2024 Solar Incentives Guide for Seattle, WA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Seattle.
You'll learn about:
- Local & State Solar Incentives
- Federal Tax Credits (Updated for 2024 and beyond)
- Ways to optimize your solar investment
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What Solar Tax Credits, Incentives, and Rebates are Available in Seattle?
Renewable Energy Cost Recovery Incentive Payment
Renewable Energy Sales and Use Tax Exemption
100% exemption for solar photovoltaic systems 10 kilowatts or less, and solar thermal systems;
75% exemption for other qualified systems
Evergreen Sustainable Development Standard for Affordable Housing
Federal Residential Renewable Energy Tax Credit
Source: https://www.dsireusa.org/
Solar incentives are designed to make renewable energy usage more affordable through financial incentives for those who install solar panels on their homes. Solar incentives may include upfront discounts, cash back or monthly credits towards your utility bill. Some incentives are handled by the federal government, some by the state of Washington and some by your specific utility company, county or municipality. Some broad categories of solar incentives include:
- Tax Credits: These credits are dollar-for-dollar reductions (not deductions) in how much in taxes you owe the federal government.
- Tax Exemptions: Your solar system might qualify for exemptions on both sales and property tax. Sales tax exemptions come into effect at the time of purchase. Property tax exemptions let you exclude the added value of the solar panels when calculating property taxes on your house.
- Net Metering: Net metering factors in once your solar panels are up and running. If you've signed a net metering agreement with your Seattle utility company, the company will subtract the value of the excess energy your solar system produces from your utility bill each month. In some places, this is a dollar-for-dollar credit, while in other areas you may receive a refund equivalent to a percentage of the value.
- Rebates: Solar rebates might be provided by your local utility company, or by your county or state. These rebates are essentially cash back that is applied after you purchase solar panels and before tax credits are calculated.
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Federal Solar Incentives
Federal incentives are the type of incentives that you are most likely to have some knowledge of. It's likely that you've heard of the Federal Solar Investment Tax Credit, or ITC. This incentive is a tax credit equal to a specified percentage of the money you spend on solar panels for your home.
The ITC originally covered 30% of the total cost of solar system installation, and has fluctuated slightly over time between 26-30%. The percentage you qualify for will depend on when your solar system was installed. The total installation cost includes the panels themselves as well as the cost of labor, accessories and equipment. There is no maximum amount you can claim. The ITC applies to solar systems installed after January 1, 2006, on your primary or secondary residence. The residence must be owned by you and in the United States.
Talking to your local Seattle solar panel installation expert is the best way to learn more about how the ITC applies to you.
The ITC was both renewed and expanded by the passage of the Inflation Reduction Act in August 2022. It's also now called the Clean Energy Credit. The Clean Energy Credit is valid until 2035. Your solar installation project undertaken between 2022 and 2032 may qualify for a 30% tax credit; this amount will be decreased slightly on a yearly basis until the current program ends. Beginning in 2023, it will also be easier to get credits for energy storage systems under this new program.
More information about the new Inflation Reduction Act can be found here. Your local Seattle solar panel installation experts can answer any questions you have and explain how the new Clean Energy Credit applies to you.
State & Local Solar Incentives
In addition to those provided at the federal level, there are often also state solar incentives. Rebates, tax credits and more may be available at a more local level. Some incentives are ongoing, while others are only available for a limited time. Incentives might be offered by the Washington government, or by your county or municipality.
Next Steps for Installing Solar in Seattle
There are many types of solar incentives: those provided by local utility companies, those given by the Washington government and those offered by the federal government, to name a few. Solar energy use has increased tremendously in the last 15 years, partially due to these incentives. Reaching out to your local Seattle solar panel installer is the right first step towards getting all the incentives you qualify for when you switch to solar energy.
EcoWatch's Seattle, WA Solar Incentives FAQs
How do I learn if I qualify for specific solar incentives?
It's a good idea to talk to your local Seattle solar installer to get an understanding of which incentives your project may qualify for. In most cases, solar incentives apply to new solar panel systems installed on property you own (in the U.S.) within a specified date range. Some incentives, like those provided by the Washington government, may have other requirements.
If I already have solar panels, can I still claim incentives?
An excellent idea would be to talk to the company that installed your solar system – or speak to a local Seattle solar installer — to learn about which incentives you may qualify for. If your system was installed after January 1, 2022, you likely qualify for the recently increased 30% tax credit under the Inflation Reduction Act. Systems installed between 2006 and 2021 may qualify for a tax credit of 26-30%.
When does the federal solar tax credit end?
The federal solar tax credit, formerly known as the ITC and now named the Clean Energy Credit, is set to end January 1, 2035. The current 30% credit will end in 2032, replaced by a 26% credit in 2033 and a 22% credit in 2034.
Can I claim incentives both towards the initial cost of solar panels, and later as reimbursement?
The order in which incentives are applied could vary depending on which incentives you are eligible for but typically yes, you can receive multiple types of incentives for your solar project. Get in touch with your solar installer or a local tax professional to verify you are claiming all possible incentives and applying them in the correct order.
Our goal is to reach as many people as we can with sensible solutions like solar energy. Our team of full-time local researchers collects solar price and installation data for every city in America then compiles it to create these digestible city guides. If you want to read our solar expert's opinion on the top solar companies featured here, follow this link.
Solar incentive research was conducted by Melissa Smith and Karsten Neumeister. Local data analysis was conducted by James Savino. See something we missed or could do better? Email the editor.