Washington Solar Incentives: Solar Rebates & Credits for Washington State

Today, the best solar incentive available in the state is the federal solar tax credit.⁵

However, there are others. This guide explains how to lower the cost of solar panels in Washington state using Washington solar incentives and programs to reduce the cost of green electricity.

Solar Power Technology: How Many Solar Plants in Washington State?

When speaking of “solar power” there are two general types of systems. First are PV or photovoltaic systems.

These are comprised of the kinds of solar panels you see on rooftops or mounted on the ground as part of a solar farm. They convert sunlight directly into electric power.

The state of Washington currently has 8 solar plants, but these aren’t as eco-friendly as installing solar panels on your roof.

The second type of systems are called CSP or Concentrated Solar Power. These use mirrors or lenses to focus sunlight into heat that generates steam to drive an electric turbine.

The type that is more relevant for residential solar power in Washington State is PV technology.

Washington Solar Incentives: Washington State

Solar rebates from the government vary by state, by far the best of the Washington solar incentives will be the federal solar tax credit. Unfortunately the incentive structure at the state level is not robust.

The Washington Utilities and Transport Commission does not have good supplements.⁸ In 2017, the State Legislature passed the Washington State University (WSU) Energy Program which a Washington Green Energy solar program.

The program offered incentives to residential and commercial utility customers and community installers. Unfortunately, the program maxed out in June 2021.

There is now a waitlist that will be incorporated if additional funding is ever appropriated by the State Legislature.

One remaining option is the Solar Energy System Sales Tax Incentive. The state provides a sales tax exemption for solar energy systems.

This exemption is set to expire in 2029 pending renewal. It can cover costs for the purchase of machinery, equipment, and installation of solar energy systems.

For more information, visit Washington Department of Revenue.⁹

Washington Solar Incentives: Which Expenses Can Be Credited?

Expenses such as PV solar panels, PV cells, wiring, inverters, and mounting equipment can count when measuring the credits you can get.

Certain energy storage devices (such as batteries) are also creditable.

Also creditable are many construction and labor costs for onsite operation, along with fees for permits inspections and development.

Grants for Solar Panels

Various federal grants exist to fund purchase and installation of PV solar systems. The grant which could apply to you will depend on your status (are you a business, a contractor, a non-profit), along with how to solar system will be applied.

Search must be conducted according to these specific parameters. Some grant source examples include:

• The Green and Resilient Retrofit Program (GRRP): Program is supposed to provide financing and grants for energy efficiency projects related to U.S. Department of Housing and Urban Development (HUD) multifamily assisted housing properties^.13
• Weatherization Assistance Program (WAP):¹⁴This us U.S. Department of Energy (DOE) program which is administered at the state and local level.
  Weatherization in this context means making a home more energy efficient or healthier. The eligibility is for households at or below 200% of the poverty income guidelines or those receiving Supplemental Security Income or Aid to Families with Dependent Children.
• Tribal Energy Program: The Tribal Solar Accelerator Fund (TSAF) is run by the office of Indian Energy Policy.
  It offers funding for new solar projects in tribal communities by way of various grants including the Tribal Facility and Residential Grant, the Tribal Energy Plan Grant and the Tribal Solar Gap Funding Application.

Photovoltaic (PV) Technology

Photovoltaic systems have many components constructed around a solar array,⁶ in other words the group of solar cells which capture sunlight. These cells are made of silicon, which is a semi-conductive material.

This means that they do not readily conduct electricity or absolutely refuse electricity. They can conduct it under specific conditions.

The cell is arranged like a thin sandwich with two different layers of silicon. Each layer has been specially treated to conduct electricity in a specific way.

The lower layer is treated to have slightly too few electrons. It is called the p-type layer. the above layer is treated to have slightly too many electrons.

It is called the n-type layer. (P and n stand for positive and negative charge).

Thus there is potential energy between the two. When the oppositely charged layers of silicon are stacked atop each other and set up an electrical circuit, sunlight is applied to the n layer.

The photons in the sunlight will knock electrons out of the lower circuit into the above layer and then flow around the circuit.

The more light, the more knocking of electrons around the circuit, the more current. This is the basics of PV solar generation.

It is considered a highly sustainable and clean way to produce electricity. This is mainly due to the fact that there are no greenhouse gas or toxic emissions associated with the energy production directly.

The environmental concerns are mainly in regards to the manufacture and disposal of the panels themselves and are discussed below.¹

History of PV Technology

In 1839, French physicist Alexandre-Edmond Becquierel made the critical discovery that some metals generate electrical current when exposed to light. Although many metals exhibit this property, in 1873, English engineer Willoughby Smith discovered the particular suitability of selenium to this purpose.

In 1905, German physicist Albert Einstein deciphered the physics of this Photoelectric Phenomenon; this discovery eventually earned him a Nobel Prize. The theory was later proven with experimentation by other American physicists.

Then in 1940, a researcher named Russell Ohl at Bell Labs discovered that a treated junction semiconductor will produce an electrical current when exposed to light. Almost a decade and a half later, other researchers from Bell labs made the first workable photovoltaic silicon solar cell.

It was highly inefficient and was called a “solar battery.” By the 1960s various satellites were using solar cells.

In 1997 the United States Federal government announced the Million Solar Roofs Initiative which aimed to establish a million rooftop solar systems by 2010. In 1979, US President Jimmy Carter installed solar cells on the White House rooftop.

Since then the cost and efficiency of photovoltaics has declined considerably. Today there are millions of PV systems in place all over the world.

The greatest number are in Europe and North America. The majority of solar cells and modules are produced in China and Taiwan.¹

Home Solar System (Grid-Tied or Off-Grid)

The two basic options for solar grid systems are grid-tied and off-grid.

Grid tied is the more common preference. This means that the home is connected to local power lines, and the solar system is incorporated so that, when the system generates excess electricity, it actually supplies the grid with that excess.

The utility company gets relatively cheap clean energy to sell to someone else, and the producer (solar homeowner) builds up credit with the utility company through, ‘net-metering,’ that offsets their electrical bills.

So, when operating at equilibrium, the solar system means there is no need to pay for electricity, when operating at surplus, it sends excess to the grid to build credits, and when at deficit those credits are redeemed with the utility company for its supply.

The other option is off-grid. In this system, excess solar energy is stored in batteries.

This option is required for homes unsullied by an electrical utility company.

A third type of home solar power should be mentioned here. That is local water heating with a solar collector.

In this application, solar panels are applied to heat water, usually for home use, and the sunlight not converted into electrical current. This method became popular in the Mediterranean, especially during the fuel shortages of the late 90’s.

Today, although uncommon in North America, they are a great way to heat water with clean energy. The standard tank size is around 40 gallons.

Again, as there is no connection with an electrical utility company, this is technically classified as an off-grid system.

Solar Panels for Home in Washington State

The entire process of arranging solar for your home can take around three months. So usually an engineer will visit your property to make sure it is compatible with the desired system.

They will inspect things like the installation site (roof) and home electrical panel. The installer company will likely also send a representative to inspect the site, not for electrical viability, but to arrange the specific placements of the panels.

They will do things like measure the slope and aspect of the roof.

Another significant step is paperwork. You will want to apply to all available federal and state of Washington solar incentive programs.

These usually fall into state and federal programs to be discussed below. There are also financing programs available.

Building permits will likely be required depending on the location. Your installer will be aware of the requirements for your situation and may even complete the paperwork on your behalf.

Next they will place the equipment order. The bulk of the cost will come from the panels themselves and the inverters.

Your installer will likely have preferred brands, but it is worthwhile to do some research to make sure that they are the best brands for you, as your installer may receive some benefits for recommending specific brands and/or products.²

Rooftop Solar Panel Installation (Solar Panel Installation)

The physical installation itself can take around 1-3 days. The roof will need to be prepped.

The wires are laid which connect the electrical panel and power system. Then the solar panel racking is installed and the panels attached to them.

Last, the inverters are connected. These convert the direct current (DC) energy produced by the PV system into alternating current (AC) electricity used in homes and by the power grid.

The final step is that a local or federal government official will visit the ready system to inspect it and give approval to begin functioning as part of the grid. They will verify that the system is safe and code-compliant.

Then the local utility company will visit,⁷ and finally connect your system to the power grid.²

Does Solar Increase Home Value?

‘Does solar increase home value?’ Solar absolutely increases home value.

Because almost all of the cost of solar energy is up front, and the savings are so great, solar systems are highly favored by buyers. The National Renewable Energy Laboratory (NREL) found that every dollar saved on energy through solar increases home value by $20.

One of the best ways to figure out exactly how much higher a valuation with solar would be is to visit any real estate or housing site. Simply search for similar houses within the same neighborhood, then compare the prices of those with solar systems to those without.

Solar Panel Installation Cost: Average Cost of Solar Panels in Washington State

Cost for solar panel installation in Washington State, after taking into account the federal solar tax credit, can range from $17,500 to $23,500 with an average cost of solar panels in Washington state of about $20,500. This is usually the biggest cost associated with solar, and the biggest reason for interest in Washington solar incentives.

It should be noted that there can be significant price variation here. Solar panels differ in size and wattage, among other factors.

Also, most solar systems pay for themselves in less than 8 years.

However due to high up front cost, many homeowners are increasingly interested in DIY installation options. You can buy DIY kits from online dealers or hardware stores.

These are estimated to save around 10% as the installation labor cost. However, the danger is incurring other charges by forgoing professional installation.

Pros and Cons of DIY Installation

The only real pros of DIY installation are reduced costs, as mentioned, and time saved in coordinating with an installer, etc. This is really only a preferred option for an off-grid setup.

For an on-grid setup you will likely lose much more in time and frustration with government officials if you just have it professionally done to their standards up front.

The major con of doing an off-grid system DIY is that you are presumably not a professional, which means the work will probably be of lower quality. Also, you will not be able to take advantage of any warranty offered by an installer for maintenance etc.

If setting up DIY make sure to get the best manufacturer’s warranty on parts and equipment.

In general, professional installation is considered worth an extra 10% for a system that will likely pay for itself before long.

How To Get Free Solar Panels

You may be thinking about how to get solar panels for free, or how to get free solar panels from the government. Unfortunately, most offers of ‘free’ solar panels are just marketing ploys.

For example, a company will offer ‘free’ solar panels, and charge you either a monthly use fee, or charge you based on the amount of electricity generated.

So while the solar panels themselves are free in the sense that you are not purchasing them, you are still paying to have them on your property and use them. In fact, many of these agreements end up being more expensive in the long term.

Most solar systems can pay for themselves in a few years. And in fact, you are entitled to federal and state incentives if you buy a solar system.

Most of the incentives do not apply otherwise. One option to avoid upfront costs is to use financing.

What Is the Average Cost of Solar Panels in Washington State: How Much Does It Cost To Install Solar Panels in Washington State?

‘How much does it cost to install solar panels in Washington State?’ The average cost of solar panels in Washington State is dependent on a number of factors, including the size of the desired system, the type of system, the type of roof, the installation company you choose, etc.

A full 5-watt standard solar system for a residential home can average around $25,000. This price is before applying any federal or state rebates.

Thanks to net metering, a solar system in Washington state will likely pay for itself in less than 8 years.

How Much Are Solar Panels in Washington? (Washington Solar Panel Cost: Average Cost of Solar Panels in Washington State)

According to findenergy.com, the average cost of solar panels in Washington state for a 5 kilo-watt solar system without (or before) receiving a fax credit is around $18,000, around $3.60 per watt.

Solar Panels Washington State

One common question in the Pacific Northwest is, are solar panels even worth it, due to the frequent clouds and rain? Also, Washington state has some of the lowest electricity rates in the USA, and Washington solar incentives are usually lower than those in California.

Is it worth it? The answer is yes, despite these two concerns.

Solar systems can function well even without ideal weather, benefiting the environment and your wallet. Many homeowners in Washington have been reaping the benefits for years.

The daily sunlight hours for each county in Washington varies from 3-4.5 hours a day.

Ways to buy include outright with cash, with financing through loans, or leasing. With cash, you own the solar system and avoid any interest or loan fees.

This also entitles you to the federal tax credit. It is the recommended option. The loan options can come from banks or various lenders, however these have obvious risks and additional charges.

One good option could be taking a loan out through a trusted solar installer. Such loans are also sometimes eligible for the federal tax credit.

The third option is leasing. This involves a long term contract with a solar developer where they install solar panels on your property and charge you a monthly rate to use it and consume the energy.

However in this case all the incentives almost always go to the developer, since they own the technology. A Power Purchase Agreement (PPA) is similar, but instead of a fixed rate, the developer charges you a price per kilowatt hour for the energy generated.³

Free Solar Panels Washington State

Washington State does not currently have a pathway by which to obtain truly free solar panels. The only options are lease and PPAs as discussed above.

Solar Panel Cost Calculator Washington

There are many calculators available on the internet. Here is one.¹⁰

Washington State Solar Panel Disposal

In 2017, the Washington Legislature passed Senate Bill 5939 this was an energy bill focused through tax incentives. The bill created Chapter 70A.510.010 RCW (Photovoltaic Module Stewardship and Takeback Program).

This requires solar panel manufacturers to provide the public a convenient and environmentally sound way to recycle all modules purchased after July 1, 2017. They are required to provide this free of charge.

It should be noted that product stewardship organizations may fulfill this function on their behalf. The program has not actually come into effect yet, but a likely projected start is July 1, 2025.

Until then, the best course of action is to either call your supplier or email the state recycling service for disposal or recycling instructions specific to your product.¹¹

Solar Panel Recycling

Most solar panels are constructed with a variety of materials such as silicon, aluminum, copper, and plastic. Many of these can be recycled.

Glass accounts for about three quarters of the panel weight and fortunately already has a well developed recycling industry. Copper and aluminum are also easily recycled.

Silver and copper not contained in the wire can be more difficult to access, although they are not considered very harmful to the environment and are present in solar panels in relatively small amounts. Toxic metals in the panels are a bigger problem and the main reason for recycling necessity.

In addition, panels can have a polymer seal which makes them more resistant to weather. However this seal can greatly increase the difficulty of disassembly and therefore recycling.

Usually an enormous amount of heat must be applied to remove it, increasing cost, risk, and environmental impact.

Apart from panels, solar systems have other components that may require recycling. Inverters should be recycled as electronic wastes, and most paneling racks will be simple scrap metal.

Batteries should be recycled with specific battery recycling programs.

Solar panel recycling and electronic recycling in general is still a growing industry. As financial incentives and public support increase, companies are trying to figure out the best ways to reuse as much material as possible from various forms of electronic waste.

There are various recyclers across the state today, and the coming years should witness significant progress.

Federal Solar Tax Credit

In the United States, solar energy customers are usually entitled to financial incentives at the federal and state level. The most significant federal incentive is the federal solar tax credit.

It is also known as the investment tax credit (ITC), however it should be noted that it differs from the ITC offered to businesses. The federal energy credits known as solar tax credit allows customers of both residential and commercial solar systems to deduct 30% of the cost of installing their solar energy system from their federal taxes.

The term tax credit here simply means you would record it as a deduction for you annual income tax. For example, if you want to use the credit on $3,000 dollars worth of eligible solar expenses, you would claim a $1,000 deduction on your income taxes for the year the system was installed.

Systems installed between 2022 and 2032 will be eligible for the 30% credit. But the percentage is set to decrease to 26% for systems installed in 2033 and to 22% for those installed in 2034.

The tax credit is set to expire completely in 2035 pending Congressional renewal.

To avail of the ITC, fill out and file the IRS Form 5695.¹⁶ There is no limit to the dollar amount of credit that can be claimed.

None of the information here should be taken as financial advice.

Interested parties should consult the IRS or professional consultation.^4,12

How Does the Tax Credit Work If I Don’t Owe Taxes?

You might be wondering, ‘how does the solar tax credit work if I don’t owe taxes?’ or if you owe an amount smaller than the expected tax credit for your solar system.

The tax credit is non-refundable, meaning you will not get a refund for any amount by which your tax credit exceeds your liability for the year. However, any portion of the unused tax credit can be applied to the next tax year.

Washington Solar Incentives: Are You Eligible for Solar Tax Credit?

Eligibility falls under the following criteria. Your solar PV system should be new or newly used, should be located at your residence in the USA, and installed in the relevant time period.

You either own the PV system (it is okay to have purchased it through financing, but it is not okay to be selling the electricity to a solar company), or if you purchased an invested in a community solar project, if the electricity is credited against your residential electric consumption and doesn’t go over it.

It should be noted one does not necessarily have to be a homeowner to get a credit. Tenants can claim in cases where they contribute to the costs of an eligible solar PV system.

The system also does not need to be connected to the electric grid. It simply needs to generate electricity for residential use.

The PV system also does not need to be installed on a roof to be eligible.

Net Metering

Net metering is the billion tool by which grid-tied solar systems can sell excess energy back to their energy grid. Technically the value of the electricity is being credited to you by the utility company.

This benefits you and them. You get energy credits for passive generation, and they receive relatively cheap, green energy to their system.

The metering is conducted automatically by your local utility company. Over the lifetime of your solar panel system you can expect to save tens of thousands of dollars by offsetting need for grid electricity.

Most solar equipped homes in the pacific northwest can produce excess energy in the summer and a deficit in the winter. So during the summer, you will likely accrue a surplus on the meter which will be depleted in summer.

In Washington State, net metering credits expire on March 31 every year and credits from surplus generation are “zeroed out,” meaning you won’t receive any financial benefit from an annual surplus. Here is a guide on Washington State net metering.¹⁵

Environmental Impact of Solar Panels

In general, solar energy is considered clean energy. It is highly preferred by environmentalists, however there are still environmental risks associated with its generation.

In particular, land use, water use, hazardous materials in manufacturing, and manufacturing emissions. Fortunately, rooftop solar systems do not require land reformation to be placed.

In fact they make double use of habitat which was already destroyed for housing.

As for water use, PV systems do not require water for the generation of electricity, however, water is used in the manufacturing process. Depending on the specific manufacture conditions, this water can be wasted or polluted unnecessarily.

So it is important to purchase from a manufacturer with the highest environmental standards.

One of the biggest issues with PV manufacturing is the sourcing and processing of hazardous materials. Most of these are used to clean and purify the semiconductor surface.

They include various toxic acids, among other chemicals. Again, the amount and sort used depends on a number of factors.

Thin film PV cells are associated with more hazardous materials like arsenide, and cadmium-telluride. These are extremely toxic and pose increased risk.

They are very risky to handle and dispose of. Upmost care must be taken. Fortunately, they are usually also expensive so manufacturers are strongly incentivized to recycle them.

Solar cell manufacturing workers also face risks of inhaling silicon dust

Another issue are greenhouse gas emissions. Of course, solar panels do not directly produce these gasses.

It is one of the great benefits of solar power. However there are emissions associated with the manufacture, transportation, installation, disposal processes, etc.

You can learn more about the carbon footprint solar panels here. But many estimates put life emissions for PV systems between 0.07 and 0.18 pounds of carbon dioxide per kilowatt-hour.

You can learn more about total carbon offsets by using a carbon ecological footprint calculator.

Despite these concerns, solar power is considered an environmentally friendly option, thus the development of Washington solar incentives and federal credits that reduce the average cost of solar panels in Washington state.¹