solar? Here is what the most recent relevant solar news has indicated:
Energy Trust recently communicated to its registered contractor network that, “Solar project volume will be higher than normal through the end of 2017, leading to more frequent incentive reductions in response to demand.”
This certainly is practical. Incentive rates via Energy Trust have been decreasing as is. During the first part of 2015, average incentive rates were $.80 per watt. However, by January, the rates were just about sliced in half. Currently, the rates are $.30 per watt. This applies to Pacific Power and Portland General Electric customers. The expectation is that these incentive rates will only continue to drop, possibly to as low as $.20 per watt.
Until the end of 2017, individuals living in Oregon can take advantage of the Residential Energy Tax Credit. The established rate is $1.30 per watt of installed capacity, up to $6,000, which can be taken over the duration of four years. Here are the specifics according to Energy.gov:
Incentives are available for photovoltaic (PV) systems, solar space and water heating systems, pool and spa heating systems, ground source heat pumps, fuel cells, and pellet and wood stoves. Wind turbines are qualified for incentives according to system construction. The maximum incentive available for PV systems, fuel cells, and wind turbines is the lesser of $6,000 (over four years) or 50% of the net costs (calculated after any state incentives). Residents who have PV credits which have not been used are able to carry the credits onward for five years. Solar hot water heaters obtain credits equivalent to the lesser of either $2 per kilowatt hours (kWh) produced in year number one, or 50% of the cost of the device, with a maximum incentive of $6,000 (or $1,500 a year).
Here’s how it balances out: when an individual takes advantage of the complete rebate available with the Residential Energy Tax Credit, considering current solar rates, their solar tax credit can remove roughly a third of their total bill. When it comes to solar, the residential tax credit makes it even more enticing – but sadly, this particular incentive to go solar will no longer be available. Will this mean that going solar will become less enticing to potential customers who are new to the idea of solar?
The answer is – hopefully not, but it just might deter people from going solar. Solar installers are indeed worried about business without the Oregon Residential Tax Credit. Their solution is to lobby for a new credit during the legislative session in 2018. Solar installers did undeniably attempt to lobby for a postponement because they understand that prices haven’t dropped quite enough to establish the solar industry (which is growing very quickly) on completely solid ground without having the advantage of the tax credit. With managerial and budget concerns, however, a credit renewal did not happen.
It is important to note that previously, as per Energy.gov, this RETC was set to expire in 2012, but House Bill 3672 (2011) prolonged the termination date of the tax credit to January 1, 2018, with the exclusion of the alternate fuels vehicle portion of the tax credit, which did in fact end as it was scheduled to in January of 2012. Previously, the RETC presented incentives for appliances such as dishwashers, washing machines, refrigerators, air conditioners and boilers. Nevertheless, House Bill 3672 omitted these technologies as of the beginning of 2012. Though eligibility for alternative fuel vehicles was terminated in the beginning of 2012, alternative vehicle infrastructure projects, to include fueling or charging devices, are qualified as of January 1, 2012.
Oregon Department of Energy (ODOE) has altered further facets of the RETC rules since then, typically in order to implement legislation changing qualified technologies and incentive sums. To put it briefly, there have been a great deal of politics surrounding the Residential Energy Tax Credit, and changes have been made over time. Hopefully, a new credit will be created to entice potential solar customers who are curious about the benefits of solar to take the leap and, in fact, go solar.
How To Benefit from the Oregon Residential Tax Credit Before It’s Too Late
In order to take advantage of the credit prior to its expiration, a deposit needs to be made before the end of 2017, and the solar system needs to be set up by April 1, 2018. Rebates are shrinking and the tax credit is expiring, so it is important to get everything in place for anyone intending to go solar, before the end of the year.
Here is what people interested in solar projects in Oregon need to know in a nutshell regarding the RETC:
- The Residential Energy Tax Credit (RETC) will be expiring at the end of 2017.
- Persons living in Oregon can still apply for a Residential Energy Tax Credit to lessen their costs for investments made in solar.
- Bills to extend the Residential Energy Tax Credit which were proposed in the 2017 state legislative session were not passed. This means that the Residential Energy Tax Credit will end on the last day of December in 2017.
- Energy Trust of Oregon does not participate in political concerns. They do, however, stay on top of developments which will possibly impact programs used by their valued customers, for instance, the obtainability of solar tax credits.
Here are some anticipated impacts of the expiration of the Residential Energy Tax Credit:
- The volume of solar projects will increase until the end of 2017. 2018 incentive levels will be determined by the solar program this fall during the process of budget planning.
- In 2018, it might be seen that without the Residential Energy Tax Credit, the costs of solar energy measures might become higher than savings.
- In regards to solar photovoltaic systems, solar projects need to be contracted with the deposit made by the end of 2017 in order to be eligible for a Residential Energy Tax Credit. In addition, the solar system will need to be installed by April 1, 2018.
Solar Will “Power On”
It is important to note that despite the impending expiration of the Residential Energy Tax Credit, a national solar company is betting in the ballpark of $1 billion on a development spree in Oregon. The development spree includes five solar farms in both Polk and Marion counties. A developer which presently runs several solar sites in Oregon alone is going to be building new solar farms. This developer is Cypress Creek Renewables and they operate in 15 states.
Captivatingly, the solar farms in Polk and Marion counties will take up approximately 12 acres a piece, and they are expected to produce enough solar energy to provide solar power to 450 homes. This demonstrates in itself how far-reaching solar can be. Solar truly is the way of the future.
Amy Berg Pickett is a Cypress Creek Renewables spokeswoman who said, “Solar is needed in this area as part of the renewable energy mix. It’s good to site solar where the energy is going to be used.”
The solar farms are going to employ local workers, and the result will be a lot of jobs in solar that pay well. Just in the year 2016 alone, there were more than 4,500 persons employed in the solar energy industry just in Oregon alone. Back in 2015, there were just under 3,000 persons working in solar energy jobs. The number is now up roughly 50 percent. These numbers are from the Solar Foundation, which is a nonprofit in Washington, D.C. People want to work for companies focusing on solar projects because they know how beneficial solar energy is.
Cypress Creek Renewables will benefit from federal solar investment tax credits. This will let the business write off 30 percent from the total amount which is put into a solar project.
The Numbers Are Remarkable: Cypress Creek Renewables
Matt McGovern, Cypress Creek Chief Executive said while writing to congressmen overseeing a subcommittee on power and energy, “In Oregon we have 17 projects either operational or in construction totaling just shy of $500 million in investment, with another $346 million worth in development.”
The numbers are impressive. Nonetheless, Amy Berg Pickett stated, “We will not be blanketing the state with solar. No solar company will, because there’s no avenue for that.”
Because solar farms produce energy during daylight, production will decrease during the fall when there are more clouds in the sky. Regardless, roughly 24 rows of solar panels outside Silverton are just about finished. On this particular solar farm, there are roughly 9,600 solar panels installed. Completed projects can take years, so the site in Silverton might be fully operating in the beginning of 2018 seeing as how construction has gone on for a few months now. How locals will take advantage of solar energy through companies such as Cypress Creek Renewables with regards to the expiration of the Oregon Residential Energy Tax Credit is yet to be seen.
It is clear that people are recognizing the benefits of solar energy. It is clear that solar energy projects create jobs. It is obvious that solar energy is better for the planet. While the Oregon Residential Tax Credit will be expiring, innovators will still see ways to use solar energy to benefit everyone – the next step is to come up with financial incentives which can be taken advantage of in the future. The goal is to encourage more and more people to go solar. Steering the planet towards solar means steering the planet towards the future.
Yes, solar installers are concerned when it comes to business without the Oregon Residential Tax Credit. However, they will work to lobby for a new credit during the legislative session in 2018. It is important to recognize how significant the Oregon Residential Tax Credit is for persons interested in going solar. Follow up with the latest solar news to stay on top of what is happening. Remember, going solar is good for people, the planet and of course, bank accounts in the long run. Follow solar news to stay updated with regards to tax credits benefitting solar customers.