If you’ve been researching solar this year, you’ve probably read that the federal government offers a 30% tax credit for homeowners who go solar. That information is wrong for 2026, and it’s still appearing on most of the articles ranking for this topic. The credit was eliminated by federal legislation signed on July 4, 2025, and any system installed on or after January 1, 2026 doesn’t qualify. For homeowners in the Spokane area or across the state line in northern Idaho, that changes the financial picture significantly.
The good news is that Washington and Idaho both have state-level programs that still make solar worth considering, and Avista’s net metering rules apply on both sides of the border. What’s missing from almost every article you’ll find is a clear picture of how these programs work together for homeowners in this specific corridor. Here’s the honest 2026 breakdown.
The Federal Tax Credit Is Gone. Here’s What Actually Changed
The One Big Beautiful Bill Act, signed into law on July 4, 2025, eliminated the Section 25D Residential Clean Energy Credit for solar systems installed on or after January 1, 2026. There was no phase-down. The credit didn’t drop to 26% or 22%. It was removed entirely for new owned residential installations. If you installed and placed your system in service by December 31, 2025, you can still claim the 30% credit on your 2025 tax return, including any unused amounts carried forward from prior years.
One federal pathway does remain open. Solar leases and power purchase agreements (PPAs, where a third party owns the system and sells you the electricity it produces) still allow the system owner to claim the Section 48E commercial investment tax credit through the end of 2027. The installer or leasing company claims that credit, but the savings can pass through to you as lower lease rates or reduced per-kilowatt-hour pricing. If you’re comparing a lease to a purchase, ask any installer directly whether their offered lease rate reflects the Section 48E benefit.
Washington State Incentives Still in Place for Spokane Homeowners
Washington didn’t eliminate its state-level solar incentives when federal law changed, and two of them are meaningful for Spokane homeowners right now.
Sales Tax Exemption
Washington exempts solar equipment and installation labor from state and local sales tax for systems up to 100 kW. This exemption is authorized through 2029 under RCW 82.08.962 and applies at the point of sale with no paperwork required from the homeowner. On a typical residential system in the $20,000 to $30,000 range, the exemption saves roughly $2,000 to $3,000 depending on local rates.
Net Metering Through Avista
Avista Corporation is one of three investor-owned utilities in Washington legally required to offer net metering under RCW 80.60. For Spokane homeowners, that means excess solar generation credited to your account at the full retail rate. Credits accumulate month to month but reset to zero on March 31 each year with no cash compensation for the remaining balance. The sizing implications of that reset date are covered below.
One thing Washington doesn’t offer: a property tax exemption for solar-added home value. If your system increases your assessed value, that increase is generally taxable. Idaho handles this differently.
Idaho Incentives for Northern Idaho Homeowners
Northern Idaho homeowners don’t have Washington’s sales tax exemption, but the state offers three programs that stack reasonably well.
Idaho Residential Alternative Energy Device Deduction
This is frequently mischaracterized online as a tax credit, but it’s a deduction. It is not a dollar-for-dollar reduction in what you owe. Idaho allows homeowners to deduct the cost of a residential solar installation from their state taxable income over four years: 40% of the system cost in year one, then 20% per year for the following three years. The deduction is capped at $5,000 per year, so the maximum total deduction over the four-year period is $20,000. You’ll claim it on Idaho Form 39R in the Subtractions section. Idaho’s income tax rate is a flat 5.3% for 2026, which means the maximum annual savings from the deduction cap is around $265. Meaningful, but not a replacement for the federal credit.
Property Tax Exemption
Idaho law provides that a solar installation on residential property doesn’t trigger an increase in property tax assessment. If your system adds $15,000 to your home’s appraised value, that increase won’t raise your annual tax bill. Over a 25-year system lifespan, that’s a genuine financial benefit Washington homeowners don’t have.
OEMR State Energy Loan Program
The Idaho Governor’s Office of Energy and Mineral Resources (OEMR) offers low-interest financing for residential solar installations through its State Energy Loan Program. Loans are limited per region and awarded first-come, first-served. Availability changes year to year, so if this is part of your financing plan, confirm current availability directly with OEMR before you sign anything.
How Avista Net Metering Works on Both Sides of the State Line
Avista serves both Spokane and northern Idaho, offering net metering under Schedule 63 for systems up to 100 kW in both states and crediting excess generation at the retail rate. There’s an important distinction worth understanding: Washington mandates net metering by state law, while Idaho doesn’t. In Idaho, Avista offers net metering as a voluntary program under Idaho Public Utilities Commission (IPUC) tariff approval. That means the terms are more subject to change on the Idaho side, though the program has been stable and the IPUC has generally been supportive of residential customers.
The March 31 annual credit reset is the detail that most affects how you should size a system in this region. Any unused kWh credits in your Avista account at the end of March disappear with no cash payout. A system sized to maximize summer production will often leave credits on the table in early spring. The better approach is to size toward your annual consumption, using 12 months of Avista billing data, so you’re drawing down banked credits steadily through winter rather than running a surplus that resets to zero in late March.
Interconnection applications for systems up to 100 kW are typically handled by your installer and carry a $100 processing fee. Avista notifies both the customer and the installer within five business days of receipt, one of the faster utility interconnection timelines in the region.
Stacking What Remains: Maximizing Solar Savings in 2026
The incentive picture is genuinely different from what it was a few years ago, but it isn’t empty. Washington homeowners in Spokane can combine the sales tax exemption with Avista net metering to reduce both upfront cost and ongoing utility bills. Homeowners in Coeur d’Alene and surrounding northern Idaho communities can layer the four-year state deduction, the OEMR loan program if available, and the property tax exemption into a package that holds up reasonably well now that the federal credit is gone from the math on either side of the state line.
If you’re considering a lease or PPA rather than purchasing outright, ask any installer whether their lease rate incorporates the Section 48E savings. That’s the only remaining federal benefit path for 2026 installations, and you should be able to see clearly how much of it flows through to you.
Washington homeowners also have a legal backstop that wasn’t available a few years ago. The Washington Solar Consumer Protection Act, enacted in 2024, requires installers operating in the state to follow transparent and fair sales practices. If you believe an installer misrepresented a product, a credit, or contract terms, you can file a complaint with the Washington Attorney General’s Office.
Washington’s sales tax exemption, Idaho’s state deduction and property tax protections, and Avista’s net metering still make solar financially viable for homeowners in this region. The math depends on your state, your utility territory, and how your system is sized. Northwest Renewables works with homeowners across the Spokane area and northern Idaho and can walk you through a site-specific estimate that reflects what’s actually available to you right now. Reach us at (509) 732-9255.