Washington Solar Incentives and Tax Credits (2024)

By Jessica Wimmer Updated February 6, 2024

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The Evergreen State has nearly $1.5 billion invested in solar energy, according to the Solar Energy Industries Association, and state incentives inspire more Washington residents to switch to renewable energy every year.

We recently ranked the best solar companies and found that Washington State offers homeowners multiple exemptions and rebates to help save them money on solar power systems. See which solar incentives Washington residents can claim below.

 


 

Overview of Washington Solar Incentives

IncentiveWhere It Comes FromWhat You Get

Solar easement law

State government

Government support for installing an effective system on your property

Sales tax exemption

State government

6.5% savings on your system

Net-metering

Local utility companies

Money back for your excess electricity

Federal solar tax credit

Federal government

30% of the system cost claimed on taxes

 


 

Washington Solar Incentives, Tax Credits, and Rebates

While purchasing a solar energy system is a worthwhile investment, it’s still an investment. Fortunately, Washington offers solar buyers a few ways to reduce their costs.

Solar Easement Regulations

Washington’s state government supports sustainable energy usage so much that there’s a law preventing neighbors or homeowners associations (HOA) from impeding your solar installation. If a neighbor’s tree or other structure shades your rooftop solar panel system while the sun is out, under state law, you can enter into a solar easement contract with your neighbor to ensure adequate sun exposure. These regulations also prohibit your HOA from restricting your system.

Your solar installer should be familiar with these regulations and can help you navigate easement laws. Your solar company should obtain the following during your consultation:

Additional resources:

State Sales Tax Exemption

Washingtonians don’t have to pay the state’s 6.5% sales tax on solar systems up to 100 kilowatts (kW), nor on the labor required to install them. A 50% tax exemption is available for systems between 101 and 500 kW.

To qualify, your installer must have the following:

Your solar installation company should provide you with a tax exemption certificate upon purchase.

Additional resources:

Net-Metering

Net-metering is a rebate incentive program that can help system owners earn money while saving on their energy bills. Through a net-metering program, you can sell any excess energy your system generates to your local utility company. That means that if your system generates more electricity than you need to power your home, utility companies will pay you to send it back to the electric grid.

Three Washington utility companies—Avista Corporation, Pacific Power & Light Corporation, and Puget Sound Energy—have net-metering programs.

Additional resources:

 


 

Federal Tax Credit

One of the biggest ways to save on solar panels is to take advantage of the federal solar investment tax credit (ITC), also referred to as the residential clean energy credit. This is a nationwide program that originated with the Energy Policy Act of 2005. It allows you to claim a percentage of your solar energy system’s cost on your federal tax bill the year you install it.

This percentage has changed throughout the years, but it’s now set at 30% until 2033. With the average home solar system cost in Washington being $15,400, that’s around $4,600 you can claim on your taxes. Only homeowners who purchase their system in cash or take out a loan qualify. Leasing and power purchase agreement (PPA) customers are ineligible because they don’t legally own their systems.

The ITC is a one-time credit, but you can carry it over to the next tax year if you can’t use it all when you file. For example, if you owe $3,000 in taxes the year you install and get a $4,000 tax credit, you’ll owe $0 on that year’s federal tax bill and reduce the next year’s by the leftover $1,000.

You can claim the solar tax credit when you file your yearly federal tax return. Let your accountant know in advance. If you manage your taxes yourself, you’ll need to fill out IRS Form 5695.

 


 

Washington Solar Costs

The average cost of solar panels in Washington is $3.08 per watt. The average residential system size for the state is 5 kilowatts, making the average gross system price $15,400. See typical pricing for other system sizes in Washington below.

System SizeSystem CostSystem Cost After ITC

4 kW

$12,320

$9,117

6 kW

$18,480

$13,675

8 kW

$24,640

$18,234

10 kW

$30,800

$22,792

 


 

Is Going Solar in Washington Worth the Investment?

According to EnergySage, the average cost of a solar panel installation in the United States ranges from $17,430 to $23,870 after the federal tax credit, making Washington’s system cost among the lowest in the country. Lower product and labor pricing plus state incentives put residents at a good advantage to invest in a solar energy source. Not only will you save on your system, you’ll soon start saving on your electricity bill.

 


 

Our Recommendation

Between the state solar incentives, financial savings, and environmental benefits, going solar in Washington has many upsides. If you decide to purchase a solar panel system, we recommend SunPower, Blue Raven Solar, and Tesla Solar. These top-rated solar companies are available in Washington State and are known for quality panel performance, competitive pricing, and reputable customer service. The solar company you choose can help you better understand and apply for solar incentives.

Homeowners Save $20,000 to $97,000 with Solar Panels on Average Over Typical System Life Span
Get a Quote on Your Solar Installation in 30 Seconds

  


 

How We Chose the Top Solar Companies

We researched and analyzed dozens of solar panels and solar installation companies. We then formulated a rating system based on each solar installer or manufacturer’s services and products. We weighed several significant factors, including the quality and type of solar panels offered, the customer support network, warranty lengths and limitations, and additional benefits such as mobile apps for monitoring and customer service.

Speaking directly to representatives, we determined how each solar company personalizes its solar panel installation for each home. We also analyzed each company’s warranty options to ensure their product and performance guarantees match or exceed industry standards.

We evaluated each provider based on their rating and history with the Better Business Bureau (BBB) to determine reputation. In addition, we analyzed the 100 most recent Google Reviews for each provider across various locations and branches.

Read more: Our Methodology