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Renewable Energy Advantage: Incentive Structure

PSE's Renewable Energy Advantage Program (REAP) is based on WAC 458-20-273. It provides annual incentive payments, using a base of 15¢ per kilowatt hour (kWh) generated by an eligible system. As of September 2015, the 2016 rate is expected to drop between 2-5¢ per kWh, with latest calculations estimating a 3¢ drop, moving the base rate to 12¢. Base rates will be finalized in early summer 2016.

Annual adjustments

The total funds available for all annual incentive payments is 0.5 percent of the prior year's taxable power sales. Should the number exceed the limit of the total incentive funds available, the base rate will be reduced for all incentive payments. The base rate will continue to be adjusted annually until it is possible to pay an incentive payment to all customer-generators and administrators without exceeding the available funds. For more details, please see the Electric Tariff for Schedule 151.

Projected 2016 Incentive payment structure

The following rates are projected for 2016, based on September 2015 calculations. These rates will be adjusted annually and are projected to continue to drop as more participants join the program.
Customer-generated Power Base rate Factor Price per kWh
Solar modules and inverter both manufactured in Washington state 12¢ 3.6 43.2¢
Solar modules manufactured in Washington state 12¢ 2.4 28.8¢
Solar or wind generating equipment with an inverter manufactured in Washington state 12¢ 1.2 14.4¢
Any other PV system 12¢ 1.0 12¢
Wind turbine with blades manufactured in Washington state 12¢ 1.0 12¢
Any other wind turbine 12¢ 0.8 9.6¢
Incentive payments will be made once annually and are computed using the rate due, from the above table, multiplied by the total kWh generated during the payment period. The payment period is from July 1 of one year through June 30 of the next year.

Hybrid systems, such as a combination of solar and wind, will be paid at the lowest rate multiplier, unless each distinct part of the system is separately metered.

If a Customer Generator adds a new portion to the existing system (For instance, a new 1 kW array of solar panels manufactured in Washington), the lower payment factor will apply, unless the new portion of the system is separately metered.

There are a significant number of variables associated with the installation of a solar, wind or digester system, which affect the kWh generation of the system. Systems rarely have the same performance, even when they are installed on similar houses in the same neighborhood.

Payment examples

For a solar photovoltaic system, with a capacity of 1.5 kW, where the inverter is manufactured in the state of Washington, the annual rebate may look like this:

  • Annual kWh generated: 1,500 (assuming system has been installed and generating for a complete year)
  • Base annual incentive payment: $180.00 (12¢ X 1,500)
  • Rate multiplier: 1.2 times base rate (for inverter manufactured in WA)
  • Total annual incentive payment: $216.00 (14.4¢ x 1,500)

A PSE-owned production meter (in addition to the system's net meter) is also required to provide an accurate measurement of the electricity generated by the customer's system. Production meter installation fees will apply.

The incentive payment will be calculated from the production meter's reading on an annual basis. PSE will also provide generation data, payment eligibility and payments made information to the applicable state agencies on a regular basis.