Incentives for Solar

Renewable Energy Incentives

The following information focuses on renewable energy incentives for Washington State residents. For incentives available in other states, please visit the Database of State Incentives for Renewables & Efficiency, DSIRE.

Federal Tax Credit of 26%

You earn 26% of the total project cost back as a Federal Tax Credit when you have for solar electric (PV) installed. Individuals use IRS tax form F5695 to get the tax credit. This incentive requires that you owe enough in federal income tax that you can take a tax credit.

For systems installed in 2021 and 2022, it is 26%. It falls to 22% the following year (2023), and from 2024 on, the tax credit is 10% for commercial systems and zero for residential systems.

Businesses can take advantage of an Accelerated Depreciation (MACRS) over 5 years and are allowed to depreciate 85% of the cost of the solar system.

Net Metering

Net metering is a bill structure for people who produce some of their own power. Through net metering, grid-tied solar systems earn retail rate “credits” with your utility whenever your system produces excess electricity (more than you are consuming at the moment). Then, when you need more electricity than you produce, you spend those credits. This can be thought of as spinning your meter backward, but in reality, your utility will report to you on each bill the KWH you send to the grid and the amount you draw from the grid. The “net” amount is what you pay for electricity that month, however, you can never owe less than the monthly minimum for your utility. Credits roll over month to month but at “year-end”, they zero out. Year-end for net metering in Washington is March 31, with some exceptions for agricultural uses with some utilities (for example, farmers who run irrigation pumps only during summer).


Net Metering is a contract you sign with your utility. Your utility’s website has further details; look for “net metering” or “customer generation.” Net-metered customers still pay their utilities fixed base rate which is designed to cover the utility’s fixed assets like poles and wires.

Net Metering in Washington State

Washington’s current net metering law, which was updated in July 2019 through the Solar Fairness Act, requires both public and investor-owned utilities to offer net metering to interested customers up to 4.0% of the utilities 1996 benchmark at the full retail rate, or until June 30, 2019, whichever is sooner. Once a utility reaches either threshold they must continue to offer net metering unless they have developed an alternative rate structure through a process that allows ample time and opportunity for public comment.
The Solar Fairness Act also prohibits utilities from charging net-metered customers a different fee than others within their rate class.
Below are links to the four largest electric utilities in Washington. Click to find out more about their net metering programs. (Due to the number of Washington utilities we are unable to provide links for them all.)

Zero-Down Solar Loans / Financing

Puget Sound Co-Op Credit Union (PSCCU), you get the lowest interest for which you are eligible because Fire Mountain Solar is an authorized installer. Ask for the Sustainable Solar loan. They are fast and efficient. The loan can be arranged via phone and internet.
Generations Credit Union offers loans for the purchase of renewable energy systems. 100% of the installation cost is typically eligible for financing.
Community First Credit Union offers a solar loan for renewable energy systems.
Alternatively, you may be able to get a home-equity line of credit on your existing home loan or talk with other Washington credit unions that offer special solar loans.

Utility Incentives for Energy Efficiency

It is always a good idea to reduce the amount of electricity you use through energy efficiency. Check out your utility’s incentives for energy efficiency. Many utilities offer a variety of rebates for energy-saving equipment from light bulbs to heat pumps to appliances to ductless heat pumps to showerheads so that you can reduce your electric bill.