Washington Solar Incentives (2026): Sales Tax Break & Net Metering

Important 2026 Federal Tax Credit Update

One big change for 2026: the federal Residential Clean Energy Credit (Section 25D) is no longer available for property placed in service after December 31, 2025, based on current IRS guidance. If your system was placed in service by the 2025 deadline, you may still be able to carry forward unused credit amounts, but new 2026 residential installs generally shouldn't assume a federal credit.

Washington Solar Sales Tax Exemption

Washington offers a sales tax exemption for qualifying solar energy systems. The Washington State Department of Revenue explains that, starting July 1, 2019, customers can receive a sales tax exemption on the purchase and installation of qualified solar energy systems that generate up to 100 kW AC. The Department also notes the exemption is tied to qualifying purchases and proper documentation through the certificate process.

This incentive matters because sales tax is an immediate cost that you don't have to finance. In real-world quotes, removing sales tax can be one of the most tangible Washington Solar Incentives because the savings happen at the point of sale (assuming your seller/installer applies the exemption correctly).

How the exemption is typically applied

In many cases, the seller verifies eligibility and applies the exemption when you provide the required certificate documentation. The Department of Revenue has published program guidance and supporting materials for how the exemption works and who qualifies.

Net Metering in Washington

Washington law requires electric utilities to make net metering available to eligible customer-generators, generally for systems up to 100 kW AC that are located on the customer's premises and intended primarily to offset on-site electric use.

The March 31 "true-up" is a key date

Under Washington's framework, utilities track excess generation credits over billing periods, but unused net metering credits are cleared out annually on March 31. Seattle City Light's customer-facing bill guide explicitly references the state-mandated annual balance clear-out on March 31, which is a helpful reminder that system sizing and seasonal production matter in Washington.

Interconnection and metering basics

For customers served by investor-owned utilities under Washington Utilities and Transportation Commission (UTC) jurisdiction, Washington administrative rules address net metering meter requirements and other interconnection-related details, including bidirectional metering and certain equipment/labeling expectations.

Because utilities implement net metering through tariffs and service rules, you'll still want to confirm your exact crediting method and application steps with your electric provider before you sign a contract.

Federal Solar Incentives in 2026: What Changed

Many homeowners still search for "federal solar tax credit," but IRS guidance now states the Residential Clean Energy Credit is not available for property placed in service after December 31, 2025. That means a typical 2026 residential Solar Installation should not budget for a new 25D credit unless future federal guidance changes.

What about small businesses?

Federal incentives for businesses are not identical to the residential credit. The IRS describes a Clean Electricity Investment Credit (Section 48E) for qualified facilities and energy storage technology placed in service after December 31, 2024 (with phaseout rules). Eligibility details can be technical and may depend on how your project is structured and who owns the system.

If you're a small business evaluating solar, this is one reason ownership structure (buy vs. finance vs. third-party ownership) can affect which incentives you can use.

Washington Renewable Energy System Incentive Program Status

Washington's Renewable Energy System Incentive Program (RESIP) is often mentioned online, but it is fully subscribed and not taking new applicants. Both the WSU Energy Program and the UTC summarize that the program ended June 30, 2021 and has not been re-funded for new enrollments.

If you see references to ongoing payments, those generally relate to existing participants rather than a currently open incentive you can newly join in 2026.

Grants and Public-Facing Programs

Washington's Department of Commerce administers clean energy grant funding that can support solar deployment, often with an emphasis on equity, resilience, and community or institutional projects rather than typical single-home rooftop systems. If you're part of a community organization, public entity, tribe, or a multifamily affordable housing stakeholder, these programs may be relevant pathways to solar funding.

Solar Installation in Washington: How Incentives Affect the Process

A typical Solar Installation timeline includes a site assessment, system design, permit applications, utility interconnection steps, installation, inspections, and permission to operate. In Washington, two steps that can make or break your incentive value are (1) documenting sales tax exemption eligibility correctly at purchase time and (2) aligning system size and production with the annual March 31 net metering credit clear-out.

What Are Needed for Solar Installation in Washington?

Homeowners often ask what are needed for solar installation when they're trying to estimate time and paperwork. In Washington, you generally want to be ready with a recent electric bill (to size the system), proof of property ownership or landlord authorization, roof condition details (age, shading, structural considerations), and electrical service information (main panel rating and available breaker space).

Most projects also require local permits, an interconnection application with your utility, and final inspection/approval before the system can operate in parallel with the grid. If you're claiming the sales tax exemption, you'll also want to confirm the seller/installer's process for the exemption certificate and keep copies with your project records.

Solar Companies in Washington: How to Compare Without Guesswork

When comparing Solar Companies, focus less on flashy "incentives" marketing and more on whether the proposal is designed around Washington realities: net metering credit rules, your seasonal usage, and documentation practices for tax treatment. Ask each bidder to explain how they estimate production (including winter output), whether they expect you to lose credits at the March 31 true-up, what warranties cover (equipment vs. workmanship), and what assumptions are used in savings calculations.

Also ask who handles permits, interconnection, and inspections, and whether the contract spells out how any tax exemptions are applied. Clear, written assumptions make incentive outcomes easier to verify.

FAQ: Washington Solar Incentives (2026)