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Washington Laws Encourages Locally Manufactured DG Equipment

| Written by John Farrell | No Comments | Updated on May 19, 2005 The content that follows was originally published on the Institute for Local Self-Reliance website at

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.

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.

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.


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About John Farrell

John Farrell directs the Energy Democracy initiative at the Institute for Local Self-Reliance and he develops tools that allow communities to take charge of their energy future, and pursue the maximum economic benefits of the transition to 100% renewable power. More

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