Solar in Washington

Washington's residential solar policy centers on full retail net metering, mandated by the Utilities and Transportation Commission for systems up to 100 kW with an annual true-up — one of the more generous system-size caps of any state. Puget Sound Energy, Seattle City Light, Snohomish County PUD, and Avista all operate under the framework, crediting residential exports at the full retail rate. Customers retain their net-metering terms for the life of their interconnection.

The state's stable residential incentive is the sales tax exemption (6.5% plus local) on solar energy systems, extended through 2029. Washington offers no state income tax credit, no property tax exemption, and no SREC market. The federal Section 25D residential credit expired December 31, 2025; leased and PPA systems may still access Section 48E for projects that began construction before July 6, 2026. The policy direction has been stable and mildly supportive under the state's Clean Energy Transformation Act (100% clean electricity by 2045), but the abundant hydroelectric baseline keeps retail rates low enough that the economics are weak despite the favorable policy.

The principal reality is that Washington's combination of cheap, already-clean electricity and a modest solar resource makes rooftop solar a marginal proposition for most homeowners. The case is narrow and long-horizon, strengthening only for households with high or growing consumption who value the hedge against future rate increases as the state retires its legacy fossil generation.

Washington's 3.7 peak sun hours conceal a dramatic east-west split. West of the Cascades — Seattle, Tacoma, Olympia, the coast — the long wet season from late fall through spring compresses annual production into the dry summer half, with persistent marine cloud cover dragging the figure down. East of the Cascades — the Yakima Valley, the Spokane area — the resource is genuinely stronger, with far more clear days and a drier continental climate. The statewide average understates how regional the case is.

Because Washington retains full retail net metering with an annual true-up, the optimal strategy is the classic maximize-and-bank model. A south-facing array tilted near latitude (~47°) captures the most annual kilowatt-hours, and the dry-season surplus is banked at the full ~$0.12/kWh retail rate to offset wet-season consumption. There is no avoided-cost penalty for overproduction, which matters in Washington because the production is so seasonally concentrated that annual banking is essential to capture its value.

The unusually high 100 kW net-metering cap is a distinctive feature, and Seattle City Light and other consumer-owned utilities operate alongside Puget Sound Energy with their own program specifics. Most annual production comes from May through September, so a system should be sized to capture that productive season fully.

Washington's $3.10/W installed cost is close to the national average, with a typical 8 kW system around $24,800 before incentives. The 30% federal residential credit (Section 25D) ended December 31, 2025, leaving the sales tax exemption (6.5% plus local, through 2029) as the primary structural offset. Washington offers no state income tax credit, no property tax exemption, and no SREC market.

Payback near 24.8 years on the 8 kW model is the slowest of any full-retail-net-metering state, driven almost entirely by the low retail rate (~$0.12/kWh) and the modest solar resource. An 8 kW system generating about 8,300 kWh a year displaces only roughly $998 in annual spending at that rate, which is why the timeline stretches so far. Households with high consumption — particularly those heating with electricity or adding an EV — see a stronger, if still long-horizon, case.

The lever most worth pulling in Washington is forward sizing for electrification, since the offset value is so low at current rates that the case strengthens only as consumption rises or as retail rates climb off their historically low hydroelectric baseline. The sales tax exemption is the lone upfront offset, and the favorable net metering with annual banking is what makes the long-horizon case viable at all.