Washington State Law Encourages Locally Manufactured Distributed Generation and Renewable Energy Equipment

Two proposals unanimously passed by the legislature and signed into law earlier this month by Washington’s Governor, Christine Gregoire, should put distributed generation and renewable energy on the fast track in the state. The first bill (SB 5101) establishes a renewable energy production incentive that is larger if the equipment comes from in-state manufacturers. The second bill (SB 5111) provides corporate tax breaks for solar energy businesses in the state based on their sales.

SB 5101 reads in part:

The legislature finds that the use of renewable energy resources generated from local sources such as solar and wind power benefit our state by reducing the load on the state’s electric energy grid, by providing nonpolluting sources of electricity generation, and by the creation of jobs for local industries that develop and sell renewable energy products and technologies.

The legislature finds that Washington state has become a national and international leader in the technologies related to the solar electric markets. The state can support these industries by providing incentives for the purchase of locally made renewable energy products. Locally made renewable technologies benefit and protect the state’s environment. The legislature also finds that the state’s economy can be enhanced through the creation of incentives to develop additional renewable energy industries in the state.

Under the new law, homes and businesses with renewable, on-site power systems will earn a credit of 15 cents per kilowatt-hour (kWh) with a cap of $2,000 annually per household. The bill contains multipliers that increase or decrease the credit amount if components of the solar, wind or anaerobic digester are manufactured in Washington. For example, a photovoltaic project that uses solar modules and an inverter manufactured in Washington state would be eligible for a 54 cents/kWh payment. The program begins July 1, 2005 and sunsets on June 30, 2014.

The second bill (SB 5111) provides a tax credit to solar energy companies as a way to encourage photovoltaic and related equipment manufacturing in the state of Washington.

SB 5111 reads in part:

A recent report by the Washington State University energy program recognized the solar electric industry as one of the state’s important growth industries. It is of great concern that businesses in this industry have been increasingly expanding and relocating their operations elsewhere. The report indicates that additional incentives for the solar electric industry are needed in recognition of the unique forces and issues involved in business decisions in this industry.

Therefore, the legislature intends to enact comprehensive tax incentives for the solar electric industry that address activities of the manufacture of these products and to encourage these industries to locate in Washington. Tax incentives for the solar electric industry are important in both retention and expansion of existing business and attraction of new businesses, all of which will strengthen this growth industry within our state, will create jobs, and will bring many indirect benefits to the state.

The solar manufacturing tax credit allowed in the new law is roughly one-third of one percent of the value of the solar energy systems that are sold. The tax credit program ends June 30, 2014 and applies to firms meeting the criteria after October 1, 2005.

Full Story: http://www.newrules.org/de/archives/000061.html

Many thanks to Rick and Linda D for passing this along. Russ

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The New Rules Project – http://www.newrules.org/

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