Washington D.C. solar rebates and incentives: 2024 guide

The average D.C. solar shopper will save $4,640 on solar panels with rebates and incentives.

Updated May 7, 2024

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    Written by: Liam McCabe

    Did you know that President Jimmy Carter had solar panels installed on the roof of the White House back in the 1970s? Whether you live in Georgetown or Eastern Market, Columbia Heights or Navy Yard, thanks to D.C.’s solar incentives you too can feel like you live at 1600 Pennsylvania Avenue.

    Between the federal tax credit and other DC-specific incentives, you can save thousands on solar panels, making them well worth it. Here's how you can lower the cost of solar in the nation’s capital.

    See how much solar costs in Washington DC

    If you're considering going solar in DC, we have good news: Some great incentives can substantially improve your return on investing in solar panels. The three below are some of the most impactful incentives for Washington D.C. homeowners.

    Incentive
    Average savings in D.C.
    Description

    Residential Clean Energy Tax Credit (formerly known as ITC)

    $4,640

    Lowers your solar panel system's cost by 30%

    Solar Renewable Energy Certificates (SRECs)

    $2,400 per year

    Cash payments for producing solar power

    Solar For All

    $10,000

    Free rooftop solar for low income households

    Residential Clean Energy Credit

    The Residential Clean Energy Credit, formerly known as the federal investment tax credit (ITC), can reduce your solar panel system's cost by 30%. Your entire system, including all the equipment, labor, permitting, and sales tax, qualifies for this tax credit. 

    In Washington D.C., the average cost for a 5 kW solar panel system is around $15,466. Once you factor in the 30% credit, the cost of a solar panel system in D.C. comes down to $10,826.

    When you file your taxes, you can claim this incentive as a credit towards your federal tax bill. Just keep in mind that to qualify for the ITC, you need to purchase your system either with cash or a solar loan–if you lease your system, you won't be eligible. 

    You also need a high enough tax bill, though you can roll over any remaining credit year-to-year until the end of 2034 when the ITC expires. The only time you might be eligible for a direct payment for the ITC is if you're a tax-exempt entity, like a nonprofit organization.

    Solar Renewable Energy Certificates (SRECs)

    D.C. set a goal to produce 10% percent of its annual electricity from solar by 2041—and you can get paid to help. Under this program, you are granted one D.C. SREC for each megawatt-hour (MWh) of clean electricity your panels produce, which you can then sell in the SREC market. Most solar owners use a broker to handle the confusing part—selling the SRECs to the utility companies. The broker would pay you directly for the SRECs.

    As of 2024, each D.C. SREC can sell for up to $400, and the actual price tends to hover right around that level. (That makes them some of the most valuable SRECs in the country!) So a 5 kilowatt system that generates about 6 MWh annually would earn an extra $2,400 each year.

    Solar for All

    Free solar panels are largely a myth—but a program for low-income homeowners in D.C. is one of the few exceptions. Solar for All, administered by the D.C. Sustainable Energy Utility, will actually put solar on the roofs of qualified homes at no charge, and the homeowners get the full benefit of the savings from utility bills. 

    Program details for 2024 are still being ironed out at the time of writing. But in previous years the program has covered the full cost of a rooftop solar system up to $10,000. The utility company claims that the free systems “have the potential to offset electricity costs by as much as $500 per year.” To qualify, homeowners need to receive assistance from a government program like SNAP or SSI, or have a household income below 80% of the local average (AGI).

    Yes, in addition to the rebates and incentives above, D.C. also offers a solar property tax exemption. Rooftop solar tends to raise property values, which would normally increase your property tax burden. But by D.C. law, homeowners are not taxed on any property value added by solar. Currently, there is no expiration date on the books for this policy.

    Tax exemption
    Description

    Washington D.C. solar property tax exemption

    Exempt from paying property taxes on the value added by solar panels. The typical property tax in D.C. is 0.55%

    If you connect your solar panel system to the grid, you can benefit from net metering—which is really the ultimate incentive for rooftop solar. 

    Under net metering, the sun doesn’t need to shine all the time to get massive value from your solar panels. Your utility company (PEPCO in D.C.) essentially works like a bank account for all the energy your solar panels produce in a given month.

    When the sun shines, your home’s electrical system first takes as much power as it needs from the solar panels. If the panels make any excess energy, it gets sent back onto the grid, and PEPCO credits that excess to your energy bill. 

    When the sun isn’t shining and you need grid electricity to power your home, PEPCO just starts drawing against your credits. You won’t pay for electricity until those credits run out.

    There are a few nuances here: 

    • PEPCO gives you credits in kWh, not in dollars. That means you can only apply the credits to your actual energy usage. You’ll still have to pay for the fixed rates on your bill each month (roughly $18 per month as of early 2024). 

    • Credits roll over from month to month, but expire at the end of a calendar year. However, PEPCO does pay out most of the cash value for unused credits (or at least the majority of it). For example: If at the end of 2024 you have 800 kWh of credits that you accrued during the sunny parts of the year, but haven’t used up in the early parts of the winter, PEPCO will send you a check for about $70. That’s equal to 800 kWh multiplied by the generation cost for each kWh, which is about 8.8 cents as of early 2024. PEPCO does not pay out for the cost of transmission per kWh (about 1.3 cents each), so each credit is slightly less valuable when paid out as cash.

    No, D.C. doesn't offer any specific battery incentives. Solar batteries won’t make much financial sense for D.C. homeowners anyway, since PEPCO’s net metering rules are already very favorable, and they currently do not offer a residential virtual power plant program.

    However, if you’re interested in a battery as a backup power source for your home, all batteries above 3 kWh in size are eligible for the 30% federal tax credit.

    Learn more about battery incentives and rebates See the complete list of solar companies in Washington D.C.

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