Washington Sales Tax Exemptions for Solar Energy

New WA Sales Tax Exemption on Solar Panels

Washington State just made solar energy installations cheaper. Beginning July 1st, 2019, all equipment for solar energy systems smaller than 100 kilowatts in size are exempt from 100 percent of state and local sales and use tax.

This saves thousands on most projects. For an average sized residential system, this will save homeowners $2,500+ on the total project cost. That's about 8% savings!

This new Washington state tax exemption for solar (PDF) is good through December, 2029. Paired with the last year of a federal solar tax credit that returns 30% of the system cost, solar technology is better (and cheaper) than ever. Now is a great time to start making your own power!

 

How Does It Work?

Simple! Instead of paying the typical sales tax you normally would, you now do not. This tax exemption alone significantly decreases the price of by thousands. Depending on which city you live determines how much you will save. If you live in Vancouver, Washington you will pay 8.4% less than you would have prior to July 1st, 2019. Below is a list of SW Washington cities and their current combined state and local sales tax.

Savings by City

  • Amboy - 7.7%

  • Battle Ground - 7.7%

  • Camas - 8.4%

  • Castle Rock - 7.8%

  • Ridgefield - 6.35%

  • Goldendale - 7.0%

  • Longview - 8.1%

  • Vancouver - 8.4

  • Washougal - 8.4%

  • Woodland 7.7%

Is your city not here? Find out your tax exemption with this sales tax calculator.


Other WA State Solar Incentives & Rebates

30 Percent Federal Solar Tax Credit

Get back 30 percent of the final price of installing a brand new solar installation back in federal tax credits. This reduces your federal liability on a dollar-to-dollar value. There is no maximum.

In order to receive the full 30 percent, your solar installation must be operating before the 1st day of January in 2020. Below is a list of scheduled changes expected to take place and you should put them into consideration while planning to invest in solar.

  • 2016 – 2019: The tax credit remains at 30 percent of the cost of the system.

  • 2020: Owners of new residential and commercial solar can deduct 26 percent of the cost of the system from their federal tax liability.

  • 2021: Owners of new residential and commercial solar can deduct 22 percent of the cost of the system from their taxes.

  • 2022 onwards: Owners of new commercial solar energy systems can deduct just 10 percent of the cost of the system from their taxes. There is no federal credit for residential solar energy systems.

Net Energy Metering

At times, your solar energy system will produce more power than your home needs to consume. This excess energy needs somewhere to go so it flows backwards into your local utility’s electric grid. When this occurs, your meter “spins backwards” and you receive an energy credit. This credit is equal to the price of one kilowatt-hour of electricity and is automatically calculated using a net energy meter.

When you generate more solar, you earn energy credits. When you consume more energy, a credit is used.

When you generate more solar, you earn energy credits. When you consume more energy, a credit is used.