Oregon Solar Rebates and Incentives

How Much Can You Save on Solar in Oregon?

Key Details

• The Oregon Solar + Storage Rebate Program offers rebates to eligible residential solar customers.
• A Federal Solar Tax Credit of up to 30% is offered on the cost of a solar PV system.
• Local utilities such as Portland General Electric or Pacific Power may offer additional rebate programs.
• Oregon provides a property tax exemption for any value added to an existing home by a solar system or other renewable energy systems.

Oregon home and business owners who install solar panel systems on their properties are eligible for federal, state, and local incentives that can significantly reduce their upfront costs. Such incentives include rebates and tax benefits (exemptions and credits) to lower the overall cost of installing solar power systems.

As of 2023, Oregon had 1360 MW of solar capacity installed in 37 solar installations across the state.

Oregon offers significantly higher financial incentives for solar energy than many other states. Homeowners who install solar panels may be eligible for thousands of dollars in refunds from the state and certain municipalities and utilities.

Federal, state, and local solar incentives in Oregon

How Cheap or Affordable is Solar Energy in Oregon?

Solar costs have dropped in Oregon dramatically over the past decade (2012 to 2022). As of 2023, solar customers in Oregon can expect to pay an average cost of $2.50 per Watt DC installed.

If the average solar panel cost in Oregon is $2.50/W, a 6-kilowatt (kW) solar panel system will cost an average of $15,000.

Renewable energy in Oregon

In 2020, renewable sources accounted for 68% of Oregon's total energy production. Hydroelectric power accounted 50%, wind power accounted for 14% , and solar accounted for 2% of the in-state electricity net output. Biomass accounted for about 1.5% of total net production in the state and geothermal energy accounted for less than 1%.

Energy Trust of Oregon Solar Incentives

The Energy Trust of Oregon(ETO) offers financial incentives to homeowners in the form of rebates. These rebates are often distributed through Oregon electric utilities and can pay for a significant portion of residents’ solar systems. Some of these incentives include:

• Cash rebates per project: Starting 2022, Portland General Electric and Pacific Power Solar now offers a flat $600 per project no matter the solar panel system size.
• Solar Within Reach: an incentive program through the ETO that provides incentives for income-qualified families.

To qualify for these rebates, interested parties must live in or own a business within the service area of one of these utility companies and install a new solar energy system that uses warrantied equipment and is compliant with all standards and regulations. The system must also be grid-tied, net-metered (for residential solar customers), and installed by an Trade Ally Contractor.

Local Utility Rebates

Residents that live outside PGE's or Pacific Power's service area, may still be eligible for other local Oregon solar incentives and rebates:

• The city of Ashland offers incentive payments of $600 to solar homeowners whose installations pass their electric inspections
• Salem Electric offers a $600 rebate for the first 3 kW of solar energy installed and $300 for each additional kW

Federal Solar Tax Credit in Oregon

The Federal Solar Tax Credit (also known as the Residential Clean Energy Credit or Investment Tax Credit (ITC)) was created by the Energy Policy Act of 2005.

With this incentive, citizens can deduct up to 30% of the cost of their solar energy system from their total federal tax liability. For example, if the overall cost of a photovoltaic (PV) system is $10,000, they can claim a $3,000 tax credit. As such, this tax credit helps reduce the initial cost of PV installations, allowing owners to shorten their solarpayback period.

The Inflation Reduction Act of 2022 resulted in several modifications to the ITC, increasing its value to 30%, and extending the program's expiration date to December 31, 2034. As a result, the value of the solar tax credit will be equivalent to 30% of the total cost of any solar project finished between 2022 and 2032.

Following that date, this a summary of the step-down timetable:

• Projects concluded between 2022 and 2032: 30%
• Projects concluded in 2033: 26%
• Projects concluded in 2034: 22%
• Projects concluded in 2035 or later: 0%.

What does the tax credit cover?

The tax credit covers these energy-saving equipment;

• Solar-powered devices that can produce electricity or heat water
• Solar power storage equipment with a capacity of at least 3 kilowatt hours (kWh)
• Qalifying labor, assembly, and installation costs.

Eligibility

To be eligible to receive the solar tax credit, interested parties must meet these requirements:

• The solar panels must be installed between January 1, 2017 and December 31, 2034
• The applicant’s property must be in the United States
• The solar equipment must be new or unused
• The solar system was purchased with cash or another type of financing that is not a lease or an agreement to pay for electricity generated by the system.
• The applicant has a tax liability that will be reduced or eliminated if the tax credit is received.

The solar credit may be claimed only once. Nontehless, homeowners who have multiple properties can claim separate tax credits for each solar installation they have completed. This is provided that the applicant owns the property and resides there for a part of the year. However, they cannot claim the incentive if they install solar panels on an investment property, such as one that is permanently leased out.

Furthermore, residents who qualify for the tax credit can use the solar tax credit rollover method to collect any remaining credit balance in future years.

For example, if the homeowner qualified for a $6,500 tax credit but only owed $4,000 in taxes one year, they could eliminate their tax payment for that year and then deduct an additional $2,500 from the tax payment the following year. Qualified homeowners may roll over any remaining balance until the end of 2032 when the solar tax credit will no longer be available.

How do I claim the Federal Solar Tax Credit in Oregon?

After receiving professional tax advice and confirmation of eligibility, interested parties can apply for the solar tax credit by completing the IRS Form 5695. and attach it to their federal tax return (Form 1040 or Form 1040NR). This form and the instructions for completing it are available online.

Typically, a comepetent solar company should provide the necessary paperwork and step-by-step directions on filing a claim for the ITC as part of the solar installation process.

Net Energy Metering in Oregon

Net metering legislation in Oregon allows all utility customers in the state to generate their electricity and, as a result, lower their monthly electric costs. Solar customers can profit from this initiative by selling excess solar energy to the local utility ( in the form of credits rather than cash). Like the tax credit, net metering reduces the time it takes for a solar system to pay for itself. It can also remove the need for battery storage.

Solar customers who generate more energy than they require in a month are given kilowatt-hour credits, which can be applied to future utility bills. This is particularly beneficial for customers who generate a large amount of electricity during the hot summer months.

In that case, they can use those credits during the winter when utility consumption is high but their system is incapable of producing enough electricity. If the credits are not redeemed within the year, they are given to low-income customers who have registered for assistance programs.

How to Enrol for Net Energy metering in Oregon

Residents can join the net metering program in these simple steps.

Step 1. Check to see if net metering is available in the area

All utility companies in Oregon are required by law to offer customers the choice of net metering for solar energy systems. As a result, interested parties can notify their utility provider of their intention to engage into a net metering agreement. Pacific Power and Portland General Electric also provide maps that can assist state residents in determining whether or not their area has access to net metering services.

Step 2. Fill out an application

Solar customers must complete an application based on the quantity of electricity their system will contribute to the grid. The best solar energy companies often handle the paperwork for their clients and only ask them to review and sign the document(s).

If the application is not approved right away, claimants can revise it and resubmit.

Step 3. Schedule inspection and installation

Before joining the net metering program, the county will subject the applicant's system to an electrical inspection. This ensures that it meets the requirements for contributing electricity to the grid.

After the application has been reviewed and approved, the homeowner may schedule an inspection and install a two-way meter, which will record the amount of electricity the property takes from and contributes to the grid.

Installing a new solar energy system is an excellent opportunity to take advantage of the net metering program. The contractor can incorporate the specifications of the utility supplier into the system design.

Homeowners who already have solar panels installed can still participate in the net metering scheme. However, a few changes must be made to guarantee that the system securely transfers power to the grid.

Oregon Property Tax Exemption

Under Oregon's Alternative Energy Systems Exemption, increases in property values coming from the installation of onsite "alternative energy systems," including solar PV systems, are exempt from the property's assessed value for property tax purposes. This lowers the ownership cost of solar panel systems, encouraging homeowners and companies to use them.

The initiative has resulted in property tax exemptions for over 5,700 alternative energy projects. It should be noted that the property tax exemption is set to end in mid-2023.

Building improvements boost the corresponding property tax because they increase the value of the property. Many states, including Oregon, have chosen not to tax any increase in property value caused by the installation of qualifying renewable energy systems.

Qualifying renewables include solar, geothermal, wind, water, fuel cell, or methane gas systems used to heat, cool, or generate electricity.

Oregon Property-Assessed Clean Energy (PACE) Financing

A Property-Assessed Clean Energy (PACE) loan is a financing mechanism overseen by the U.S. Department of Energy. Local governments use them to allow commercial, industrial, and multi-family property owners to fund energy efficiency and renewable energy improvements, such as solar systems, through property tax payments.

PropertyFit, also known as Commercial Property Assessed Clean Energy, or CPACE, is an initiative in Multnomah County, Oregon. It gives commercial building owners access to long-term financing for up to 100% of the cost of capital improvements that either reduce energy consumption or generate energy.

Multnomah County, the Portland Development Commission, and the Energy Trust of Oregon collaborated to develop this program to support the county's goals for reducing carbon emissions by making energy investment accessible to small, medium, or large-scale property owners.

It is worth noting that PACE loans are paid during tax assessments and are considered tax liens. With PACE financing, the property in issue serves as collateral, and the loan is tied to the property rather than the owner.

Hence, any remaining balance on a PACE loan remains intact when property ownership changes. As a result, it may be challenging to sell a home with a PACE debt attached because the loan stays attached to the property and is passed on to the subsequent owner.

What is the Oregon Solar + Storage Rebate

The Oregon Department of Energy established the Oregon Solar + Storage Incentive Program in line with House Bill 2618. The department was directed to create a program to provide rebates for the acquisition, construction, or installation of solar electric and paired storage systems.

The rebate applies to both standalone solar energy storage systems and systems with backup batteries. It can cover up to 60% of the overall cost of installing a new system, up to $5,000 for systems that operate independently, and up to $7,500 for solar energy systems that include batteries.

The rebates are distributed to authorized solar contractors rather than to solar customers, allowing the contractors to sell their solar systems at a significantly reduced price.

The minimal qualifications required to be eligible for this incentive include:

• The complete system must be implemented on a property entirely within Oregon's borders
• Solar companies that have been approved by the ODOE are required to buy and install all project-related equipment
• The entire system must score at least 75% on the Total Solar Resource Fraction rating system, which measures the amount of sunlight a location gets over a year.

Oregon Energy Profile

Oregon has a variety of energy sources, including a surge in renewable energy sources such as the sun, wind, and water. The use of solar power in the state has grown in recent years due to new technological advancements, various regulatory actions, and financial incentives enacted by the state government.

Additionally, despite their ability to perform in low-light settings, solar panels perform better if they receive a reasonable amount of direct sunlight daily. Oregon is considered entirely solar-friendly because many parts of the state receive as much sunlight annually as the U.S. average. The Willamette Valley and Eastern and Southern Oregon are examples of such places. Therefore, even though the state is not one of the sunniest in the country, it still has a lot of promise for solar energy generation.

Oregon Household Profile

Energy consumption in Oregon is assessed by its use in four major end-use sectors: residential, commercial, transportation, and industrial. In most residences and commercial establishments, energy is used for lighting, heating and cooling interior areas, cooking, and operating various equipment and home appliances. In the industrial sector, energy is used to power heavy machinery and industrial equipment.

Most of Oregon's transportation energy consumption comes from personal vehicles, fleets, shipments, air travel, etc.

In 2020, these four sectors consumed 983 trillion Btu of energy. The British Thermal Unit (Btu) is a standard unit of measurement for comparing and measuring the heat content of fuel and energy sources. The total per capita energy consumption was 231.8 million Btu, and solar energy contributed over 3.6 trillion Btu (0.00000036 million btu). Energy use or consumption per capita is how much the average person in the state uses.

Energy Consumption by Sector