For years, the 30% federal tax credit was the headline number in every solar conversation in Washington. That credit expired for residential systems on December 31, 2025, and a lot of homeowners in Camas, Washougal and Vancouver have understandably concluded that solar incentives are simply gone.
They are not. Washington’s sales and use tax exemption is still here, still worth real money, and runs through December 31, 2029. It is now one of the most valuable incentives available to a Washington homeowner going solar, and unlike a tax credit, you do not wait until filing season to see it. It comes straight off the invoice.
What is Washington’s solar sales tax exemption?
It is a 100% exemption from Washington state and local sales and use tax on qualifying solar energy systems. Not a reduction. A full exemption.
It was created by E2SSB 5116 (Chapter 288, Laws of 2019), took effect July 1, 2019, and is scheduled to run through December 31, 2029.
Which systems qualify?
The system has to generate at least 1 kW and no more than 100 kW AC of electricity. That range comfortably covers essentially every residential rooftop system in Southwest Washington, and most small commercial ones too.
What exactly is exempt, just the panels?
Both the equipment and the labor, which is the part homeowners usually miss.
- Machinery and equipment used directly in generating electricity, panels, inverters, racking, and related components.
- Installation labor, when the work is performed by a qualifying installer.
Because installation is a meaningful share of a solar project’s cost, exempting the labor as well as the hardware makes a noticeable difference to the final invoice.
How much does it actually save?
It depends on your local combined sales tax rate. Washington has no state income tax but a relatively high sales tax, and rates vary by jurisdiction, Clark County’s combined rate differs from Cowlitz or Skamania. The exemption removes that entire percentage from a project that typically runs into five figures.
We will show you the exact figure for your address and system size on your quote.
Here is what that looks like locally. Per the Washington Department of Revenue’s Clark County rate notice effective April 1, 2026, the combined rates are 8.9% in Vancouver, 8.8% in Camas and Washougal, and 8.0% in unincorporated Clark County.
On a $25,000 system (an illustrative figure, not a quote) that works out as:
- Vancouver (8.9%): $2,225 in sales tax simply never charged
- Camas or Washougal (8.8%): $2,200
- Unincorporated Clark County (8.0%): $2,000
It scales with system size, so a larger array saves proportionally more: roughly $1,335 on a $15,000 system in Vancouver, $2,670 on a $30,000 one, and $3,560 on a $40,000 one. Rates change quarterly and vary by address, so we confirm the current figure for your exact location on your quote.
One thing worth being precise about: this is a sales tax exemption, not a rebate or a tax credit. There is no form to file with your return and no waiting for money to come back. The tax simply is not charged.
How do you claim it?
The mechanism is a certificate, and it happens at the point of sale.
- You provide your seller and installer with a completed Buyer’s Retail Sales Tax Exemption Certificate at the time of sale.
- The seller keeps that certificate on file for five years.
- Sales tax is not charged on the qualifying equipment and labor.
In practice, a competent installer walks you through this as part of normal paperwork. You should not have to discover it on your own or chase it down afterward.
The catch: your installer has to qualify too
This is the part most articles skip, and it is the part that should affect who you hire.
For the installation labor to be exempt, the installer has to meet Washington’s requirements. Per the Department of Revenue, that means being a registered contractor in good standing with:
- a current UBI number
- industrial insurance coverage
- an Employment Security Department number
- an excise tax registration number
- no wage or hour violations in the past 24 months
An out-of-area contractor or an under-the-table crew may not clear that bar, and if they do not, you lose the exemption on the labor portion. It is a legitimate reason to ask a direct question before signing anything.
Sunbridge Solar is a licensed, insured, registered Washington contractor and has been installing across SW Washington for over 15 years. We are happy to put our credentials in front of you.
What else is left for Washington homeowners in 2026?
With the federal residential credit gone, the remaining Washington picture looks like this:
- Sales and use tax exemption, the subject of this post, available through 2029.
- Net metering, Washington’s net metering program lets you bank excess production against later usage. See our guide to Washington solar net energy metering.
- Utility-specific programs, these vary. If you are on Clark PUD, start with our Clark PUD solar incentives overview.
- Commercial systems are a different story, the federal commercial credit survived the 2025 changes with its own timing rules. See our 2026 commercial solar guide for Oregon and Washington.
For the full picture, see our Washington State solar incentives guide.
Tax rules change and individual situations differ. This is general information, not tax advice. Talk to a tax professional about how any of it applies to you.
Frequently asked questions
Is solar exempt from sales tax in Washington State?
Yes. Washington provides a 100% sales and use tax exemption on solar energy systems generating between 1 kW and 100 kW AC, covering both equipment and qualifying installation labor. The exemption runs through December 31, 2029.
When does the Washington solar sales tax exemption expire?
December 31, 2029. It took effect July 1, 2019 under E2SSB 5116.
Does the exemption cover installation labor or only the equipment?
Both, but the labor is only exempt if your installer meets Washington’s contractor requirements, including a current UBI number, industrial insurance, an Employment Security Department number, excise tax registration, and no wage or hour violations in the past 24 months.
Do I still get the 30% federal solar tax credit in Washington?
No. The federal residential clean energy credit (Section 25D) was terminated for systems placed in service after December 31, 2025. Washington’s sales tax exemption and net metering are unaffected and still available. The federal commercial credit continues under separate rules.
How do I claim the Washington solar sales tax exemption?
You give your installer a completed Buyer’s Retail Sales Tax Exemption Certificate at the time of sale. Sales tax is then not charged on the qualifying portion of the project. Your installer should handle this as part of standard paperwork.
See what it looks like on your invoice
The clearest way to understand what is still available is to see the numbers for your own roof and your own address. No pressure, no hard sell, just the honest math.
Call 360-313-7190 for a free consultation, or get a free quote.
Sunbridge Solar | 421 C St Ste 5a, Washougal, WA 98671 | 360-313-7190
