Tax Credits and Incentives to Go Solar Electric

In Oregon and Washington, financial incentives are available through many electric utilities to help make residential solar more affordable if you decide to own your own solar system. In fact, utility incentives, combined with tax credits, often covers 70-85% of the total costs to install and own solar. There are different tax credits and incentives available to homeowners that affect the average cost and payback period of installing solar.

Federal Tax Credit

Both Oregonians and Washingtonians are eligible to receive Federal tax credits, which is 30% of total system costs (minus any utility incentive). These tax credits can be taken in the year the system is operational or can be carried forward into the next year if the credits exceed tax liability. There is no pass-through option for federal tax credits. Homeowner installs can qualify, but need to be verified by a tax credit-certified technician. Both grid-tied and off-grid solar systems are eligible to receive the Federal tax credit.

Oregon Residential Energy Tax Credits

The Oregon Residential Energy Tax Credit (RETC) is provided by the state of Oregon.

The maximum RETC is $6,000 per site and cannot exceed 50% of the project cost after the utility incentive. Generally, any system above 3.5 kW will have maxed out the RETC and receive the full $6,000. The RETC can only be claimed at a maximum of $1,500 per year, so the full amount can take up to 4 years to recover. In order to qualify for the RETC, a system needs to produce 75% or greater of TSRF (Total Solar Resource Fraction). Homeowner installs can qualify, but need to be verified by a tax credit-certified technician.  Both grid-tied and off-grid solar systems are eligible to receive the RETC.

Oregon Utility Cash Incentives

If you’re solar system is grid-tied (most solar systems), there is a good chance your utility provides a cash incentive to support you going solar. These utility cash incentives vary from utility to utility:

Is your utility Pacific Power or Portland General Electric?

The largest provider of renewable energy incentives in this state is the Energy Trust of Oregon. They receive funds from five privately owned utilities (Portland General Electric, Pacific Power, NW Natural Gas, Cascade Natural Gas and Avista) through a public purpose charge on rate payer monthly bills. This money is paid out for qualifying renewable energy and energy efficiency projects. Customers of Portland General Electric and Pacific Power qualify for cash incentive if they install a solar PV system.

These Energy Trust cash incentive are generally paid directly to the solar contractor. They act as a coupon on the total solar system cost, decreasing the amount you pay the contractor.

The application for Energy Trust Incentives must be made prior to construction. To be eligible to for Energy Trust incentives, the solar installation must meet the following four requirements:

  • Have a solar resource (TSRF) of 75% or higher
  • 10 years of roof life
  • Be installed by a certified Trade Ally of Energy Trust of Oregon.
  • Be a grid-tied system in Pacific Power or Portland General Electric territory.

Have an Oregon electric utility other than Pacific Power or Portland General Electric?

Many of the other electric utilities in Oregon (PUDs, co-ops, municipal utilities) also provide incentives to their customers install solar PV systems. The Database of State Incentives for Renewables and Efficiency (DSIRE) has a comprehensive list of utility incentives across Oregon. (When on the DSIRE site, we recommend using the filter tool and selecting “Solar Technologies” Technology category and “Rebate Program” in the Program Type category.)