There are a variety of state and federal incentives available to both residential and commercial customers who wish to install renewable energy at their home or business.
Renewable Energy System Incentive Program
In 2017, the State Legislature approved the Washington State University (WSU) Energy Program to administer a Renewable Energy System Incentive Program. The program provides incentive payments for renewable energy systems owned by residential and commercial utility customers, as well as community solar installations.
As of June 2021, the program is fully subscribed, with a waitlist pending additional funding from the Legislature. The enrollment period for the current program ends on June 30, 2021.
More information can be obtained from the WSU Energy Program.
Solar Energy System Sales Tax Incentives
Washington provides a sales tax exemption for solar energy systems, such as rooftop solar panels. The exemption is available through 2029 and can exempt sales taxes for the purchase of machinery, equipment, and installation of solar energy systems. For more information, visit the Washington Department of Revenue’s website.
Solar Investment Tax Credit
The federal government first enacted a solar investment tax credit (ITC) in 2006. The ITC allows a person that installs solar panels on the roof of their home or business to claim a dollar-for-dollar reduction in the income taxes that they would normally pay to the federal government.
The amount of this reduction is currently capped at 26% of the amount invested in the solar array. The 26% reduction will stay in place for all projects that begin construction before Dec. 31, 2022. It will then drop to 22% for projects that begin construction in 2023. On Jan. 1, 2024, the ITC is scheduled to expire for residential customers, and drop to 10% for commercial customers.
The Solar Energy Industries Association (SEIA) has a website explaining the ITC, while the federal Department of Energy has downloadable fact sheets.