Washington State Solar Incentives: Tax Credits & Rebates Guide (2022)

By Jacob L.

Not only is Washington State home to some of the most beautiful landscapes in the country, but it also has some of the most generous solar incentives and rebates for property owners anywhere in the world. With energy bills creeping upward for years now across the United States, and especially in Washington, you should consider taking hold of your finances by investing in a renewable energy system for your home. With solar power, in particular, you can generate large amounts of electricity and save yourself thousands of dollars per year in utility bills.

There has never been a better time to buy a new solar energy system in Washington State. With federal, state, and local incentives available to purchasers of solar panels, you can ensure savings on your immediate installation costs in addition to savings for years to come. Keep reading to learn all about how your purchase and installation of solar panels in Washington State can be made more financially accessible.

Why Go Solar in Washington State?

In recent years, solar energy production has taken off across the Pacific Northwest in states like Oregon and Washington. While it used to be somewhat common to see solar panels in sunny parts of the country, it is now becoming increasingly common to see solar panels lining the roofs of homes up north.

While Washington State isn’t as far north as, say, Alaska, it still receives 165 sunny days per year, which is well below the national average of 205 days. Nonetheless, improvements in solar power technology have vastly improved the efficiency of panels, meaning solar energy can be produced even in less-than-ideal conditions. So, despite its clouds and rain, Washington State has now become a great place to install solar panels.

Washington State is now a superstar in the world of renewable energy. Thanks to its Renewable Portfolio Standard goals that incentivize the use of industrial, commercial, and residential solar power, it has become incredibly accommodating to solar energy production. Even now, solar policies in Washington State are superb, which makes it very likely that the Washington State solar market will continue to grow for years to come.

Finally, solar panels can dramatically increase your home’s value. According to Zillow, the average home experiences a 4.1% increase in its value after the addition of a solar power system. In Washington State, the average home value increase from solar panels will be close to $15,916.

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Washington State Solar Cost

The average total cost of solar installations in Washington State ranges from $12,452 to $16,848. On a cost-per-watt basis, solar panel installation in Washington State is between $2.49 and $3.37. These costs have come down significantly in recent years. Obviously, if you purchase a larger system (more watts), your cost will increase in addition to your energy production. With energy bills increasing amid high oil and gas prices, the relative cost of solar is bound to decline further.

How Much Can You Save on Solar in Washington State?

Possibly the most enticing consequence of purchasing solar panels is the fact that you can save lots of money on your electricity bills. When solar panels produce electricity for your home, they can reduce the amount of energy that you pull from the grid, thus lowering your bills. People living in Washington State pay around an average of $95.72 per month for electricity, meaning they can save as much as $1,149 for each year that their solar panels produce electricity. Because solar panels are so durable, you can expect to reap these rewards for more than 25 years.

With a payback period of 5.6 to 6.9 years, you can be saving thousands of dollars per year in almost half a decade. Over the lifetime of your photovoltaic (PV) equipment, you will experience net savings between $41,542 and $50,774, or around $10,846 after the panels pay for themselves.

The Best Solar Incentives, Tax Credits, & Rebates in Washington State

There are several public and private incentives in Washington State that help you save on your purchase of solar panels in Washington State:

Incentive Summary End Date
Federal Solar Tax Credit (ITC) Washington State residents can take advantage of the Federal Solar Tax Credit and get a discount of 26% applied to their tax return. In Washington State, residents enjoy an average ITC of $6,994. December 31st, 2022
Solar Sales Tax Exemption This sales tax exemption provides residential and commercial purchasers of solar panels with an average sales tax exemption of 6.5%, saving consumers an average of $1,749. None
Washington State Solar Property Tax Exemption Washington State does not offer residents and property owners a property tax exemption on the added value of their house that comes with installing new solar panels. None
Net Metering Net metering allows homeowners that create excess energy to use it as a credit on their next electric bill. All energy providers are required to offer this option to homeowners. None
Richland Energy Services’ Residential Energy Conservation & Solar Loan Program Residents of Richland, Washington, who are customers of Richland Energy Services (RES), can access the company’s solar loan program. Customers can take advantage of up to $15,000 in low-interest loans to install clean energy systems. None
Clark Public Utilities’ Solar Energy Equipment Loan Customers of this utility company can access solar loans with a low APR of 3.5% for a total loan amount not to exceed $30,000. None
USDA REAP GRANT REAP assists agricultural producers and rural small businesses reduce their energy costs and consumption by providing loan financing and grant funding to purchase and install renewable energy systems. Eligibility for the REAP program is dependent on you being an agricultural producer, with at least 50 percent of your gross income coming from agricultural operations and small businesses in eligible rural areas. None

Federal Solar Investment Tax Credit (ITC)

The Federal Solar Investment Tax Credit (ITC) is a 26% federal tax credit available for purchased home solar systems installed by the end of 2022. In Washington State, residents pay an average of $26,900 per system and enjoy an approximate ITC of $6,994, which is a significant chunk of money taken off their personal income taxes. Plus, the ITC has done wonders for the county’s solar industry. It has created hundreds of thousands of jobs and brought billions of dollars into the economy since being enacted in 2006.

Washington State Solar Sales Tax Exemption

The Renewable Energy System Sales Tax Exemption is a sales tax exemption that provides purchasers of solar panels with an average state sales tax exemption of 6.5%. This sales tax ends up saving consumers an average of $1,749 per purchase of a photovoltaic (PV) system.

Washington State Solar Property Tax Exemption

Unfortunately, Washington doesn’t offer a solar property tax exemption, which means that you will pay taxes on the added value of your home that results from installing a solar energy system. But there is no need to fret because your energy bill savings will more than make up for this slight increase in property taxes.

Washington State Net Metering

Electricity companies in Washington State have all adopted net metering, which is a policy that ensures your solar panels will be connected to the public-utility power grid, and that surplus power created by your panels will be transferred to the grid.

You can offset the cost of power drawn from the electricity grid as a result of net metering. The minimum amount of compensation that you’ll receive is the avoided-cost rate, which is below the retail rate. While the policy specifics of net metering programs will vary among providers, it remains hugely beneficial for owners of solar energy systems.

Richland Energy Services’ Residential Energy Conservation & Solar Loan Program

Residents of Richland, Washington, who are customers of Richland Energy Services (RES), can access the company’s solar loan program. Customers can take advantage of up to $15,000 in low-interest loans to install clean energy systems. Unfortunately, residents of Seattle and western Washington do not have access to as many incentive payments.

Clark Public Utilities’ Solar Energy Equipment Loan

Customers of Clark Public Utilities can access solar loans with a low APR of 3.5% for a total loan amount not to exceed $30,000.

Commercial Washington State Solar Incentives

Solar Incentives for Nonprofits and Businesses in Washington State

The Washington State University (WSU) Energy Program offered funding for commercial and industrial properties to install solar equipment, but the WSU energy program has since stopped taking on new applicants, and its public funding has not been renewed. Unfortunately, there are no other incentives available specifically for nonprofits and businesses in Washington.

USDA REAP Grant

The United States Department of Agriculture (USDA) has launched a program designed to increase investments in clean energy called the Rural Energy for America Program (REAP). REAP helps agricultural producers and rural small businesses lower their energy costs and consumption by financing loans and grant funding to purchase and install renewable energy systems. You are eligible to participate in the REAP program if you are an agricultural producer with at least 50 percent of your gross income coming from agricultural operations or a small business in eligible rural areas.

State Sales Tax Exemption

Like individual residents, business owners can claim a 6.5% sales tax exemption on any equipment purchased to construct and install net-metered renewable energy systems, such as solar panels. Specific municipalities may offer additional tax credits and incentives.

Key Takeaways: The Best Washington State Solar Incentives

Washington State is a great place to invest in residential, commercial, or industrial solar energy systems. With private and public initiatives in place to make your purchase cheaper, there is really no reason not to get in on the renewable energy market and start your solar projects today! Plus, the increasing cost of energy around the globe should make you eager to own your own means of producing electricity. If you are interested in purchasing, there are many great companies that will help get you set up.

Washington State Solar FAQ

Is solar worth it in Washington State?

Yes, we very much recommend you purchase a solar energy system for your home. Solar can save you tons of money on your utility bills and help reduce your production of emissions and your carbon footprint. Plus, a variety of federal, state, and local financial incentives are available in Washington State to make the purchase of solar panels accessible to anyone!

How much will my electricity bill go down with solar in Washington State?

People living in Washington State pay around an average of $95.72 per month for electricity, meaning they can save as much as  $1,149 for each year that their solar panels produce electricity. Because solar panels are so durable, you can expect to reap these rewards for more than 25 years.

With a payback period of 5.6 to 6.9 years, you can be saving thousands of dollars per year in almost half a decade. Over the lifetime of your photovoltaic (PV) equipment, you will experience net savings between $41,542 and $50,774, or around $10,846 after the panels pay for themselves.

How much does it cost for solar panels in Washington State?

The average cost of a solar panel installation in Washington State ranges from $12,452 to $16,848. On a cost-per-watt basis, solar panel installation in Washington State is between $2.49 and $3.37. These costs have come down significantly in recent years. Obviously, if you purchase a larger system (more watts), your cost will increase in addition to your energy production. With energy bills increasing amid high oil and gas prices, the relative cost of solar is bound to decline further.

Can you get solar panels for free in Washington State?

While it is not very likely that you can get solar panels for free in Washington State, you are lucky to have the support of numerous federal, state, and local financial incentives that will help to minimize the costs associated with purchasing a new solar energy system.

What solar rebates are available in Washington State?

There are many federal, state, and local financial incentives for purchasers of solar energy systems in Washington State. These include the federal government’s Solar Investment Tax Credit (ITC), the Washington State Sales Tax Exemption, and many local and private incentives.

How many homes in Washington State have solar panels?

There is enough solar installed in Washington State to power 30,700 homes, and solar accounts for 0.33% of the state’s electricity production.

Do solar panels increase property taxes in Washington State?

Yes, Washington State does not offer an exemption from increased property taxes resulting from your home’s rising value when you install solar panels. But don’t worry because other savings will more than cover the cost of these increased tax rates.

How much can you write off for solar panels on taxes in Washington State?

Washington State taxpayers have the ability to write off lots of costs associated with the purchase of new solar panel systems. For more information about incentive programs, check out the Washington State government’s website.

House Method’s Solar Companies Rating Methodology

At House Method, transparency and trust are our most important values for the reader. That’s why we took the time to create an objective rating system and score each solar energy company/service according to our methodology.

Our research team dug deep into the fine print of contracts, combed through more than one hundred customer reviews, and thoroughly investigated all of each solar energy company’s services, costs, and products. We’ve done the homework for you by researching nearly all of the solar energy companies on the market so you can have the information you need to make the best choice for your home.

We developed a formula to objectively determine the best solar energy companies and give each a score out of 100 based on the following criteria:

  • Plan Options (30): Do they provide a variety of plan options? We looked at the number of plans each solar energy company offered and the flexibility of adjusting the plan.
  • Services offered (20): How many services are offered in each plan? We looked at whether the company manufactures its own solar panels, whether it contracts out installation, and what additional products each company offers.
  • Trust (10): What do customers say after their solar panels are installed? Does this company offer a guarantee? We considered how satisfied customers are post-service if the company does what it says it will, BBB accreditation, and service guarantees.
  • Prices (10): How reasonable are the costs of the plan or service in comparison to the industry average? We compared the costs of each company to competitors that offer the same solar energy services.
  • Unique perks (10): Does the company offer discounts or special services such as financial incentives, rebates, or a useful mobile app? We looked for extras each company offers that set them apart from the competition.
  • Customer Service (10): How is the customer experience when contacting the company? We considered the speed of response, weekend/holiday availability, and ease of communication through phone calls, email, and online chat functions.
  • Nationwide availability (10): How many states does the company offer its services? Companies that operate nationally and in all zip codes are favored over those with limited availability.

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