How to Save Money on Solar Panels In Washington

Solar panels on a background of blue sky with a flagpole and the flag State of Washington

How to Save Money on Solar Panels In Washington

Key Points

  • Washington plans to triple their solar energy production in the next five years.
  • Homeowners in Washington have access to incentives such as an extended net metering mandate and a sales tax exemption for purchasing solar panels.
  • Washington offers a 30% federal tax credit for solar panel purchases.
  • Residents in Washington benefit from full retail rates on net excess generation (NEG) through the state’s net metering regulation.
  • Washington aims to achieve 100% renewable energy by 2045.

In the next five years, Washington has plans to triple their solar energy production. This stems from an updated set of renewable standards that guide the Evergreen State to total clean energy in the next couple of decades. Going forward, homeowners will have plenty of incentives to purchase solar panels in Washington.

So how can you take advantage of this big move today? This article covers all the programs that exist for home solar, including great interconnection standards and tax savings. There’s no better time to install an array, so let’s get started.

How to Save Money on Solar Panels in Washington: Overview

If you looked at just the price of solar panels in Washington, you may not consider them an option. The state features high equipment prices, low electricity rates, and poor overall sunlight. While homeowners can still save over $16,000 on utility bills over 25 years, that pales in comparison to most other states.

However, government officials in the Evergreen State are looking to change that. Washington now features one of the strongest sets of renewable standards in the country. While programs are still developing, homeowners already have access to an extended net metering mandate and a sales tax exemption. Let’s take a look at how these work.

Solar Panels in Washington: Federal Incentive

Even before considering state-level support, Washingtonians need to take advantage of the federal solar tax credit. The program offers a 30% tax return on all purchases made toward solar. Those installing a 6kW system could save around $5,000 on their initial investment.

To utilize this return, you’ll need to meet a few prerequisites. Firstly, you must own your system outright, either through purchasing it or with a loan. You’re also required to live at the home where the panels are installed and the system must include all-new equipment.

The federal incentive was set to expire in 2021, but it was extended to 2032 with a greater payout. You can take full advantage of this offer until 2035, when it expires.

Washington’s State Credits and Rebates

In some states, homeowners can save money on their installation with state tax credits and equipment rebates. They’re some of the best ways to promote home solar. While Washington hasn’t implemented these types of incentives, they’re not out of the question in the coming years.

For now, Washingtonians can connect their solar arrays to the grid and benefit from the state’s net metering regulation. This mandate requires utility companies to reimburse homeowners for their excess solar energy.

In the Evergreen State, residents benefit from an incredible payback rate. Only a few states offer full retail rates on net excess generation (NEG) and Washington is one of them. While all credits expire at the end of the 12-month period, it’s almost guaranteed to cover all electricity expenses throughout the year.

Solar panels installed and in use on the roof of a house.
Homeowners can receive retail rates on excess energy produced by their solar panels in Washington.

Solar Panels in Washington: Government Regulations

While the Evergreen State hasn’t held the limelight for solar energy, that could change with their updated renewable energy standards (RES). We use a state’s RES to determine its intention to invest in future clean energy. 

In 2019, Washington updated its expired standards to push for a major goal: 100% renewable energy by 2045. To do that, the state has a couple of interim goals.

  • Eliminate coal by 2025
  • Greenhouse gas neutral by 2030

This trajectory suggests that as the years go on, homeowners in Washington will have more access to affordable solar energy.

To help get the ball rolling, the Evergreen State enacted a sales tax exemption. This means any purchases toward solar energy, including equipment, storage, and labor, won’t have that extra charge. And because Washington has a 9% sales tax rate, that’s essentially $1,500 off a 6kW system.

Should Washingtonians Lease Solar?

Some states offer solar leasing as a method of promoting renewable energy to those who wouldn’t otherwise have access to it. This option disqualifies the equipment from benefits such as the federal solar tax return but can help reduce electricity payments while improving carbon footprints.

Fortunately, Washington is one of those states offering solar leasing. However, with such low rates on electricity, most won’t save enough on utilities after the lease payment. Therefore, solar leasing is only recommended for those looking to go green.

However, where leasing might not work, the state’s new community solar program may prove a better option. The movement received 100 million dollars to invest in group solar arrays for the next 10 years. For a monthly subscription, you can connect to one of these solar gardens in your area. While still in development, this option should open up residents to affordable clean energy.

Solar Panels in Washington: Incentive Summary

Federal Tax Incentive30% credit
Washington Tax Credits / RebatesNone / none
Net MeteringNet metering at retail rate; credits expire after 12-month period
Renewable Portfolio Standard100% by 2045
Property Tax ExemptionNone 
Sales Tax Exemption100%
Performance Payment ProgramNone

Frequently Asked Questions

Do you actually save money by going solar in Washington?

With high equipment prices, low electricity rates, and poor sunlight, solar panels in Washington aren’t as effective as they are in other states. However, those who install a 6kW system in the Evergreen State can still save nearly $14,000 on power over 25 years.

How long does it take for solar panels to pay for themselves in Washington?

With an average annual electricity bill of $1,209.36, Washingtonians can pay off a 6kW system in about 13.7 years. This is significantly longer than in most states, and some residents may still need more wattage than this, driving that time even further.

How much do solar panels cost in Washington?

In Washington, homeowners can expect to spend about $2.77 per watt on solar energy. This equals around $16,620 for a 6kW array. The average cost can fluctuate depending on various factors, including wattage, sunlight, location, equipment type, installation quality, and financial incentives.

Can I use the federal tax incentive in Washington?

Homeowners in Washington can take advantage of the federal solar tax credit, which offers 30% back on solar purchases in the form of an income tax return. Those who install a 6kW system could save around $5,000 on the initial investment.

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