Washington, D.C., solar incentives, tax credits and rebates
Financial resources for DCers in 2025
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There’s no way around it: Installing solar panels is expensive. In Washington, D.C., a typical 9-kilowatt residential system costs $27,540 before any financial incentives. That price drops to $19,278 after considering the federal solar tax credit.
The District of Columbia Sustainable Energy Utility has a no-cost rooftop solar program for income-qualified households. The newly funded Solar for All program is supposed to make solar accessible to 100,000 low- to moderate-income households in the future. You can also take advantage of additional incentives, including a property tax exemption, to maximize your solar savings.
The federal solar investment tax credit (ITC) is the most significant solar incentive in Washington, D.C. Tax credits offset your tax liability, so it’s only useful if you owe federal income taxes in the first place.
Jump to insightLeasing solar equipment is often cheaper upfront, but you won’t be eligible for the federal solar tax credit and other financial incentives.
Jump to insightWashington, D.C., homeowners may also take advantage of additional solar incentives, Solar Renewable Energy Credits (SRECs).
Jump to insightResidential solar panel incentives in Washington, D.C.
For a lot of homeowners, the federal solar investment tax credit (ITC) is the best way to save money when going solar in Washington. It reduces your federal tax liability by 30% of how much it costs to install solar panels. This is different from a deduction, which lowers your taxable income. ITC is a credit, meaning it directly decreases the amount of taxes you owe.
The ITC drops to 26% in 2033 and then 22% in 2034.
For example, if you spend $10,000 installing a solar panel system, the ITC is worth $3,000. If in the year your system becomes operational, you owe $15,000 in taxes, the ITC reduces what you owe to $12,000.
Tax credits offset your tax liability, so it’s only useful if you owe federal income taxes in the first place. However, the credit rolls over to the next tax year if you don’t use the full amount. You don’t get these benefits automatically, though. You must claim your solar equipment, labor and permits on your federal taxes for the same year you started using your system on Form 5695.
Solar Renewable Energy Credits (SRECs)
Every time your solar panels generate 1 megawatt-hour (MWh) of electricity, you earn one SREC (1 MWh = 1,000 kilowatt-hours).
You can sell SRECs through brokers or online marketplaces that handle the transactions. Some solar installers might also assist with SREC sales. The value of SRECs fluctuates based on market demand. Historically, Washington has had some of the highest SREC prices in the U.S., making it a very attractive incentive for solar homeowners.
More solar incentives in Washington, D.C.
Check the DSIRE for the most comprehensive source of information about solar incentives and policies in Washington.
| Incentive type | Amount | Eligible solar equipment | Applicable sectors | Administrator | |
|---|---|---|---|---|---|
| Energy Conservation Subsidy Exclusion | Corporate tax exemption | 100% of energy conservation subsidies provided by public utilities | Solar panels, solar water heat, solar space heat | Residential, multifamily residential | United States Internal Revenue Service |
| Residential Energy Conservation Subsidy Exclusion | Personal tax exemption | 100% of energy conservation subsidies provided by public utilities | Solar panels, solar water heat, solar space heat | Residential, multifamily residential | United States Internal Revenue Service |
| Energy Efficient Mortgages | Loan program | Up to 100% of improvement costs | Solar panels, passive solar, solar water heat, solar space heat | Residential | Federal Housing Administration |
| Energy Efficient Mortgages | Loan program | $3,000-$6,000 | Solar panels, passive solar, solar water heat, solar space heat | Residential | Veterans Administration |
How much are solar panels in Washington, D.C?
Before considering the federal solar tax credit, solar panel costs in Washington, D.C., typically range from $10,710 to $30,600.
Your system size greatly affects how much you pay overall. The typical system size for solar systems in Washington is 9.3 kW (kilowatts).
If you don’t want to connect to the grid, the alternative is to store energy in a battery. That way, you can still turn your lights on when panels aren’t generating electricity. A solar storage battery can cost almost as much as the panels — $7,000 to $18,000.
Average solar cost by system size in Washington, D.C.,
| 5 kW | 6 kW | 7 kW | 8 kW | 9 kW | 10 kW | |
|---|---|---|---|---|---|---|
| Before federal tax credit | $15,300 | $18,360 | $21,420 | $24,480 | $27,540 | $30,600 |
| After federal tax credit | $10,710 | $12,852 | $14,994 | $17,136 | $19,278 | $21,420 |
Solar resources in Washington, D.C.
The Department of Energy & Environment keeps a list of renewable energy service providers. Below are some additional resources to guide you through transitioning to solar in Washington, D.C.
Find solar companies in Washington, D.C.
A good solar company helps you navigate local incentives, permitting and net metering policies. Compare our choices for the top solar companies in Washington to learn more.
| Company | Customer rating | Pro install | Payment options | Year founded | |
|---|---|---|---|---|---|
 | 4.6 |  | Cash, loan | 2007 | Get Started |
 | 4.4 | | Cash, loan | 2013 | Learn More |
 | 4.5 |  | Varies | 2012 | Learn more |
 | 4.7 | | Cash, loan | 2018 | Learn more |
FAQ
How does net metering work in Washington, D.C.?
Net metering is a system of give-and-take between you and your utility company. It lets you access power from the grid when your panels don’t generate enough electricity. Net metering also lets you earn credits for sending any excess solar energy to the grid. These credits can offset the cost of electricity consumed at other times. Pepco, the main utility company in Washington, offers a net metering program with full retail rate credits.
How do I know if my house is a good candidate for solar?
It’s best to have plenty of unshaded roof space that faces south or west for optimal sun exposure. It’s also smart to upgrade any old, inefficient appliances first. Reducing your electrical loads now means you can get a smaller system, which will be cheaper.
The condition of your roof matters too — if it needs replacement soon, do that before installing solar panels. Installing solar panels on an old roof might mean you have to remove the panels, replace your roof and then reinstall the panels. This will cost around $5,000 for a 19-panel setup.
Solar photovoltaic (PV) technologies, more commonly known as solar panels, absorb sunlight and convert it into usable electricity. If you have a lot of shading around your house, they might not get enough sun to power your home.
How much can I save with solar panels in Washington, D.C?
Over 25 years, Washington homeowners with solar panels avoid $63,114 in utility costs on average. Your current electric bill is the starting point for assessing the financial benefits of transitioning to solar energy. Knowing your average energy consumption helps determine the size and capacity of the solar system you need. Once you know this, you can figure out potential savings and how long it should take for your solar installation to pay for itself.
How can I pay for solar panels?
Paying upfront is the most obvious way to pay for solar panels, but many don’t have that kind of money saved up. If you’re one of those people, you can finance solar panels with a solar loan. It works a lot like any other type of loan — there’s an application and approval process, and you pay it back over time (with interest).
» SOLAR PANELS: Lease vs. buy
Bottom line
ConsumerAffairs Research Team conducted an in-depth analysis to determine the average costs of going solar. Turns out, it’s worth it for many homeowners, particularly in Washington. Buying solar panels is a big upfront investment, but the city’s local and the federal incentives can help make it a lot cheaper.
Solar costs and savings: Washington, D.C., vs. nearby states
| 6-kW system cost (before incentives) | 10-kW system cost (before incentives) | Typical system size needed* | Average cost per watt | Total utility power costs savings** | |
|---|---|---|---|---|---|
| Washington, D.C. | $18,360 | $30,600 | 9.3 kW | $3.06 | $63,114 |
| Virginia | $17,220 | $28,700 | 10.95 kW | $2.87 | $60,802 |
| Maryland | $16,800 | $28,000 | 10.18 kW | $2.80 | $64,703 |
Article sources
ConsumerAffairs writers primarily rely on government data, industry experts and original research from other reputable publications to inform their work. Specific sources for this article include:
- EnergySage, "The cost of solar panels in Washington, D.C." Accessed Dec. 3, 2024.
- SolarReviews, "How much do solar panels cost in Washington, 2024." Accessed Dec. 3, 2024.
- Solar Energy Industries Association, "Washington, D.C. Solar." Accessed Dec. 3, 2024.
- DSIRE, "Washington, D.C. Programs." Accessed Dec. 3, 2024.
