Oregon's Solar Rebates and Incentives Programs

Oregon is synonymous with green. Not only is its largest city Portland, greenest U.S. city two years running, but the very landscape exudes green in all its natural shades, from the pastoral lowlands to steep, evergreen mountainsides. With all that green comes Oregon and the Northwest's reputation for rain and clouds; a reputation that makes one wonder how the state could possibly support solar energy. Yet Oregon defies that rep by wholeheartedly supporting renewable energy, including home solar power.

It is home to German solar giant SolarWorld's U.S. headquarters and largest manufacturing plant, the Columbia River Gorge, comprising Oregon's natural border with Washington, is world famous for its wind power and there are a slew of solar rebates available for energy conscious homeowners.

Renewable Portfolio Standard

Any state's progress toward renewable energy begins with its renewable portfolio standard (RPS). These are laws that require utilities to extract a certain percentage of their energy from renewable sources by a set year. In Oregon, law mandates that all large utilities (those with 3% or more of the state's load) have 5% renewable electricity by 2011, 15% by 2015, 20% by 2020 and 25% by 2025. Smaller utilities are held to a lower standard, but the vast majority of Oregon's population get their power from two utilities, Portland General Electric (PGE) and Pacific Power. Oregon has one of the most aggressive RPSs in the nation, which in turn has spawned an array of solar rebates and incentives...

Renewable Energy Tax Credit

Encompassing PV, Passive solar heat, solar water heating and solar thermal space heating, this tax credit is a go-getter--mainly due to the high cap for PV systems. Incentive rates for photovoltaic systems are $3.00 per watt up to $6,000 or 50% of the total system cost. The lesser of the two will determine the amount of incentive. However, tax credits may not exceed $1,500 in a single year or the homeowner's tax liability for that year, so the credit is typically doled out over four years (credits may be carried over for five years max).

Credits for solar pool heating are $0.15/kWh saved in the first year after the system is installed. For all other systems the going rate is $0.60/kWh saved in the first year. The maximum credit allowed for all heating systems is $1,500.

Qualifying energy systems must be certified by the Oregon Department of Energy (ODOE) before installation or the system must be installed by an ODOE-certified contractor. As of right now this tax credit will expire on December 31, 2015.

Renewable Energy Systems Tax Exemption

Solar thermal, solar PV and passive solar systems are exempt from property taxes in Oregon. This means that whatever amount a solar system might add to the value of your home cannot be factored into property tax assessments which, in the long run, could lead to big savings or profits for solar homeowners. For more information visit the Oregon Department of Energy.

Local Option - PACE Financing

Oregon allows cities and counties within the state to develop and administer increasingly popular Property Assessed Clean Energy (PACE) programs. Under these programs municipalities establish public bonds from which homeowners can borrow money to install home solar power systems without any up front costs. The balance is paid back over time through a voluntary increase on property taxes. Should the homeowner move residences, the loan stays with the property and thus transfers to the new owner. In Oregon, cities may also elect to have loans paid back through utility bills, and instead of issuing bonds to fund the program, cities may borrow money from the Oregon Department of Energy. Call your local government to find out if your city or county offers PACE solar financing.

Energy Trust Solar Buy-Down Programs

The Oregon Energy Trust is a nonprofit, public-purpose organization designed to invest funding for energy efficiency and renewable energy in Oregon. The Energy Trust has two "buy-down" programs that offer rebates for solar power: one for solar water or pool heating and one for solar electricity. These rebates are only available to customers of PGE and Pacific Power, as Energy Trust funding is accrued through charges on their customers' electric bills.

Solar Water Heating

This buy-down program targets solar hot water systems and solar pool heating. If you have an electric heating system (PGE, Pacific Power customers), you receive $0.40/kWh for hot water systems and $0.10/kWh for pool heating. Maximums are $1500 for hot water and $1000 for pool heating systems. Incentives are calculated by multiplying the appropriate incentive rate by the systems expected annual performance.

Solar Electric Buy-down Program

This program is designed for customers of Pacific Power and Portland General Electric (PGE). Rates are $1.50/watt for Pacific Power customers and $1.75/watt for PGE customers. The maximum on both is a whopping $20,000.

Requirements state that the system must be new and minimum warranties are two years on parts and labor, five years for inverters, and 20 years on the panels themselves. Self-installed systems are not eligible and professional installers must be Energy Trust-certified. Energy Trust rebates are paid to the contractor and then deducted from the final cost of the system.

For more information visit http://energytrust.org/

Small Scale Energy Loan Program

Oregon also offers loans to homeowners and business looking to install renewable energy systems. Qualifying solar systems include Passive space heat, solar water heat, solar thermal, and PV. While there is no specific range set for loan amounts, the loans are generally between $20,000 and $20 million. Terms for the loans will also vary but are generally set at 5-15 years. Loan terms may not exceed the life of the system.

Loan applications are available at the state of Oregon's website.

Net Metering

Net metering in Oregon includes ALL the utilities in the state, not just the investor-owned utilities, as is the case in most states. Although compensation still varies by utility.

For customers of Oregon's investor-owned utilities, PGE and Pacific Power, net excess generation (NEG) is credited on the next month's bill. At the end of the annual billing cycle, the NEG is credited to customers enrolled in Oregon's low-income assistance programs.

While the handling of monthly NEG is the same, municipal utilities, cooperatives, and People's Utility districts have a bit more discretion when apportioning annual NEG. Excess electricity generated by the customer of these utilities may be credited to low-income customers, returned (at the avoided cost rate) to the generating customer, or designated for some "other use."

Oregon Pilot Feed-In Tariff

In 2009, Oregon decided to try its hand at a pilot feed-in tariff program for PV systems. Feed-in tariffs (FITs) pay solar power producers a higher-than-retail rate for excess energy fed into the electric grid. Participating PV systems in the FIT pilot program must be grid-connected and generate power primarily for sale to the utility. The aggregate capacity for the pilot program is 25 megawatts AC and the maximum size for an individual system is 500 kilowatts. Given the "generate power primarily for sale" clause in the legislation it would seem that most home solar power systems would be out of the loop. However, the law also states that 75 percent of the program cap must come from small-scale systems - 10 kW or less for residential systems.

When passed in July 2009, the FIT law did not establish incentive rates for the pilot. The Public Utilities Commission (PUC) was required to set specific rules and rates by March 18, 2010, but that date has been pushed back to July 1, 2010 due to some legal questions. When the rates are set and the pilot program takes off, qualifying owners of systems will enter into contracts with the utility in which rates are paid for kilowatt-hours of solar electricity produced over 15 years. The program will close either when the 25 MW cap is reached or on March 31, 2015, whichever comes first.

As of May 28, 2010 (The Oregonian), rates have been set by the Oregon PUC, and they are lucrative. Homeowners can receive up to $0.65 per kilowatt-hour for solar electricity produced, but rates will vary based on four regions in the state. For example, a resident of Portland would be eligible for the 65-cent maximum but a resident of sunnier eastern Oregon would be eligible for only $0.55 per kWh. The PUC plans to reevaluate the rate structure every six months, although once an agreement is signed with the utility the customer's rate would be locked in for the entirety of the 15 year term. Both Pacific Power and Portland General Electric (PGE) are participating in the pilot program. The FIT program may be used in conjunction with the federal 30-percent tax credit but may not be combined with any other Oregon tax credit or rebate.

Other Options

There are a number of other incentives available in Oregon that are not run by the state. For instance, the city of Ashland has its own net metering rules and several utilities have individual solar hot water and even PV rebates as well. To find information more specific to your location contact your utility, city of residence and/or the Database of State Incentives for Renewables and Efficiency (DSIRE).