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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
| Incentive | Where It Comes From | What 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:
- A description of the property subject to the solar easement and a description of the property benefiting from the solar easement
- Height restrictions placed on structures and vegetation that impair the passage of sunlight onto the adjoining property
- The terms for revisions to the easement and conditions for termination
- An explanation of the compensation for the owner of the property subject to the solar easement for maintaining the easement and for the owner of the property benefiting from the solar easement in the event of interference with the easement
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:
- A current state unified business identifier number (UBI)
- Registration with the Department of Labor & Industries
- Proof of industrial insurance coverage for its employees
- An Employment Security Department number
- A state excise tax registration number
- No final and binding orders that violate federal or state wage and hour laws in the past two years
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 Size | System Cost | System 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.
Washington Solar Incentives FAQ
Does Washington State have solar incentives?
Yes, Washington State has solar incentives. The state of Washington has solar easement regulations, a sales tax exemption, and net-metering programs to help residents simplify installing solar energy and save money on solar equipment. Those who own their solar panel system also qualify for the federal state tax credit.
What are the solar incentives for 2023 in Washington State?
Washington residents enjoy waived sales tax when purchasing a solar panel system as well as net energy metering programs that allow them to sell their solar array’s excess electricity to their local utility company. Those who purchase their system outright or through a solar loan also qualify for the federal tax credit that lets buyers claim 30% of the total system cost on their income taxes the year of installation.
How much is the solar rebate in Washington?
The amount of a solar rebate in Washington depends on your system size and the amount of electricity generated.
Is it worth it to get solar panels in Washington State?
Yes, solar projects are worth it in Washington despite the Pacific Northwest’s reputation for rainy weather. The average system cost in Washington is considerably less than the national average, and there are multiple solar incentives that help you save more money on switching to renewable energy. Once your renewable energy system is installed, you’ll then start saving on your electricity bill and increasing your home’s energy efficiency.
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