Solar Power Rebates, Tax Credits and Solar Panel Incentives in West Virginia; 2012 Update
We have recently had a look at what is available for those looking to install solar power in West Virginia.
State Tax Credit
|Incentive Type:||Personal Tax Credit|
|Eligible Renewable/Other Technologies:||Solar Water Heat, Solar Space Heat, Photovoltaics|
|Equipment Requirements:||Solar energy system used to provide hot water must derive at least 50% of its energy from the sun|
|Carryover Provisions:||Excess credit may be carried forward to each of the next taxable years until exhausted (up to four years)|
|Authority 1: Date Enacted: Date Effective:||W. Va. Code 11-13Z 06/05/2009 07/01/2009|
|Authority 2: Date Enacted:||Tax Administrative Rule 110-21D (Agency Approved Rule) 11/2009|
Summary: West Virginia passed legislation in June 2009 authorizing its solar energy tax credit for residential installations. The tax credit, which is 30% of the cost to purchase and install the system, is capped at $2,000 and expires on 07/31/2013. If the credit exceeds the taxpayer's liability, the unused portion of the credit may be carried forward to "each of the next taxable years" until it is used (but may not be carried forward past July 1, 2014). Taxpayers must complete Schedule SETC and file it along with their personal state tax returns.
Federal Tax Credit
As with all other states there is a Federal tax credit available for 30% of the cost of installing solar electricity panels.
Net metering in West Virginia is available to all retail electricity customers. System capacity limits vary depending on the customer type and electric utility type, according to the following table.
IOUs with 30,000 customers or more
IOUs with fewer than 30,000 customers, municipal utilities, electric cooperatives
Net excess generation (NEG) may be carried over to a customer-generator's next bill as a kilowatt-hour (kWh) credit at retail rate and may be rolled over, indefinitely. The credits may only be applied to the energy portion of the bill (not fixed costs or demand charges, for example). Customers may aggregate meters (either physically or virtually) and apply net metering credits earned on one meter to additional meters, as long as they are located within two miles of the point of generation. The associated costs of meter aggregation are the responsibility of the customer. The net metering policy in West Virginia is quite good because it gives a genuine one for one credit. This means the value you get for solar power that you feed back into the grid will increase over time as the prices of power goes up. The law requires that net-metering tariffs must be identical in rate structure, retail-rate components, and monthly charges, to the tariff for which the customer would qualify if that customer were not a customer-generator. The issue of who owns the alternative energy credits (also known as renewable energy credits, or RECs) remains unresolved at the time of printing this page (2012). Each customer with a net-metered system up to 50 kW must carry a minimum of $100,000 in liability insurance. Customers with systems greater than 50 kW and up to 500 kW are required to carry a minimum of $500,000, and customers with systems greater than 500 kW must carry a minimum of $1 million in liability insurance.
Renewable Energy Portfolio standard. West Virginia requires utilities to generate from renewable sources or alternative energy a certain percentage of the electricity that they sell. In July 2009, West Virginia enacted House Bill 103, the "Alternative and Renewable Energy Portfolio Standard."[i]This law requires investor-owned utilities with more than 30,000 residential customers to supply 25 percent of retail electricity sales from alternative and renewable energy by 2025. The breakdown of the target is: The standard sets the following minimum benchmarks for electric utilities based on their annual electricity sales:
- 10% from 2015 to 2019
- 15% from 2020 to 2024
- 25% by January 1, 2025
The problem, from a solar power perspective is that technically all the power requirements could be met by other types of generation but still it is a start. Renewable energy does attract 2 credits for every megawatt hour which does give it an advantage over other non-renewable power sources. Watch this space for more news on the development of a trading system for these credits and whether or not they will be owned by the customer or the utility in a net metering situation. With average electricity prices hovering around 11 cents look at the great return you can get from installing a solar electricity panels:
|Size of System (kw)||
|Space required (square feet)||
|Price of system per watt||
|Price of power (marginal cost high usage kwh's) $ per kwh||
|Average daily kwh produced per 1 kw of solar||
|Total average daily production||
|Total Price (before incentives)||
|Federal Tax Credit||
|State Tax Credit||
|State Rebate (assuming PGE or SCE level 9, other utilities may be more)||
|Actual out of pocket cost after incentives claimed through tax system.||
|Annual Power production||
|Total Annual Energy savings based on net metering at 1:1||
|Annual Return on Investment||
|Return rises to around 14% annual return after 8 years if you assume just a 7% annual increase in power prices|
|Payback Time assuming 7% annual increase in power prices||8 years|
The beauty of a solar power system as an investment is that the annual return you get from having one increases each year as electricity gets dearer. With these economics West Virginia residents should be beating a path to their local solar installer before the state tax credit ends. Click "here" to get quote from local licensed installers in your state.