Jlarc Preliminary Report:
2016 Tax Preference Performance Reviews

Customer Generated Power | Public Utility Tax

< All  2016 Tax Preference Performance Reviews

The Preference Provides

A tax credit to utilities to offset a portion of the public utility taxes they owe on their total annual sales. Utilities are eligible for the credit if they administer a program that provides payments to their customers who produce their own power with renewable energy systems. The tax credit is equal to the amount the utilities pay their customers for the power they generate, regardless of whether they use the power or it flows back into the power grid. 

The preference is scheduled to expire June 30, 2021.

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Estimated Biennial Beneficiary Savings

$55 Million

Tax Type

Public Utility Tax 
RCW 82.16.130

Public Policy Objective

The Legislature stated its intent for this preference was to provide incentives for:

  • The greater use of locally created renewable energy technologies; and
  • Supporting and retaining existing local industries, and creating new opportunities for renewable energy industries to develop in Washington.

Recommendations

Legislative Auditor’s Recommendation

Review and Clarify: While there has been growth in locally made systems and associated opportunities for businesses, this growth is concentrated in a small number of solar energy system manufacturers. As part of the clarification, the Legislature should include targets for how many new local renewable energy systems it hopes to create and how much power capacity it hopes to generate through the use of this preference, as well as which local industries it would like to support.

Commissioner Recommendation: Available in October 2016