Avista Utilities is offering a credit of up to $2,000 a year to ratepayers in Washington that produce electricity with qualifying wind, solar, or anaerobic digester generating systems.


Through the program, the company will give credits of 12 cents to 54 cents per kilowatt-hour to customers who generate power from such renewable-energy systems, says Chris Drake, the Spokane utilitys residential program manager.


Avista will receive a sales-tax credit of $1 from the state of Washington for each $1 credit it gives to ratepayers under the program, Drake says.


For a ratepayer to be eligible for a credit, the state needs to certify that a generating system meets requirements, he says. He adds that the state recently completed implementation rules for the program and has approved a payment table.


The credit ranges from 12 cents per kilowatt-hour of electricity generated with wind power to 15 cents for electricity generated with either solar power or wind-power systems that use blades made in Washington, Drake says. The credit increases to 18 cents for both wind and solar systems that use an inverter manufactured in Washington state. An inverter converts electricity to alternating current from direct current so it can be put on a utilitys grid.


The solar-power credit will go up an additional 36 cents per kilowatt-hour if a system uses solar panels that are produced in Washington, although none are available now, Drake says. Through that additional credit, he says, Theres some motivation for people to come up with new technology.


The credit for anaerobic digester systems, which convert cattle manure to biogas thats burned to run a combustion turbine, will be 15 cents kwh.


No Avista ratepayers have qualified for the incentives yet, but weve had a huge amount of inquiries, Drake says. Avista anticipates that the program will add only a small amount of electricity to its grid, he says.


Yet, he adds, For people who have an interest in this anyhow, how great this is to have.


The legislation isnt written to exclude larger businesses, but with the $2,000 cap, ratepayers will put in relatively small systems, Drake says. Still, it would be difficult for a small-business or residential customer to generate enough power to receive the maximum $2,000 credit in a year, he says.


At the reimbursement rate of 18 cents a kilowatt-hour, it would require generation of 11,111 kilowatt-hours of electricity, or more than most homes use, to qualify for the $2,000 credit, Drake says. Homes that heat hot water with natural gas and have natural-gas furnaces use an average of 800 kilowatt-hours of electricity a month, or 9,600 kwh a year, for other household requirements, he says. He says small-scale renewable-energy generation systems dont generate that amount of electricity in 12 months time.


For example, a three-kilowatt solar-power system, which would cost about $24,000 to buy and install, would allow a residential or small-business customer to generate power for an average of four to four and a half hours a day here and produce an average of 12 to 13.5 kilowatt-hours of electricity a day, Drake says. He says thats a maximum of 4,927 kilowatt-hours of power a year, which would provide a total credit of $886.86, provided that the system used an inverter made in Washington, he says.


Its still probably a 30-year payback for solar, he says.


Of course, customers would benefit in several ways: from the credit, by supplying some of the power they need, and by reducing purchases of electricity from Avista while using their own kilowatts.


A production meter on each approved small generating system would measure the amount of electricity a customer generated, and a billing meter would measure how much of that power the customer used and how much of it went onto Avista Utilities grid. If theyre generating more than theyre using, it puts it on the grid, Drake says.


The credit would be available both to customers who buy new systems and to customers who already had systems in place when the program, announced Sept. 15, began, Drake says. The credits would be provided through 2014.


To qualify for the program, customers would need to have an interconnection agreement in place with Avista, and they should contact Avista before buying generating systems so interconnection and metering agreements can be set up, Drake says. Local governments, nonprofit organizations, school districts, and others also are eligible for the program. For bigger, multi-party systems, the way you get over the capital investment hurdle is to do some grant writing, he says.


Residential ratepayers are eligible for a federal tax credit of 30 percent of the cost of putting in such systems, subject to a $2,000 cap, while small businesses are eligible for a federal tax credit equal to 100 percent of the cost of systems, without a cap on the credit, Drake says.


While that statement is generally correct, ratepayers should do careful research on the tax implications before putting in generating systems, says Chris Hesse, director of taxation for the Spokane certified public accounting firm LeMaster & Daniels PLLC. He says, There are many circumstances that can affect that issue.


Contact Richard Ripley at (509) 344-1261 or via e-mail at [email protected].