Washington solar rebates and incentives: 2024 guide

The average Washington solar shopper will save $4,257 on solar panels with rebates and incentives.

Updated May 7, 2024

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    Written by: Liam McCabe

    Washington state may not be the sunniest part of the world—at least not around Seattle. But with so many all-electric homes and favorable state policies, solar power can pay off in a big way for homeowners, especially after the thousands of dollars in savings you can expect from incentives and rebates. Here's how you can lower the cost of solar if you live in Washington.

    See how much solar costs in Washington.

    The single biggest solar incentive in Washington is actually a federal tax credit. 

    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 qualifies for this incentive, including equipment, labor, permitting, and sales tax. 

    Incentive
    Average savings in Washington
    Description

    Residential Clean Energy Tax Credit, formerly the federal investment tax credit (ITC)

    $4,257

    Lowers your solar panel system's cost by 30%

    The average cost for a 5 kW solar panel system is around $14,190 in Washington. Once you factor in the 30% credit, the cost comes down to $9,933.

    When you file your federal income 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. 

    What about other solar incentives in Washington state? 

    There are some local- or utility-level incentives around Washington, though they’re mostly low-interest loans or low-income assistance programs, rather than straight tax credits or cash rebates. A simple search for your town or utility company name, plus “solar power incentives,” will be the fastest way to figure out what’s available in your area.

    In addition to the incentives above, Washington also offers a solar sales tax exemption for your solar array’s equipment costs. Your contractors simply won’t be charged the typical 6.5% state sales tax for the panels, inverters, and other materials, and ideally they’ll pass those savings along to you.

    Tax exemption
    Description

    Washington solar sales tax exemption

    You don't need to pay any sales tax on new solar panel systems in Washington, saving 6.5% of your system equipment costs.

    If you connect your solar panel system to the grid in Washington, you can benefit from net metering—which is really the ultimate incentive for rooftop solar, even more than big rebates and tax credits. 

    Under net metering, the sun doesn’t need to shine all the time to get massive value from your solar panels. Your electric utility company 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 your utility company gives you full credit for all of it on your energy bill. The credits roll over from month to month.

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

    A few nuances to keep in mind:

    • Your bill credits reset on March 31 of each year. That is, if you haven’t used up your bank of credits by that date, you surrender them completely with no payout. Not ideal, but as far as the least-worst “true up” expiration dates go, March 31 is it. By this point at the end of winter, you’ll likely have burned through any excess banked credits from the previous summer, and should be just getting to the part of the year where you’re generating enough energy per month to cover your current usage.  

    • Grays Harbor utility has slightly different (and less favorable) metering rules than the rest of the state’s electric companies, according to DSIRE. 

    No, Washington doesn't offer any state-specific battery incentives. Solar batteries don’t make much financial sense for Washington homeowners anyway, because the net metering policy is so consumer friendly that you don’t really benefit from hoarding your solar power. 

    Few utility companies in Washington currently offer a virtual power plant program for homeowners, either—though Puget Sound Energy recently launched one. It’s an opportunity for solar battery owners to make a little money on the side.

    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

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