What Solar Tax Credits Are Still Available in Washington?

If you’ve been thinking about going solar, you’ve probably heard that things have changed. The 30% federal solar tax credit that homeowners could claim when buying a system outright expired at the end of 2025. That shift caught a lot of people off guard.

But it doesn’t mean the window has closed on making solar work financially. Washington still has some strong incentives in place, and depending on how you structure the purchase, federal benefits may still be on the table. Here’s what’s actually available to homeowners right now and what it means for your bottom line.

At a Glance

• The 30% federal solar tax credit expired for homeowner-purchased systems at the end of 2025
• Homeowners who lease or use a Power Purchase Agreement (PPA) can still benefit from federal credits through 2027
• Washington’s sales tax exemption on solar equipment is still active through 2029
• Net metering lets you earn 1:1 credits for excess energy sent back to the grid
• The Clean Energy Transformation Act (CETA) is driving long-term clean energy investment statewide
• Solar installations often require electrical panel work—it’s worth getting that assessed upfront

What Happened to the Federal Solar Tax Credit?

In July 2025, the “One Big Beautiful Bill” was signed into law. Among other things, it ended the Residential Clean Energy Credit (Section 25D) for homeowner-owned solar systems as of December 31, 2025. There was no phase-down—it went from 30% to 0% for cash and loan purchases.

That said, if you installed your system before that cutoff and haven’t filed yet, you can still claim the credit on your 2025 taxes using IRS Form 5695.

The Third-Party Ownership Route

Here’s what a lot of homeowners don’t realize: federal solar incentives aren’t entirely gone. If you go solar through a lease or Power Purchase Agreement (PPA), the solar company owns the system, and they can still claim the credit under Section 48E through the end of 2027.

What that means for you:

• You don’t pay for the system up front
• The company passes the tax savings along through lower monthly rates
• You still get the benefit of solar power without owning the equipment

It’s not the same as claiming the credit yourself, but it’s a legitimate path that keeps federal dollars in the picture. 

The Database of State Incentives for Renewables & Efficiency (DSIRE) is a good starting point for comparing what’s available based on your location and ownership structure.

Washington State Incentives That Are Still in Play

Even without the federal credit for purchased systems, Washington offers a few incentives that make a real difference.

Sales Tax Exemption

This one’s straightforward. Solar energy systems under 100 kilowatts are exempt from state and local sales tax in Washington through 2029. That means you skip the 6.5% state tax plus any local taxes, which can save you anywhere from $1,500 to $3,000+, depending on the size of your system.

There’s no application or rebate to file. Your installer simply doesn’t charge you the tax on qualifying equipment like panels, inverters, and racking. This exemption was established under Washington Senate Bill 5116, the same legislation that created the Clean Energy Transformation Act.

Net Metering

Net metering is one of the most valuable long-term incentives in the state. Here’s how it works:

• When your solar panels produce more electricity than your home uses, the excess flows back to the grid
• Your utility gives you a 1:1 credit at the full retail rate for that energy
• Those credits offset your bill during months when your panels produce less, like in winter

Most Washington utilities, including Puget Sound Energy and Snohomish PUD, are required to offer net metering for residential systems up to 100 kW. Over the life of a system, this single policy can be worth more than a one-time rebate.

You can read the full policy under RCW 80.60.030 on the Washington State Legislature’s site.

Utility-Level Programs

Some local utilities offer additional rebates or programs for solar and battery storage. These vary by provider and can change year to year, so it’s worth checking directly with your utility. A quick search for your provider’s name plus “solar incentives” is the fastest way to find out what’s current.

If your Western Washington home needs additional circuits for a battery system or updated wiring for solar readiness, Rhema Electric offers all the electrical services needed to handle that ahead of your installation.

How the Clean Energy Transformation Act Shapes the Bigger Picture

Washington’s Clean Energy Transformation Act (CETA), signed into law in 2019, set aggressive clean energy targets for every utility in the state:

• Eliminate coal-fired generation by 2025 (already met)
• Reach carbon-neutral electricity by 2030
• Achieve 100% clean electricity by 2045

What does that mean for homeowners? It means Washington’s utilities are actively investing in renewable infrastructure and grid modernization. As the state pushes toward those benchmarks, solar adoption becomes a bigger part of the equation—and policies that support residential solar, like net metering, are more likely to stick around.

Homeowners interested in how solar fits into a broader home energy strategy may also want to read our blog, what uses the most electricity in your home? for a closer look at where your power actually goes.

What to Know Before You Install

Going solar isn’t just about panels on a roof. There’s electrical work involved, and it’s worth understanding what that looks like before you sign a contract with an installer.

A few things that commonly come up:

• Panel capacity: Many older homes need a panel upgrade to support the added electrical load from a solar system. If your panel is undersized or outdated, it’s something to address before installation, not after.
• Permits and inspections: Solar installations in Washington require electrical permits and a final inspection. Working with a licensed electrician makes sure everything is up to code and covered by your homeowner’s insurance.
• Battery storage: If you’re adding battery backup alongside solar, that’s additional wiring and circuit work that should be done by a professional.

Rhema Electric’s Solar & Alternative services cover exactly this kind of prep work. Getting the electrical side squared away before your installer shows up helps the whole project go smoother.

Solar Still Makes Sense—the Math Just Looks a Little Different

The federal credit was a big deal, and losing it changes the upfront math. But solar in Washington still pencils out for a lot of homeowners, especially when you factor in the sales tax exemption, net metering credits, and rising utility rates over the next 25 years.

The key is going in with accurate information and realistic expectations. Incentive programs change, and what’s available today may look different a year from now. When in doubt, verify details with your utility and consult a tax professional.

Get Your Home Solar-Ready With Western Washington’s Trusted Electricians

Rhema Electric can help you figure out whether your home’s electrical system is ready for solar, from panel evaluations to wiring assessments. We’ve been serving Western Washington since 2005 with a safety-first standard, proper permits, and owner involvement on every job.

Our Safety & Savings Membership includes priority scheduling, free inspections, and service discounts. Reach out to Rhema Electric in Burlington, WA, to get started.