Washington State Solar Guide 2025: Costs, Incentives & Net Metering
CRITICAL DEADLINE: 30% Federal Tax Credit Expires December 31, 2025
The 30% federal Investment Tax Credit (ITC) for residential solar ends on December 31, 2025. After this date, the residential credit drops to 0%. Washington homeowners who act now can save $6,000-$9,000 on a typical installation. Time is running out.
"Seattle is too cloudy for solar." I've heard this more times than I can count. It's one of the most persistent myths in the American solar industry—and it's simply not true. Yes, Washington State sees plenty of gray days. But here's what the skeptics miss: solar panels work on light, not heat, and the Pacific Northwest gets plenty of light, even on overcast days.
I've talked to dozens of Washington homeowners who've gone solar, from the rainy streets of Seattle to the sunny orchards of Yakima. Their systems are performing, their bills have dropped, and most of them wish they'd done it sooner. Washington may not be Arizona, but it's far from hopeless—and for many homeowners, the economics make solid sense.
This guide covers everything Washington State homeowners need to know: realistic production expectations, actual costs from recent installations, how net metering works with local utilities, and real stories from homeowners across the state.
Busting the "Too Cloudy" Myth
Let's address this head-on. Washington State averages 3.5-4.5 peak sun hours daily, depending on location. That's less than the national average of 4.5 hours, but it's far from zero. For comparison:
- Eastern Washington (Spokane, Yakima, Tri-Cities): 4.0-4.5 peak sun hours—comparable to many Midwest states.
- Seattle/Tacoma/Bellevue: 3.5-4.0 peak sun hours—cloudy, but panels still produce.
- Olympic Peninsula: 3.0-3.5 peak sun hours—the cloudiest region.
Here's the thing: Germany is cloudier than Seattle, receives less solar radiation, and has more installed solar capacity than any other country in Europe. If Germany can make solar work, so can Washington.
The key is understanding that solar economics depend on more than sunshine. Electricity rates, incentives, net metering policies, and system costs all factor in. Washington has high electricity rates in many areas (especially Seattle City Light territory), strong net metering, and a significant sales tax exemption. These factors compensate for reduced sunshine.
Solar Costs in Washington: What You'll Actually Pay
Washington solar installation costs run slightly above the national average due to higher labor costs in the Seattle metro area. However, the sales tax exemption (a huge benefit) significantly reduces your net cost.
| System Size | Base Cost | After Sales Tax Exemption | After Federal Credit |
|---|---|---|---|
| 6 kW | $18,000-$20,400 | $16,800-$19,200 | $11,760-$13,440 |
| 8 kW | $24,000-$27,200 | $22,400-$25,600 | $15,680-$17,920 |
| 10 kW | $30,000-$34,000 | $28,000-$32,000 | $19,600-$22,400 |
| 12 kW | $36,000-$40,800 | $33,600-$38,400 | $23,520-$26,880 |
Average installed cost runs $2.80-$3.20 per watt before the sales tax exemption. Seattle metro tends toward the higher end; Eastern Washington is more competitive.
What Affects Your Price
- Location: Seattle, Bellevue, and Eastside labor rates are higher than Eastern Washington or smaller cities.
- Roof complexity: Multi-story homes and steep-pitched roofs (common in Seattle) add installation time.
- Electrical panel: Many older Seattle homes have undersized panels requiring $1,500-$3,000 upgrades.
- Tree shading: The Pacific Northwest has beautiful evergreens. Sometimes they shade roofs.
Washington Solar Incentives: What's Available
Federal Investment Tax Credit: 30%
The federal solar tax credit allows you to deduct 30% of your total installation cost—equipment, labor, permits, and battery storage—directly from your federal income taxes.
On a $24,000 Washington installation, that's $7,200 back. On a larger system with battery backup, you could save $9,000-$10,000.
Critical deadline: The 30% ITC expires for residential solar installations on December 31, 2025. Your system must be fully installed and operational by that date. After 2025, the residential credit drops to 0%. There is no extension planned.
Washington installations typically take 6-10 weeks from contract to completion. Seattle permitting is relatively efficient, but don't cut it close. Sign a contract by September 2025 to be safe.
Sales Tax Exemption: Major Savings
Washington exempts solar energy systems from the state's 6.5% sales tax, plus local sales taxes (which can add another 2-4%). This is a significant benefit.
On a $28,000 system in King County (where total sales tax is about 10.25%), you're saving approximately $2,870 automatically. That's built into your installer's quote—you don't pay sales tax on solar equipment or installation labor.
This exemption essentially gives Washington an extra "incentive" that many states don't have. The sales tax savings partially compensate for the state's lack of other incentives.
State Incentive Program (Ended for New Installations)
Washington's renewable energy production incentive program closed to new applications in 2020. If you installed solar under the old program, you may still receive payments through 2029. But new installations don't qualify.
There's been legislative discussion about creating new state incentives, but nothing has passed. For now, the federal credit and sales tax exemption are your main incentives.
No State Tax Credit
Washington doesn't have a state income tax, so there's no state solar tax credit. This is a structural limitation—you can't offer tax credits when there's no income tax to credit against.
Net Metering: Full Retail Rate
Washington requires all electric utilities to offer net metering for residential systems up to 100 kW. This is excellent policy.
How Washington net metering works:
- Excess electricity you produce flows to the grid
- You receive credits at the full retail rate
- Credits roll forward monthly for 12 months
- At annual true-up, excess credits typically reset (no cash payment)
Size your system to match annual consumption, not overproduce. The grid acts as your battery—summer overproduction covers winter underproduction.
Washington Utilities: PSE, Seattle City Light, and Others
Puget Sound Energy (PSE)
PSE serves much of Western Washington outside Seattle city limits, including Bellevue, Tacoma, Everett, and surrounding suburbs. They're the largest investor-owned utility in the state.
- Net metering: Full retail rate for systems up to 100 kW
- Rates: $0.10-$0.12/kWh residential
- Interconnection: Generally 2-4 weeks after installation
- Community solar: PSE offers community solar for those who can't install rooftop panels
PSE has been reasonably supportive of residential solar, though they've advocated for net metering reforms in Olympia.
Seattle City Light
Seattle City Light is a municipal utility serving Seattle proper. They're notable for higher rates and ambitious climate goals.
- Net metering: Full retail rate
- Rates: $0.12-$0.14/kWh—higher than PSE, making solar more valuable
- Green power: Seattle City Light already gets most power from hydro, but rooftop solar still reduces grid demand
Seattle City Light's higher rates mean bigger bill savings, improving solar economics despite Seattle's clouds.
Avista (Spokane Area)
Avista serves Eastern Washington including Spokane and surrounding areas. Eastern Washington gets more sun, making solar more productive.
- Net metering: Full retail rate
- Rates: $0.09-$0.11/kWh
- Solar resources: Significantly better than Western Washington
Tacoma Public Utilities and Other Municipals
Various municipal utilities and PUDs serve other Washington communities. Policies vary—most offer net metering, but terms differ. Check with your specific utility before signing a contract.
Real Washington Homeowner Stories
David and Michelle, Bellevue (PSE)
"Everyone told us Bellevue was too cloudy. We ignored them. Installed 9 kW in April 2024 for $26,100 after the sales tax exemption—$18,270 net after the federal credit."
"First year, the system generated 10,200 kWh. That was right at the estimate—our installer was honest about Western Washington production. Our PSE bill went from $160/month average to about $25. We're saving around $1,620 per year."
"Payback is 11.3 years. Yes, that's longer than Arizona. But we'll own this house for 30+ years, and after payback, it's all free electricity. Plus, we're reducing our carbon footprint. Totally worth it."
Brian, Seattle (Seattle City Light)
"Seattle City Light rates are high—about $0.13/kWh—so solar actually makes more sense here than in cheaper utility territories. I installed 7.5 kW for $21,600 net after all incentives."
"My roof faces southwest, which isn't ideal, but it still gets good exposure. Year one production was 8,400 kWh. That's saving me about $1,090 annually. Payback is around 12 years, which is longer than I'd like, but the environmental benefit matters to me too."
Brian's advice: "Don't let people talk you out of solar just because you're in Seattle. The clouds aren't as bad as the reputation."
Karen and Tom, Spokane (Avista)
"Eastern Washington is different from Seattle—we get real sunshine here. Spokane averages 260 sunny days per year. We installed 8 kW in June 2024 for $22,800 after sales tax exemption, $15,960 net after the federal credit."
"First full year, we generated 10,800 kWh—above estimate. Avista rates are lower than PSE, about $0.10/kWh, so annual savings are around $1,080. Payback is 14.8 years based on bill savings alone."
"But here's the thing: we're retired and on fixed income. Locking in our electricity cost at $0 is valuable. We won't worry about rate increases for the next 25 years. And when we sell this house, solar will be a selling point."
Detailed Cost-Benefit Analysis
Let's run through a comprehensive example for a typical Washington installation:
Scenario: 8 kW System in Seattle Metro (PSE Territory)
| Category | Amount |
|---|---|
| System cost (before sales tax) | $26,000 |
| Sales tax savings (~10%) | -$2,600 |
| Net cost before federal credit | $23,400 |
| Federal tax credit (30%) | -$7,020 |
| Net cost after all incentives | $16,380 |
| Annual electricity production | 9,200 kWh |
| PSE rate | $0.11/kWh |
| Annual electricity savings | $1,012 |
| Simple payback period | 16.2 years |
| System lifespan | 25+ years |
| Post-payback savings (years 17-25) | $9,108 |
Over 25 years, this system generates $25,300 in total value from a net investment of $16,380. That's a 54% return on investment—not spectacular, but still positive. Higher-rate areas like Seattle City Light territory show better returns.
Scenario: 8 kW System in Eastern Washington (Avista Territory)
| Category | Amount |
|---|---|
| System cost (before sales tax) | $24,000 |
| Sales tax savings (~8.9%) | -$2,136 |
| Net cost before federal credit | $21,864 |
| Federal tax credit (30%) | -$6,559 |
| Net cost after all incentives | $15,305 |
| Annual electricity production | 10,800 kWh |
| Avista rate | $0.10/kWh |
| Annual electricity savings | $1,080 |
| Simple payback period | 14.2 years |
Eastern Washington's better sun and lower installation costs improve the math, though lower electricity rates partially offset the advantage.
Common Questions From Washington Homeowners
Q: Is Seattle really too cloudy for solar?
A: No. Seattle gets about 15% less sun than the national average, but solar panels still produce meaningful electricity. Germany is cloudier than Seattle and leads Europe in solar installation. Seattle's higher electricity rates actually help solar economics—every kWh you produce is worth more.
Q: What about winter production?
A: Winter production is lower—December and January produce about 25-30% of peak summer months. But annual net metering carries summer excess credits to offset winter consumption. Think of the grid as your seasonal battery. Your system is sized for annual production, not monthly.
Q: Will panels work on cloudy days?
A: Yes. Solar panels work on light, not heat or direct sun. They produce less on cloudy days—maybe 10-25% of capacity—but they don't stop completely. Pacific Northwest clouds are rarely total blackouts; there's usually diffuse light coming through.
Q: Should I wait for better state incentives?
A: Probably not. There's no guarantee Washington will create new incentives, and the 30% federal credit expires December 31, 2025. On a typical system, waiting until 2026 costs you $6,000-$7,000 in lost federal credits. That's unlikely to be replaced by state action.
Q: Is battery storage worth it in Washington?
A: Western Washington's grid is generally reliable, so batteries are optional for most homeowners. However, winter storms occasionally cause outages, and batteries provide backup power. The 30% federal credit applies to battery storage, making 2025 a good time to add one if you want backup capability.
Washington Installation Timeline
A typical Washington solar installation follows this timeline:
Weeks 1-2: Site assessment, system design, and contract signing. Installer evaluates roof, electrical panel, shading, and designs a custom system.
Weeks 3-4: Permitting. Seattle and King County are relatively efficient (1-2 weeks). Some rural areas take longer.
Week 5: Installation. Most residential systems install in 1-2 days.
Weeks 6-8: Inspections and utility interconnection. Building inspector reviews work, then PSE/Seattle City Light/Avista approves grid connection.
Total: 6-10 weeks. To meet the December 31, 2025 tax credit deadline, sign a contract by September 2025 at the latest.
The Bottom Line for Washington Homeowners
Washington solar works—even in Seattle. The payback periods are longer than sunbelt states (10-14 years vs. 6-9 years), but the investment still makes financial sense for many homeowners, especially those planning to stay in their homes long-term.
The key factors:
- Federal tax credit saves $6,000-$9,000 (expires December 31, 2025)
- Sales tax exemption saves $1,500-$3,000 automatically
- Full retail net metering maximizes value of your production
- Higher electricity rates in Seattle territory improve economics
- Eastern Washington gets significantly more sun
If you've been told Washington is too cloudy for solar, the data says otherwise. Yes, production is lower than Arizona. Yes, payback takes longer. But panels still produce, bills still drop, and over 25 years, the investment pays off.
The 30% federal tax credit expires December 31, 2025. That's approximately $6,000-$7,000 in savings that won't exist in 2026. If you're seriously considering solar, this is the year to act—clouds and all.
Washington may be known for rain and coffee, not desert sunshine. But those gray skies aren't as dark as the reputation suggests, and for homeowners who understand the economics, solar makes sense. Don't let the clouds talk you out of clean, cost-effective energy.