view from the states
Selling the Sun in
Five years after legislators introduced a one-of-a-kind feed-in tariff program,
Washington’s solar economy takes hold.
mike Koshmrl (mkoshmrl@
’s editorial intern
and a graduate student
in the university of Colo-
rado’s journalism school.
he Washington state climate is not very conducive to solar energy. The Seattle metropolitan area has insola- tion levels as low as anywhere in the contiguous 48
states. Electricity is cheap, at just 6. 5 cents per kilowatt-hour,
thanks to Washington’s many hydroelectric dams — col-
lectively, they provide 78 percent of the Evergreen State’s
electricity needs. Even sun-deprived Alaska has pricey ener-
gy, which incentivizes its market for solar. But Washington
legislators have counterbalanced the insolation deficit with
an innovative feed-in tariff (FIT) program. Thus stimulated,
Washington’s solar economy looks primed to take off.
Washington’s FIT, known within the state’s solar com-
munity as the “production incentive program,” originated
under Senate Bill 5101, passed in 2005. Beginning in 2006,
it established tariffs, or rates, received for electricity gener-
ated from various non-hydro renewable sources. The rates
vary according to technology, escalating from a base of 15
cents per kilowatt-hour. If the renewable energy equipment
is manufactured in state, the rate is multiplied. Although
utilities are not mandated to participate, they receive a tax
credit, with restrictions, equivalent to annual FI T incentives
awarded to ratepayers.
A distinguishable feature of Washington’s FIT is that
participants receive the incentive rate plus the net-metered
value of the electricity. They get the renewable energy cred-
its (RECs) too, and Washington’s renewable portfolio stan-
dard (RPS) has a double incentive for distributed genera-
tion, so the RECs could be worth another nickel or more
per kilowatt-hour as the RPS goals ramp up. Combine all
three inputs, and a 54-cent incentive — the maximum rate
for a residential system in Washington — is worth closer
to 66 cents per kilowatt-hour.
Two other pieces of legislation, Senate Bill 6170 and,
most recently, Senate Bill 6658, have augmented the initial
program. The annual incentive cap per participant has been
increased from $2,000 to $5,000. The annual cap on utility
tax credits has been changed twice and is now settled at the
greater of $100,000, or 0.5 percent of taxable power sales.
Under SB 6658, community-based solar projects up to 75
kilowatts (k W) now qualify for incentives starting at 30
cents per kilowatt-hour — double the base rate other solar
projects receive. A community-based solar array, using a
Washington-made inverter and modules, now returns the
maximum benefit of $1.08 per kilowatt-hour.
Seattle’s largest utility, Seattle City Light ( seattle.gov/
light), expects to take advantage of the community incen-
tive to open up the solar market to renters, who comprise
50 percent of their ratepayers. A $300,000 grant from the
Copyright © 2011 by the American Solar Energy Society Inc. All rights reserved.
U.S. Department of Energy (DOE) will finance part of the
first project, a 30-k W system still in planning. For a one-
time payment (around $600), City Light customers can
voluntarily enroll in the program. Participants will get an
annual credit on their electric bill for the net-metered value
of the electricity produced by their portion of the system. In
addition, they will receive FI T payments at the rate of $1.08
per kilowatt-hour. With the combined credits, City Light is
aiming to return participants’ upfront cost within eight to
10 years. Enrollment fees from the first project will be used
to fund additional community-based arrays.
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