Solar Incentives in Washington
Washington homeowners installing solar in 2026 have access to several active state-level incentives. The most broadly applicable is a sales and use tax exemption administered by the Washington State Department of Revenue, which covers 100% of state and local retail sales and use tax on qualifying solar equipment and installation labor for systems between 1 kW and 100 kW AC, provided equipment is purchased before December 31, 2029. Washington law also requires all electric utilities — investor-owned, public utility districts, cooperatives, and municipal utilities — to offer net metering for customer systems up to 100 kW AC, with excess generation credited kilowatt-hour for kilowatt-hour on subsequent bills; credits zero out each March 31, and rates vary by utility. A Low-Income Community Solar Incentive program, running through June 30, 2033, provides one-time payments of up to 100% of proportional installed costs for qualifying community solar subscribers, plus up to $20,000 per project for additional qualifying costs. The Washington State Housing Finance Commission also offers Sustainable Energy Trust loans of up to $1 million at below-market rates with terms up to 10–15 years, subject to underwriting.
The federal residential Clean Energy Credit under §25D — commonly referenced as the 30% credit — expired for systems placed in service after December 31, 2025, under the One Big Beautiful Budget Act (Pub. L. 119-21). Homeowners proceeding with a new residential installation in 2026 do not qualify for that federal credit, which meaningfully lengthens payback periods compared to prior years.
Washington's residential electricity rate averaged approximately 14.40 cents per kilowatt-hour as of March 2026, an increase of about 1.78 cents year-on-year. At that rate, solar generation offsets real ongoing costs, but without the federal credit, the economics depend more heavily on the state sales-tax exemption and net-metering credits, both of which vary in value depending on system size, utility, and individual usage.
Figures here are verified as of June 2026 against official sources; programs and utility rate structures change with each legislative session and rate case, and the Washington State Department of Revenue, Washington Utilities and Transportation Commission, and Washington State Housing Finance Commission are the authoritative sources for current program details.
Federal credit update. The federal residential Clean Energy Credit (the 30% “solar tax credit” under §25D) expired for systems placed in service after December 31, 2025. New 2026 residential installs do not qualify; a 2025 install can still be claimed on a 2025 return (IRS Form 5695). What this means for 2026 →
Current solar incentives in Washington
Solar Energy System Sales and Use Tax Exemption
Washington exempts from retail sales tax purchases of machinery and equipment used directly in a solar energy system capable of generating at least 1 kW but no more than 100 kW AC, along with qualifying installation labor. Equipment must be purchased between July 1, 2019 and December 31, 2029, and installation must be completed by December 31, 2029; the installer must be an L&I-registered contractor meeting state licensing, insurance, and wage-law requirements. Buyers claim the exemption at the point of sale with a Buyers' Retail Sales Tax Exemption Certificate, or apply to the Department of Revenue for a refund if tax was charged.
| Amount | 100% exemption from state and local retail sales/use tax on qualifying solar equipment and installation services. Expires January 1, 2030. |
|---|---|
| Who qualifies | Buyers of solar energy systems of 1-100 kW AC installed in Washington by a qualifying registered contractor; purchases July 1, 2019 - December 31, 2029. |
| Administered by | Washington State Department of Revenue |
Source: RCW 82.08.962 / RCW 82.12.962; DOR tax incentive programs page Official source →
Washington Net Metering
Washington law requires electric utilities — including investor-owned utilities, PUDs, co-ops, irrigation and port districts, and municipal utilities — to offer net metering for customer renewable energy systems of up to 100 kW AC located on the customer's premises. Excess kWh generated in a billing period are credited on the following bill; on March 31 of each year any unused credits from the previous year are granted to the utility without compensation. Customers may aggregate the designated meter with one additional meter on the same or a contiguous parcel, and multifamily building owners may net meter a building system on a single designated meter and share the benefit with tenants.
| Amount | kWh-for-kWh bill credits for excess generation, carried to subsequent bills; remaining credits zero out each March 31 with no compensation. |
|---|---|
| Who qualifies | Retail customers of any Washington electric utility with a renewable energy (or fuel cell/CHP) system up to 100 kW AC on their premises, interconnected and operating in parallel with the utility. |
| Administered by | Washington Utilities and Transportation Commission (investor-owned utilities); governing boards of consumer-owned utilities |
Source: RCW 80.60.030; RCW 80.60.010 (definitions) Official source →
Low-Income Community Solar Incentive (Community Solar Expansion Program)
From July 1, 2022 through June 30, 2033, administrators of qualifying community solar projects may apply to the Washington State University Extension Energy Program for precertification and, once certified, receive a one-time low-income community solar incentive payment from the serving utility. The payment covers up to 100% of the installed cost of the project share that provides direct benefits to qualifying low-income subscribers (net of federal credits and other grants), plus up to $20,000 in start-up administrative costs. Ongoing generation compensation must be passed through to subscribers as direct benefits for at least 10 years, with WSU reviewing any administrative deductions.
| Amount | One-time payment of up to 100% of the proportional installed cost serving qualifying subscribers, plus up to $20,000 per project for administrative start-up; utility participation is structured under RCW 82.16.170(3) and related sections. |
|---|---|
| Who qualifies | Community solar project administrators serving qualifying (low-income or low-income service provider) subscribers in participating utility territories; project precertification application window July 1, 2022 - June 30, 2033; statute expires June 30, 2038. |
| Administered by | Washington State University Extension Energy Program |
Source: RCW 82.16.183; RCW 82.16.170 Official source →
WSHFC Sustainable Energy Trust (SET) Financing
The Washington State Housing Finance Commission's Sustainable Energy Trust provides low-interest loans of up to $1 million for energy-efficiency and clean energy projects, and solar is the most common project type it finances. Loan terms run up to 10-15 years at favorable rates, with third-party verification of projected energy savings required. Eligible borrowers are business owners, multifamily housing property owners, nonprofit facility owners, and housing developers; single-family homeowners are not eligible for SET (the Commission's separate Energy Spark Home Loan serves efficient-home buyers).
| Amount | Loans up to $1,000,000; terms up to 10-15 years at below-market interest rates; all lending subject to underwriting. |
|---|---|
| Who qualifies | Washington business owners, multifamily housing owners, nonprofit facility owners, and housing developers; single-family homeowners are ineligible. |
| Administered by | Washington State Housing Finance Commission |
Source: WSHFC program page Official source →
Solar Canopy Sales and Use Tax Deferral
Washington offers a sales and use tax deferral for construction of large solar canopies (at least 50,000 square feet and at least 1 MW AC) placed over commercial parking lots at qualifying commercial centers. Applications must be submitted to the Department of Revenue before construction begins and are accepted through June 30, 2032, with Clean Energy Labor Standards certification from L&I required. Deferred taxes are repaid over eight years, but projects can earn a 50%, 75%, or 100% reduction of the deferred state sales/use tax by meeting escalating labor standards up to a community workforce or project labor agreement.
| Amount | Deferral of state and local sales/use tax on construction; 12.5% of deferred tax repaid annually over 8 years, with 50-100% reduction of state deferred taxes available based on certified labor standards. |
|---|---|
| Who qualifies | Persons constructing solar canopies of at least 50,000 sq ft and at least 1 MW AC on large commercial parking lots at qualifying commercial centers; application before construction; no applications after June 30, 2032. |
| Administered by | Washington State Department of Revenue (with Department of Labor & Industries certification) |
Source: Chapter 82.90 RCW; ESSB 5714 (2022); DOR tax incentive programs page Official source →
Compare solar incentives across all states → · Check what applies to you →
Programs verified as of June 2026 against official state and federal sources (each cited above); refreshed quarterly as legislatures and utility rate cases change the rules. How we verify this data. This page is informational only — not tax or legal advice.