2024 Solar Incentives Guide for Tacoma, WA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Tacoma.
You'll learn about:
- Local & State Solar Incentives
- Federal Tax Credits (Updated for 2024 and beyond)
- Ways to optimize your solar investment
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What Solar Tax Credits, Incentives, and Rebates are Available in Tacoma?
Renewable Energy Cost Recovery Incentive Payment
Renewable Energy Sales and Use Tax Exemption
100% exemption for solar photovoltaic systems 10 kilowatts or less, and solar thermal systems;
75% exemption for other qualified systems
Evergreen Sustainable Development Standard for Affordable Housing
Federal Residential Renewable Energy Tax Credit
Source: https://www.dsireusa.org/
The phrase "solar incentives" refers broadly to financial incentives designed to encourage increased use of renewable energy by making installing and using solar panels more affordable. Various types of incentives, such as cash back, discounts or monthly utility bill credits, might be available to you. Certain incentives may be offered by the state of Washington, by your utility company or by county or municipality, while other incentives are federal. Some solar incentives you might qualify for are:
- Tax Credits: Tax credits reduce, dollar-for-dollar, the total amount of tax you owe the government. Tax credits differ from tax deductions.
- Rebates: A rebate is a partial refund credited to your account after you've paid for your solar panels. Rebates might be offered by your local utility company, your county or your state. The cash back that you get from the rebates is normally applied before tax credits are calculated.
- Net Metering: Make sure you speak to your Tacoma utility company about signing a net metering agreement. This allows you to get a credit towards your monthly utility bill for the value of excess energy your solar panels generate. You could receive either a dollar-for-dollar credit or a percentage of the value.
- Tax Exemptions: These can come in the form of property tax exemptions, which let you exclude the value of your solar system when paying taxes on your home. You may also qualify for an exemption on sales tax at the time of purchase.
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Federal Solar Incentives
When people think of solar incentives, federal incentives might be the first thing that comes to mind. A federal incentive many people are probably familiar with is the Federal Solar Investment Tax Credit (ITC). This is a tax credit for a certain percentage of your solar system's cost.
The ITC initially applied to 30% of the cost of solar system installation, although that number has fluctuated slightly over time between 26-30%. The percentage you qualify for will depend on when your solar system was installed. The cost of installation includes the panels themselves as well as the cost of accessories, equipment and labor. There is no maximum amount you can claim. The ITC can be applied to solar panels installed after January 1, 2006, on your primary or secondary residence. The residence must be in the United States and owned by you.
Your local Tacoma solar panel installation expert can give you more information about the ITC and how it might apply to your situation.
The Inflation Reduction Act, passed in August 2022, made some changes to the ITC (as well as renaming it to the Clean Energy Credit). For solar systems installed between January 1, 2022, and December 31, 2032, homeowners may be eligible for a credit for 30% of the total cost. The percentage will then decrease annually until the Clean Energy Credit expires in 2035. Starting in 2023, it will also be easier to qualify for credits for energy storage systems with the new act.
Click here to learn more about the new Inflation Reduction Act. Your local Tacoma solar panel installation experts can answer your questions and explain how the new Clean Energy Credit applies to you.
State & Local Solar Incentives
Some solar incentives may be offered at the local or state level. As with federal incentives, these might include rebates, tax credits and more. The incentives — which may be given by the state of Washington, or by your county or municipality — may be offered on an ongoing basis, or for only a limited time.
Next Steps for Installing Solar in Tacoma
Solar energy use nationwide has gone up significantly in the last 15 years, in part due to the growth in the number of solar incentives. You may get these incentives from the federal government, the Washington government or your local utility company. We recommend talking to your local Tacoma solar installation company to learn more about these incentives and to make sure that you're getting the largest number possible for your solar panels.
EcoWatch's Tacoma, WA Solar Incentives FAQs
If I installed solar panels on my house a few years ago, can I still claim incentives?
You should plan to talk to someone from the company that installed your solar system – or reach out to a local Tacoma solar installer — to clarify which incentives you might qualify for. If your solar panels were installed after January 1, 2022, you likely qualify for the newly increased 30% tax credit under the Inflation Reduction Act. Systems installed between 2006 and 2021 may qualify for a tax credit of 26-30%.
What are some of the environmental benefits of switching to solar energy?
You can reduce your carbon footprint by 50 pounds of CO2 annually by installing solar panels. This adds up to roughly 1,000 pounds in 20 years. In addition, solar power is a renewable energy source, which means that switching your home over lessens the drain on our planet's resources.
If I change out my appliances for ones that use solar energy, are there incentives that I can claim?
The new Inflation Reduction Act includes provisions for several incentives meant to reward homeowners who make eco-friendly upgrades. Some of these incentives include rebates and tax credits for installing new electric appliances. You can find more details about these incentives here.
Can I get any financial incentives when I add solar panels to a vacation home, rental property or commercial property?
Many solar incentives are intended to apply to a property located within the United States that you own; most secondary residences fall into this category. Other solar incentives may be available for commercial properties, depending on the specifics. We recommend reaching out to your local solar installer and/or tax professional to fully understand what incentives apply to your specific situation.
Our goal is to reach as many people as we can with sensible solutions like solar energy. Our team of full-time local researchers collects solar price and installation data for every city in America then compiles it to create these digestible city guides. If you want to read our solar expert's opinion on the top solar companies featured here, follow this link.
Solar incentive research was conducted by Melissa Smith and Karsten Neumeister. Local data analysis was conducted by James Savino. See something we missed or could do better? Email the editor.