Washington solar incentives, tax credits and rebates
Resources to make solar panels more affordable in 2024
In addition to the federal solar tax credit, subsidized low-interest loans and feed-in tariffs can help make solar more affordable for Washington residents. There’s also no sales tax on solar panel systems up to 100 kilowatts.
Here’s everything you need to know about how state and federal solar incentives can make installing panels more affordable in the Evergreen State.
In Washington, a typical residential solar panel system costs $9,380 to $26,800, depending on the size of your system and what financial incentives you qualify for.
Jump to insightThe federal solar investment tax credit (ITC) is the best financial incentive for most Washington homeowners to buy solar panels.
Jump to insightWashington residents can get the retail rate when they sell excess solar power to the local grid.
Jump to insightSolar tax breaks in Washington
The federal solar investment tax credit (ITC) is the most significant financial incentive for most homeowners buying solar panels in Washington. However, it’s only helpful if you owe federal taxes in the first place.
- Federal tax credit: The ITC reduces your federal tax liability by 30% of how much it costs you to go solar. 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.
- Sales and use tax exemption: Washington State offers a tax break on renewable energy systems. You can get back 50% to 100% of sales taxes paid on equipment and installation for solar, wind and other clean energy sources. This applies to systems of 1 kilowatt or more installed between 2020 and 2029.
WSHFC Sustainable Energy Program
The Washington State Housing Finance Commission's (WSHFC) Sustainable Energy Trust (SET) provides low-interest loans for energy efficiency or renewable energy projects. The SET loans are available statewide for three types of projects:
- New construction of high-efficiency single-family homes: Eligible projects must exceed the Washington State Energy Code by at least 12%. Loans are available to housing developers but not to individuals building their own homes.
- Energy and water efficiency upgrades for multifamily housing and nonprofit facilities: Projects must reduce utility consumption by at least 10% for existing buildings. Loans are structured so that payments are less than utility savings, resulting in immediate financial savings. Interest rates are typically between 2% and 4%.
- Clean Energy: Eligible projects include wind, solar, biodigesters, biomass, combined heat and power or other clean energy technologies. Loans are available to homeowners and developers, with the exception of single-family homeowners. Interest rates are typically between 2% and 5%.
The incentive offers financing of up to $1 million at favorable interest rates, with a preferred minimum loan of $50,000. The maximum term is 10 years. Other requirements vary based on the project type but generally involve meeting energy efficiency or renewable energy thresholds. The SET loan program does not have an expiration date.
Solar for All program
Washington plans to make solar energy more accessible to low-income residents and underserved communities. New programs will help:
- Single-family homeowners
- Affordable housing buildings
- Tribal communities (designed with their input)
These efforts aim to ensure low-income households, especially in environmentally disadvantaged areas, benefit from solar energy, which aligns with state and federal environmental justice goals.
Additional solar incentives in Washington
Check DSIRE for the most comprehensive source of information about solar incentives and policies in Washington.
| Incentive type | Amount | Eligible solar equipment | Applicable sectors | Administrator | |
|---|---|---|---|---|---|
| Tax Abatement for Solar Manufacturers | Industry recruitment/support | State business and occupation tax reduced by 43% | Solar photovoltaics | Industrial | Washington State Department of Revenue |
| Renewable Energy Sales and Use Tax Exemption | Sales tax incentive | 100% exemption for solar systems less than 100 kW | Solar water heat, solar photovoltaics | Commercial, residential | Washington State Department of Revenue |
| Evergreen Sustainable Development Standard for Affordable Housing | Green building incentive | Varies | Solar water heat, solar photovoltaics | Construction, local government, residential, state government, installers/contractors, multifamily residential, integrators | Washington Department of Commerce |
| WSHFC Sustainable Energy Program | Loan program | $1 million maximum | Solar photovoltaic | Construction, local government, nonprofit, state government, installers/contractors, agricultural | Washington State Housing Finance Commission |
| Renewable Energy Manufacturing Program | Industry recruitment/support | Minimum loan $2 million, interest rate subsidy of 80% | Solar thermal electric, solar photovoltaics | Industrial | Washington Economic Development Finance Authority and Department of Commerce |
| Energy Efficiency and Solar Grants | Grant program | Varies | Solar photovoltaics | Local government, schools, state government, tribal government | Washington State Department of Commerce |
What to know about net metering in Washington
Net metering lets you sell any excess electricity your solar panels generate to the local power grid. In Washington, you’re compensated with credits on your electricity bill. Each credit is typically valued at the full retail rate, which means you get the same value for the excess electricity as you would pay for electricity from the utility company. Credits roll over each month until March 31.
Statewide net metering policies allow grid-tied solar energy system owners to receive credits for excess energy at the utility's retail rate. The program is open to new participants through at least Dec. 31, 2025. As for how long it takes to get set up, Daniel in Auburn said that “the timeline from initial order to completed install and utility interconnect was about three months.”
» GREENEST STATES: Washington ranked No. 2 in 2024
How much are solar panels in Washington?
After considering the federal solar tax credit, solar panel costs in Washington typically range from $9,380 to $18,760.
Your system size greatly affects how much you pay overall. The typical system size for solar systems in Washington is 12.3 kW (kilowatts). You might need a larger or smaller system, depending on your average household energy usage.
Average solar cost by system size in Washington
| 5 kW | 6 kW | 7 kW | 8 kW | 9 kW | 10 kW | |
|---|---|---|---|---|---|---|
| Before federal tax credit | $13,400 | $16,080 | $18,760 | $21,440 | $24,120 | $26,800 |
| After federal tax credit | $9,380 | $11,256 | $13,132 | $15,008 | $16,884 | $18,760 |
Solar resources in Washington
Below are some additional resources to help you go solar in Washington.
Find solar companies in Washington
A good solar company helps you navigate local incentives, permitting and net metering policies. Compare our picks for Washington’s top solar companies to learn more.
| Companies | Customer rating | Pro install | Payment options | Year founded |
|---|---|---|---|---|
| Blue Raven Solar | 4.7 | Cash, loan, lease, PPA | 2014 | |
| ION Solar | 4.4 | Cash, loan | 2013 | |
| ShopSolar | 4.7 | Cash, loan | 2018 |
FAQ
Is my HOA allowed to restrict solar panels?
Homeowners associations (HOAs) in Washington are not legally permitted to prevent the installation of solar panels as long as certain conditions are met.
Can I get free solar panels in Washington?
There are no programs for free solar panels that we’re aware of in Washington. You can lease or enter a PPA with little to no upfront costs, though.
» FREE SOLAR PANELS: Are they really free?
How can I pay for solar panels?
You can pay cash, but most people 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). Leasing or entering a power purchase agreement (PPA) is often cheaper upfront, but you won’t be eligible for the federal solar tax credit and other financial incentives.
» SOLAR PANELS: Lease vs. buy
How much can I save with solar panels in Washington?
On average, Washington homeowners with solar panels avoid $59,116 in utility costs over 25 years. Even if you don’t generate 100% of your energy needs, you can still save a lot of money versus paying traditional utility bills. In Washington, solar panels usually pay for themselves within 13 years.
» EXPLORE: Where your solar savings go the furthest
How do I know if my house is a good candidate for solar?
For optimal sun exposure, it’s best to have plenty of unshaded roof space facing south or west. 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.
It’s also smart to upgrade any old, inefficient appliances first. Reducing your electrical loads now means you can get a smaller, cheaper system.
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 again. This will cost around $5,000 for a 19-panel setup.
What has Washington’s investment in solar been so far?
Total solar investments in the state amount to $1.7 billion, according to the Solar Energy Industries Association.
Bottom line
Although there aren’t as many incentives as some other states, appealing tax breaks, low-interest loans and other initiatives make going solar worthwhile for many Washington homeowners.
The ConsumerAffairs Research Team conducted an in-depth analysis to determine the average costs of going solar and incentives in other states. Turns out, it’s worth it for many homeowners, particularly in Washington.
Solar costs vs. savings: Washington and 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 cost savings** | |
|---|---|---|---|---|---|
| Idaho | $16,140 | $26,900 | 10.76 kW | $2.69 | $71,010 |
| Oregon | $15,900 | $26,500 | 10.93 kW | $2.65 | $52,903 |
| Washington | $16,080 | $26,800 | 12.3 kW | $2.68 | $59,116 |
Article sources
- DSIRE, "Washington Programs". Accessed March 29, 2024.
- EnergySage, "“The cost of solar panels in Washington". Accessed March 29, 2024.
- Solar Energy Industries Association (SEIA), "Washington Solar." Accessed March 29, 2024.
- SolarReviews, "How much do solar panels cost in Washington?" Accessed March 29, 2024.
- Washington State Housing Finance Commission, “Sustainable Energy Trust.” Accessed Aug. 14, 2024.
- WSU Energy Program, “Renewable Energy System Incentive Program.” Accessed Aug. 14, 2024.
- Washington State Department of Commerce, “Evergreen Sustainable Development Standard.” Accessed Aug. 14, 2024.
- Washington State Legislature, “Governing documents—Solar panels.” Accessed Sept. 14, 2024.
- Washington Utilities and Transportation Commission, “Net Metering.” Accessed Sept. 14, 2024.
